The US Supreme Court may review a case that could set new limits on whistle-blower lawsuits against drugmakers and biotechs, among others, Bloomberg News reports.
The court has asked the US Department of Justice for advice on the suit, which alleges that a North Carolina water district fraudulently sought federal money for storm cleanup (see order). The case is based on the US False Claims Act, which allows whistleblowers to file fraud claims on behalf of the federal government and share in any damages.
The central question is whether a False Claims Act suit can go forward even though the central allegations have previously been made public in state documents, according to Bloomberg. The act bars lawsuits only when allegations have been made public by the federal government, not by state governments.
The 4th US Circuit Court of Appeals has agreed with that provision (see opinion), but lower courts disagreed. Both PhRMA and BIO have said the circuit court decision might cause lawsuits to "skyrocket." According to a brief filed by the two groups, health care fraud cases filed under the law resulted in $1.1 billion in settlements and judgments in 2007 (here is the brief filed by PhRMA and BIO).
pic thx to katerha on flickr
6 Comments
$1.1 Billion is a lot of money but it's only about 0.3% of US prescription drug sales.
Others will know more than I about this issue, but my understanding is that the FCA criteria are already very strict. I thought I understood that a plantiff has to bring forth information that is _not_ otherwise in the public record, and have very specific documentation of government purchases, and so on.
Clarification appreciated.
Hi Justice,
Yes, you're referring to Rule 9B, which I've written about here. That refers to public disclosure that a relator, or whistleblower, may have allegedly relied upon to file a case, as opposed to having firsthand knowledge. In this instance, the issue is whether federal courts have jurisdiction over False Claims Act suits based on revelations in administrative reports or audits issued by state or local governments, as opposed to the federal government.
Hope this helps, ed
And just to clarify, a loyal reader has sent me this note:
"There is an original source exception to the federal False Claims Act that allows whistleblowers (under certain circumstances) with direct and independent knowledge to file claims regardless of whether or not claims/fraud have publicly disclosed. In the case referenced above, the situation under review is one where the relators are not considered 'an original source.' Rule 9B refers to pleading fraud with particularity."
Will pharma ever stop in their efforts to derail the best law ever in stopping fraud against the public? Pharma is such a reputable industry! Let's review the great things they have done to defraud lately. Now they claim that we should not be able to turn in the fraud because that money is being used to develop "new cures"! How rich!
ZAre these the "new" cures like Nexium which was a single isomer version that offered nothing over Prilosec except and effective patent dodge and raised costs to millions? I guess this must be their greatness? How about all the diseases with cures developed through taxpayer dollars by the National Centers for Disease that they have commandeered and screwed taxpayers on for profit or should I say extreme profit? Gotta love the extreme costs of Erbitux? Some thing its too expensive to live with the cost of these types of drugs. I know they should make a reasonable profit, but please quit with the nonsense about how much it costs to develop drugs and talk about how much it costs to market drugs with little benefit.
Schemes to defraud are so often used to market off-label and kickback schemes rolled out to drive "share" . These charlatons have the nerve to use political action committees disguised as "public" interest groups so as to fool the consumer and public as they do this as well.
Let's get real, shall we?! I hope the Court refuses to hear this nonsense and tells pharma to shove it.
If this were a Batman movie, their lawyerswould be the Riddler or the Joker! How cute!
Any takers?
Sure, let 'em off! To Hades with trying to do the right thing! These companies need to be able to do anything they need to in order to make their numbers! Criminal? No big deal! We don't want the little guys to have any rights. I know of countless numbers of ethical, honest, hard-working people who have been fired for daring to ask questions or raise issues. Who protects them? Nobody!!