The Department of Justice recovered over $1.6 billion thanks to qui tam whistleblower lawsuits in the fiscal year 2021, which is October 1, 2020, to September 30, 2021. The qui tam provisions under the False Claim Act empower private citizens to file lawsuits on behalf of the government if they have knowledge of actions that defraud the government and steal taxpayers’ money. The agency continues this work in fiscal year 2022 with two major False Claims Act settlements stemming from qui tam whistleblower lawsuits.
The Ohio-based Cardinal Health, Inc. will pay $13,125,000 to resolve allegations of kickbacks. The False Claims Act’s Anti-Kickback Statute bans pharmaceutical distributors from paying or offering to pay compensation that induces physicians to prescribe their drugs.
While some circumstances would allow a legal discount, Cardinal Health offered upfront discounts or opportunities for kickbacks when recruiting new customers. However, the discounts were not attributed to specific transactions, and the rebates were apparently not earned. These actions left the distributor to funnel the money to physicians instead and potentially influence physicians’ decision-making. Relators will receive $2.6 million for their help on this matter.
Hayat Pharmacy operates 23 locations in the Milwaukee metro area. It will pay $2,050,000 to resolve allegations that it submitted false claims to Medicare and Medicaid for payment of medication. The chain submitted false claims in 2019 for a topical cream containing iodoquinol, hydrocortisone and aloe, and a multivitamin known as Azesco. The government was charged thousands of dollars for each prescription of the topical cream and hundreds of dollars per prescription of the vitamins.
Hayat was accused of upselling these expensive products rather than using lower-cost medications available. Along with the fine, the company promised to update its training on the medication-switching rules, notably in how they apply to fraud, waste, abuse, and compliance. While qui tam whistleblowers are eligible for 15% to 30% awards for fines levied, there is no word on the amount involved in this case.
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This firm had no involvement in those cases, but individuals with questions regarding the False Claim Act, qui tam lawsuits or whistleblower protections can speak with attorneys who handle these cases. These legal professionals can work with clients to determine the best course of action with their own whistleblower matter.