Fraud by government contractors is one of the most common scenarios triggering liability under the False Claims Act. Beginning in the Civil War era, government contractors would routinely engage in misconduct by offering goods and services that fell far short of the requirements delineated in the contractual agreement. In today’s modern times, government contract fraud continues to create problems for various government agencies – particularly the Department of Defense. In today’s case, however, the contract issue involves an agreement between medical services provider McKesson, Corp. and the Centers for Disease Control and Prevention, specifically relating to the shipping of vaccinations to various medical facilities.
Details of Settlement With McKesson
According to the allegations as revealed by the U.S. Department of Justice, for a period spanning from April through November, 2007, McKesson was unlawfully engaging in the practice of shipping vaccines to the United States without maintaining proper safety protocols. Specifically, the complaint alleges that McKesson failed to abide by the provisions of its contract with the government, which required temperature monitors on all shipping containers carrying sensitive vaccines. What’s more, the contract required McKesson to set monitors that would alert carriers in the event the inside of the box reached an unsafe temperature – which it allegedly failed to do. According to the Centers for Disease Control, all inactivated vaccines require refrigeration not to exceed 40 degrees Fahrenheit. Other types of vaccines, including those containing varicella, must be kept at a constant freezing temperature. Anytime a vaccine is exposed to a temperature outside the recommended range, the effectiveness and potency of the drug are significantly diminished.
From there, McKesson triggered False Claims Act liability by subsequently submitting invoices to the CDC for reimbursement of its services under the agreement. The submission of invoices to cover the costs of shipping the vaccines, which were not done in accordance with the terms of the agreement, amounted to the alleged false claims.
Although McKesson has denied any liability in the matter, it agreed to pay $18 million to settle the False Claims Act allegations. In a statement issued by the corporation, it believed that its temperature monitors complied with the terms of the agreement, and pointed out that the government has not made any allegations that the vaccines were compromised or rendered unsafe in any way.
The case against McKesson was commenced in July, 2012, by a whistleblower who worked as the finance director of McKesson Specialty Distribution LLC. From there, the federal government opted to intervene in the litigation and continue with its own investigation of the alleged fraud.
Under the False Claims Act, a whistleblower may receive up to 25 percent of the ultimate recovery as an incentive for coming forward. This percentage is actually increased to a possible 30 percent in the event the government opts not to intervene.
Contact Berger Montague Today
If you are aware of fraud under a government contract and would like to speak with a reputable whistleblower attorney, we encourage you to contact us today. We have experience working with plaintiffs with knowledge of healthcare, defense contracts, or any other type of fraudulent misconduct involving the federal or state government. To discuss your options under the False Claims Act, please call us today.