Multiple Whistleblowers and First-to-File

April 27, 2016

Pharmaceutical giants Wyeth and Pfizer, Inc. agreed to pay $784.6 million to resolve allegations that Wyeth violated the False Claims Act by reporting to the government false prices on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV.  Under the state Medicaid programs, drug companies must provide Medicaid rebates based on the best prices they offer other customers.  According to the government, Wyeth hid from Medicaid bundled discounts it provided to thousands of hospitals across the country on Protonix Oral and Protonix IV.  By failing to report these bundled discounts, Wyeth allegedly avoided paying hundreds of millions of dollars in rebates.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Lauren Kieff, a former hospital sales representative for AstraZeneca and William St. John LaCorte, a physician practicing in New Orleans.  They will collectively receive a whistleblower award of roughly $98 million from the proceeds of the federal and state settlements.  Whistleblower Insider

April 27, 2016

Michigan and 34 other states reached an agreement in principle to settle allegations against Wyeth, a subsidiary of Pfizer, Inc. The settlement will resolve allegations that Wyeth knowingly underpaid rebates owed under the Medicaid Drug Rebate Program for the sales, Protonix Oral and Protonix IV between 2001 and 2006. Both are drugs that are used to treat conditions such as acid reflux. Under the settlement Wyeth agreed to pay $784.6 million to the United States and the States. Over $371 million of this amount will go to the Medicaid Program. The settlement stems from two whistleblower lawsuits which were filed in the United States District Court for the District of Massachusetts. The United States, 35 states (including Michigan) and the District of Columbia intervened in the lawsuits. NY, NJ, MI, WA

October 7, 2015

Kentucky-based nursing home pharmacy PharMerica Corp. agreed to pay $9.25 million to resolve allegations it violated the False Claims Act by soliciting and receiving kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the anti-epileptic prescription drug Depakote for nursing home patients.  The settlement is part of the continuing fallout of the $1.5 billion settlement Abbott entered into with the government in May 2012 to resolve Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including PharMerica.  The settlement partially resolves allegations raised in two whistleblower lawsuits brought by former Abbott employees Richard Spetter and Meredith McCoyd under the qui tam provisions of the False Claims Act.  Ms. McCoyd will receive a whistleblower award of $1 million from the federal share of the settlement amount. Whistleblower Insider

September 21, 2015

Non-profit healthcare organization Adventist Health System agreed to pay $115 million to settle allegations it violated the False Claims Act by maintaining improper compensation arrangements with referring physicians and by miscoding claims.  The allegations originated in two whistleblower lawsuits filed by former Adventist hospital employees Michael Payne, Melissa Church and Gloria Pryor under the qui tam provisions of the False Claims Act.  The will receive a yet-to-be-determined whistleblower award from the government’s recovery. DOJ

June 24, 2015

For-profit education company Education Affiliates agreed to pay $13 million to settle charges it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid.  The Maryland-based company operates 50 campuses under various trade names, including All State Career, Fortis Institute, Fortis College, Tri-State Business Institute Inc., Technical Career Institute Inc., Capps College Inc., Driveco CDL Learning Center, Denver School of Nursing and Saint Paul’s School of Nursing.  According to the government, the company engaged in a variety of fraudulent acts to increase admissions including admitting unqualified students, creating false high school diplomas, falsifying students’ federal aid applications, and referring prospective students to “diploma mills” to obtain invalid online high school diplomas.  The allegations first arose in five whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  As part of this resolution, the five whistleblowers will receive whistleblower award payments totaling approximately $1.8 million.  Whistleblower Insider

June 25, 2014

Omnicare Inc., the nation’s largest provider of pharmaceuticals and pharmacy services to nursing homes, agreed to pay $124M to resolve charges it violated the Anti-Kickback Statute and the False Claims Act by providing improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to elderly Medicare and Medicaid patients. The government’s action against Omnicare originated with two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act. The first whistleblower, former Omnicare employee Donald Gale, will receive roughly $17M out of the government’s recovery. Whistleblower Insider

EMC - Procurement Fraud/Education ($95.5 million)

A Constantine Cannon attorney represented two whistleblowers in a False Claims Act case alleging Education Management Corporation violated the recruiter incentive compensation ban, enrolling students regardless of whether they were suitable candidates.  In November 2015, the company agreed to pay $95.5 million to settle the action, the largest False Claims Act settlement to date involving the Department of Education.  The two whistleblowers (along with several others) received a whistleblower award of $11.3 million.  Read more -- Business Insider, DOJ, PR Newswire, CC.