Case Evaluation

Speak to a Whistleblower
specialist today.


Pharmaceutical

Fraud committed by pharmaceutical companies has been a common type of False Claim Act violation against both the states and federal government in recent decades and has resulted in billions of dollars recovered for taxpayers and millions rewarded to whistleblowers.  Experts believe we have only scratched the surface on the frauds committed, and several more billion worth of violations remain undetected.

The schemes that these multi-billion dollar drug manufacturers have used to defraud the government are so varied it is difficult to list them all.  Anyone working in or around the pharmaceutical industry, including sales representatives, sales managers, compliance officers, other pharmaceutical company employees, physicians, nurses and/or employees of hospitals or physician practices should be on the lookout for any foul play by a drug company.

Some of the more common ways pharmaceutical companies violate state and federal False Claims Acts include:

  • Off-Label marketing of drugs: Pharmaceutical drugs are highly regulated as to their intended use by the U.S. Food and Drug Administration (FDA).  Before any drug can be sold, it must be approved by the FDA, who will determine exactly which medical problems it may be used to treat. The approved use of the drug by the FDA is known as its “label” or “indication”
  • Although doctors may prescribe a certain drug for treatment of different medical conditions, known as “off-label” use, pharmaceutical companies are restricted from marketing or promoting their drugs to physicians for any use other than that approved by the FDA.  This is known as “off-label marketing” and has resulted in hundreds of millions of dollars paid by pharmaceutical companies to the government in False Claim cases brought by whistleblowers.
  • Illegal Kickbacks: Another common scheme used by pharmaceutical companies is to offer financial incentives to doctors or hospitals to encourage them to prescribe their drugs to patients, or to insurance companies to get their drugs on the insurer’s preferred drug list. 

These types of financial incentives or kickbacks can be a violation of the Federal Anti-Kickback statute, Federal and State False Claims Acts, as well as various other federal and state laws.

Some examples of how pharmaceutical companies give kickbacks to doctors and hospitals include:

  • Bonus payments or gifts
  • Free or drastically discounted vacations
  • Extravagant dinners and lunches
  • Tickets for sporting events, concerts and golf outings
  • Payments for attending conferences, seminars or other meetings
  • Excessive payments for serving on “advisory boards”
  • Joint business ventures between pharmaceutical companies and hospitals or physicians
  • Free samples of drugs, which physicians then sell to patients.

Inflating the Price of Drugs

Pharmaceutical companies sometimes defraud Medicare and State Medicaid programs by overcharging them for drugs and using the additional funds to give kickbacks to pharmacists and insurance companies.  They do so by falsely reporting their Average Wholesale Price (AWP), which is used to determine how much Medicare will pay for drugs.

Such schemes are an obvious violation of the Federal Anti-Kickback statute, as well as Federal and State False Claims Acts, however they do occur so whistleblowers should be on the lookout for a potential Qui Tam case.

Best Price Fraud 

Pharmaceutical companies selling their drugs to Medicare must agree to sell them at the lowest price available to wholesalers, pharmacists, insurance carriers and other private sector customers.  Sometimes they reduce the price to insurers, wholesalers and pharmacists in order to encourage more sales. 

Offering these reduced prices without informing or offering rebates to Medicare is a violation of the Medicare and Medicaid Best Price requirement and can be a violation of Federal and State False Claims Acts as well.

Pharmaceutical Benefits Manager Fraud

Pharmaceutical Benefits Manager firms assist insurance carriers in managing claims for prescription drug plans, as well as negotiating discounts and rebates with pharmaceutical companies in order to reduce costs. 

They are paid hundreds of millions of dollars in fees but have been named in numerous False Claims Act cases in recent years for fraud ranging from illegal rebate and discount agreements with drug companies to offering kickbacks to insurers, shorting prescriptions, switching medications and trying to conceal failures to meet contractually mandated deadlines for filling prescriptions.

Legal Options

If you have any information about fraud committed by a pharmaceutical company such as any of the examples above, contact us today for a confidential evaluation of your False Claims case.