With all that money the US Treasury is collecting from health care fraud (see here), a new study urges the Australian government to pass legislation that would emulate the US False Claims Act and enable whistleblowers to file lawsuits.
A couple of reasons are cited for this conclusion. There is growing government spending on meds - from roughly $3.5 billion in the 1998-99 fiscal year to $9 billion in 2009-10 - and Australia has entered a "period of financial stringency." The other is that the "Australian pharmaceutical market is unlikely to be immune from US-style false claims and fraud, if only because most of the major drug companies proven to have engaged in such conduct against the US government also dominate the Australian market," according to the study, which appears in The Medical Journal of Australia (read here).
As an example, the authors point to a recent proceeding that found Merck trained sales reps to minimize concerns about Vioxx side effects and created a publication called the Australasian Journal of Bone and Joint Medicine, which was neither peer-reviewed nor independent. Meanwhile, they note that a a report by the University of Melbourne and KPMG estimated the total amount of money lost to corporate fraud in Australia, including in the health care sector, was about $383 million in 2010 and growing at an annual rate of 7 percent, but only a third of that is detected.
"Yet in Australia (unlike the US) large-scale anti-fraud and anti-competitive prosecutions in the pharmaceutical sector have been rare," the write. They point to one example, which occurred in 2001, when the Australian Competition and Consumer Commission prosecuted Roche Vitamins Australia, BASF Australia and Aventis Animal Nutrition for a global price-fixing scheme to supplying vitamins in animal feeds, which inflated general food prices.
There is, indeed, debate about whistleblower lawsuits. The feds and many disaffected pharma employees say the False Claims Act provides a needed mechanism for uncovering bad behavior, although critics say prosecutors sometimes interpret provisions too broadly and that the law encourages payouts to informants that are outsized (read more here and here). Nonetheless, health care fraud does occur.
However, we should note that the authors - Thomas Faunce, Gregor Urbas and Lesley Skillen - developed their paper with a grant from the Australian Research Council, and that Skillen, in particular, is a senior partner with Getnick and Getnick, a US law firm that handles false claims lawsuits. She represented Cheryl Eckard, a former global quality assurance manager at GlaxoSmithkline who filed a whistleblower lawsuit. The drugmaker recently agreed to pay $750 million in penalties for manufacturing fraud (see this).
pic thx to katerha on flickr