October 21, 2013 False Claims Act Information

The Top 5 Cases Decided Under the False Claims Act

It is not uncommon for a whistleblower case to result in a settlement or order valued in the millions of dollars. In this article, we focus on cases with ten-figure settlements, including some approaching the billion-dollar mark. Interestingly, the majority of companies that were affected by these expensive settlements arising from the False Claims Act continue to maintain business without much difficulty.

Abbot Laboratories

In 2012, prominent drug maker Abbot Laboratories agreed to pay $1.5 billion dollars to settle its outstanding civil and criminal penalties stemming from its unlawful promotion of the drug Depakote. The company was placed on probation and is subject to heightened reporting requirements. The details of this case reveal the unlawful marketing of a drug, designed to treat conditions like bipolar disorder or epilepsy, for use by nursing homes to treat aggressive Alzheimer’s patients.

Tenet Healthcare Corporation

In 2006, a prominent healthcare group agreed to pay $900 million in fines and penalties for overbilling Medicare and Medicaid. The settlement accounted for roughly one-fourth of the corporation’s total value, and forced Tenet to sell of a dozen hospitals to regain financial stability. Tenet was accused of improper billing practices and offering unlawful kickbacks to physicians.

Bank of America

Bank of America has faced several lawsuits over the years, particularly in light of its participation in the 2008 financial crisis. Beginning in 2009, the Department of Justice began investigating BofA’s lending practices and determined it to be knowingly offering FHA-insured loans to unqualified buyers. A portion of the settlement proceeds were funneled back to Bank of America under the condition that it set up a program for troubled borrowers in need of refinancing for their underwater mortgages.

Pfizer

In 2009, drug giant Pfizer settled with the Department of Justice for $2.3 billion to resolve a number of whistleblower lawsuits filed pertaining to off-label marketing. According to the allegations, Pfizer was marketing its drugs Bextra, Geodon, Zyvox and Lyrica in dosages and uses not approved by the FDA. It is also alleged that it offered kickbacks to physicians for prescribing these drugs, including travel, cash, entertainment and meals at various speaking events, in an attempt to induce the doctors into prescribing the drugs.

GlaxoSmithKline

In 2012, drug maker GlaxoSmithKline pled guilty and agreed to pay $3 billion in fines for a number of violations pertaining to its various anti-depressants and diabetes drugs. Specifically, GSK was cited for marketing Paxil and Wellbutrin for conditions not approved by the FDA. GSK was also sanctioned for failing to disclose several possible hazards with its best-selling diabetes drug Avandia.

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