David Brust, Class of 2022, Belmont Law
The False Claims Act was enacted in 1863 in order to combat fraud against the US Government during the Civil War. The act prohibits any person from knowingly submitting false claims to the government. Any person who violates the False Claims Act is “is liable for treble damages plus a penalty that is linked to inflation.” Additionally, the act allows whistleblowers to file suit for the government and if successful, the whistleblower may receive 15 to 30 percent of the recovery. The act plays a vital part in combatting fraud within the health care industry.
Recently, the United States Department of Justice announced that during the 2020 fiscal year it recovered over $2.2 billion in settlements by enforcing the False Claims Act. Of note, are recoveries from Novartis Pharmaceutical Corporation, Gilead Sciences, and Practice Fusion, Inc. Novartis Pharmaceutical, who was accused of paying high-volume prescribers to serve as speakers in exchange writing more prescriptions, settled for over $591 million. Additionally, Novartis, along with Gilead Sciences, settled claims for $148 million for illegally paying patient copays. Lastly, Practice Fusion paid $145 million for accepting kickbacks from Purdue Pharma in exchange for designing its electronic health records software in a way that would increase prescriptions for OxyContin (a Purdue Pharma drug).
Additionally, the Department of Justice announced that it has billions of dollars in pending settlements not included in the 2020 total. Of these settlements, the most notable is an unsecured bankruptcy claim for $2.8 billion from Purdue Pharma. This settlement is to “resolve allegations that Purdue caused false claims to be submitted to federal health care programs arising from its conduct in promoting and unlawfully inducing prescription opioids.” Additionally, members of the Sackler family, the founders of Purdue Pharma, have agreed to pay $225 million for their roles in suspect marketing schemes. Thus, the Department of Justice is set to recover even more money under the False Claims Act in 2021.