False Claims Act Update & Alert
Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG
September 30, 2011
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The $160 Billion Medicaid Ripoff
Sandoz, a generic drug unit of Novartis, recently settled a Medicaid Average Wholesale Price (AWP) drug overpricing lawsuit with Texas for $66 million. As part of a related lawsuit against Sandoz, arguing the same set of facts, Iowa estimated the state's Medicaid program had been overcharged $1.6 billion over 13 years for prescription drugs alone! Because the population of Iowa is almost exactly 1/100 the population of the U.S., that $1.6 billion, when given a national weight, works out to be $160 billion. >> To read the Iowa complaint
DME Maker Hill-Rom to pay $41.8 Million
Hill-Rom, one of the largest national suppliers of durable medical equipment, has agreed to pay $41.8 million to settle a False Claims Act lawsuit alleging the company routinely submitted invoices for equipment not supplied to patients who did not qualify. The DoJ press release in this case not only names the whistleblowers, but also their private counsel. Full applause to DoJ for recognizing the complete public-private partnership! >> To read more
Defense Contractors Pay $30 Million
SAIC (Science Applications International Corp.), Applied Enterprise Solutions, and Lockheed Martin, have agreed to pay over $30 million to settle a False Claims Act lawsuit charging all three entities with bid rigging on a government contract with a potential value of up to $3.2 billion. The rigged contract was to establish and run a new National Center for Critical Information Processing and Storage (NCCIPS). >> To read more
Big Cases on the Horizon
n Amgen faces a withering crossfire of litigation over kickbacks and other marketing chicanery associated with Aranesp marketing. A trial is on the horizon in Boston unless DoJ and the defendant settle first. Amgen easily faces more than billion dollars in liabilities.
n Ranbaxy has a big legal and marketing problem. Many of its products are banned from import to the US due to serious long-term manufacturing and quality-control problems in India, but the company is poised to begin selling generic Lipitor. That market may be closed in America unless Ranbaxy settles fraud charges with the government. Word on the street is that a settlement north of $1 billon may be in the swing.
n Johnson & Johnson is looking down the barrel of a trial in Texas over off-label marketing of Risperdal. The last company that went to trial in Texas, however, had their head handed to them, with a $170 million verdict and mandatory exclusion. Does Johnson & Johnson, which has already admitted Risperdal marketing problems, want to face a jury in Texas and, by so doing, potentially knock itself out of much the U.S. pharma market? > To read more
Coaching Drugstore Liars
Ripping off America's health care system requires a sophisticated group of marketing and public relations professionals who crank out lies like widgets. A classic example can be found in the "one liners" that Par Pharmaceuticals and Walgreens used to explain to rank-and-file customers why their prescription prices were (illegally) soaring from just over $5 to just over $71. >> To read more
Boston Scientific to Pay $9.25 Million
Harry Markopolos on How to Find Fraud
In a recent Business Week article, Bernie Madoff whistleblower Harry Markopolos lets the cat out of the bag when it comes to looking for fraud: "Focus on the manager or the company that is head and shoulders above the rest. Whenever somebody has outstanding performance, Wall Street assumes genius. I assume fraud until genius is proven. Look for the outperformance and investigate there."