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