Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Business Crimes BulletinKickerFeaturesTopicsLitigationSectionsNewsLJN Newsletters

Pharmaceutical Companies, Off-Label Promotion And Qui Tam Actions

By Randall L. Christian, Jason H.Casell and Francisco T. Rivas
June 28, 2011

The False Claims Act (FCA), as amended by the Federal Enforcement Recovery Act of 2009 (FERA), prohibits knowingly presenting a false or fraudulent claim to the federal government, and extends to those who submit or “cause” the submission of such claims. In pharmaceutical actions, most false claims qui tam actions brought by whistleblowers involve off-label promotion, kickbacks, pricing allegations, and reimbursement abuses. Although these start out as civil lawsuits, they often end with the Department of Justice (DOJ) pressing charges against the pharmaceuticals manufacturer. That was the case in the recently settled whistleblower action brought against UCB SA, the manufacturer of the epilepsy treatment drug Keppra. The pharmaceuticals maker settled the suit by pleading guilty on June 10 to a misdemeanor charge of misbranding its product by promoting its use for unapproved purposes. The company was forced to pay civil and criminal damages of more than $34 million.

The financial incentives created by the FCA have led to an explosion of whistleblower lawsuits and federal investigations. As of September 2009, the DOJ was actively investigating 996 whistleblower cases, up from 875 in 2008. Health-care fraud represents the majority of these cases. For example, in 1987, only three of the 30 total new federal qui tam lawsuits, or 10%, of the cases involved allegations of health-care fraud. In 2009, the total number of federal qui tam suits jumped to 433; a whopping 280, or nearly 65%, of those suits alleged health-care fraud. Partly in response to this explosion of qui tam activity, the federal government authorized $165 million to permit the DOJ to hire fraud prosecutors and investigators for 2010 and 2011. The combination of huge amounts of money at stake for companies, large recoveries for whistleblowers and their attorneys, and vast government resources to prosecute these cases constitute the elements of a perfect storm for pharmaceuticals companies.

This premium content is locked for LJN Newsletters subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

Use of Deferred Prosecution Agreements In White Collar Investigations Image

This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.

The DOJ's New Parameters for Evaluating Corporate Compliance Programs Image

The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.

Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability Image

This article explores legal developments over the past year that may impact compliance officer personal liability.

Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.