Qui Tam Lawsuits & The Pharmaceutical Industry

Modified on 2009/10/14 21:34 by admin
It was Albert Einstein who said, "The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing." Unknowingly, Einstein was describing the most important principles of qui tam, a little known law that allows moral people to flush out corruption. An abbreviation from the Latin "qui tam pro domino rege quam pro sic ipso in hoc parte sequitur," which means "who as well for the king as for himself sues in this matter," qui tam laws have existed for centuries, dating as far back as 13th century England.

Qui tam, a provision of Abraham Lincoln's 1863 Federal Civil False Claims Act, allows a private citizen to file a lawsuit on behalf of the U.S. government in an effort to recover losses caused by fraud against the government. The law is an incentive for civilians who know of individuals or companies making false claims for profit to come forward with information. In reward, the "whistleblower" (also known as the relator) shares in any federal revenue recovered. In recent years, whistleblowers have been filing more and more qui tam lawsuits against the pharmaceutical industry.

The pharmaceutical industry is no different than any other business. Like all companies, pharmaceutical manufacturers keep a close eye on the bottom line. For drug companies to succeed, they need the help of doctors to prescribe their medications. A dangerous game sometimes ensues, as drug makers occasionally use dubious tactics to sell their products. In the end, it is the patient and government healthcare programs such as Medicare and Medicaid that end up suffering.

One of the ways a few drug companies have attempted to increase sales is by influencing physicians to prescribe a drug "off-label." Under federal law, a doctor may prescribe a medication for any ailment that he or she feels the drug is suitable for. However, it is illegal for a pharmaceutical company to actively promote a medication for off-label use (an indication not approved by the U.S. Food and Drug Administration). Critics of the system say that some drug company sales representatives commit a form of bribery to encourage off-label use of a medication. For instance, doctors are often treated to lavish dinners and vacations where they may be influenced, either implicitly or expressly, to prescribe a drug off-label. Additionally, physicians are sometimes hired by pharmaceutical companies to speak to other doctors about the multiple uses of one particular drug or another. Some doctors have been listed as authors of journal articles praising off-label use, even though pharmaceutical company employees wrote the stories. Over time, word begins to spread throughout the medical community, and eventually a large number of doctors are prescribing drugs for disorders they were never meant to treat. All of these tactics are creative but highly illegal.

Kickbacks are another example of an illegal tactic implemented by some drug companies. Federal statutes prohibit anyone from bribing another to choose a certain vendor who is paid by a U.S. healthcare program. Unfortunately, kickbacks are often extremely lucrative and sometimes hard for a physician to ignore. Examples include the following:

  • Free Samples-Sales representatives supply a physician with free samples of a medication, which the doctor then proceeds to sell to the patient for hundreds of dollars. A doctor may also give a patient a free coupon to turn in for a sample of a medication. The transaction is reported as a sale for the company.

  • Speaking Engagements-Sales representatives may hire a physician to speak at a formal engagement. Sometimes the doctor ends up never speaking at the event but still receives money.

  • Retreats-Physicians are treated to expensive dinners and vacations at lavish accommodations in return for choosing a drug company's medication.

  • Grants-Doctors may receive a "grant" from a pharmaceutical maker under the guise that it is for research purposes when in actuality it is a payoff for their business.

  • Drug Trials-Physicians are paid to conduct a clinical trial for a medication. It serves no purpose other than helping the drug maker further promote the medication.

  • Average Wholesale Price-Medicare and Medicaid use the national average wholesale price (AWP) when determining how much to reimburse a provider for the purchase of a medication. Pharmaceutical companies offer physicians deeply discounted prices for a drug, selling a physician on the fact that he will make a profit because of the large differential between the low selling price and the higher national average wholesale price.

As a rule, anyone who defrauds the government out of revenue can be held accountable under the False Claims Act. Typical plaintiffs in qui tam cases against the pharmaceutical industry include employees (both current and former) of the drug manufacturer as well as doctors on a current or past payroll of the pharmaceutical company.

Most whistleblower suits are filed on a contingency fee basis. Plaintiffs only pay a fee if the attorney recovers damages in the case. Contingency fees are a percentage of the total amount collected. If the plaintiff loses the case, the attorney will not charge the client for services.

Qui tam lawsuits are filed under seal in a U.S. District Court that has jurisdiction over the case. The Department of Justice (DOJ) has 60 days to investigate the claim and determine if the government will join in the lawsuit. The DOJ often requests a number of extensions and the complaint may remain under seal for as long as two or three years. If the government decides to not join in the lawsuit, a whistleblower may still continue to prosecute the case.

It is the patriotic duty of a pharmaceutical sales representative or any insider to expose illegal activity at his or her company. It happens more often than some may think. For instance, a former employee of TAP Pharmaceutical Products and a physician who worked with the company recently filed a qui tam lawsuit against the drug maker over an illegal kickback scheme. The case settled for $875 million, about $95 million of which is going to the whistleblowers. In the end, persons holding vital information regarding illegal activity must decide what is right and what is wrong. An experienced qui tam attorney will guide a client through the process.

If you feel you have a claim under the qui tam provision of the Civil False Claims Act, it may be important to contact an attorney who can help you protect your legal rights. Please keep in mind that there may be time limits within which you must commence suit.

See Also

  1. Federal Civil False Claims Act & Qui Tam Law (Whistleblower Litigation)
  Name Size