The U.S. federal government’s crackdown on companies in the health care space shows no signs of slowing down as indicated by an announcement by the Department of Justice (DOJ) that it has achieved a settlement with Opko Health Inc. and Bioreference Health LLC regarding allegations of induced referrals.
Mallinckrodt plc agreed to pay $260 million to resolve separate U.S. allegations that it violated the False Claims Act by underpaying Medicaid rebates for its H.P. Acthar Gel (corticotropin) and that it violated the anti-kickback law by using a foundation as a conduit to illegally pay Medicare patients’ copay subsidies.
The U.S. Department of Justice (DOJ) reported Feb. 1 that it had recouped more than $5.6 billion in settlements in connection with False Claims Act litigation (FCA) in 2021, with $5 billion of that amount derived from action against the health care industry.
Kaléo Inc. agreed to pay $12.7 million to end whistleblower allegations that the Richmond, Va.-based company caused the submission of false claims for Evzio (naloxone hydrochloride), an injectable drug used to reverse opioid overdoses.
Enforcement against false claims filed with federal health care programs continues to snare a number of testing clinics as demonstrated by the recent news that a clinical lab has come to terms with federal prosecutors over urine drug testing. MD Spine Solutions LLC, of Reno, Nevada, has agreed to pay up to $16 million to settle allegations that it performed unnecessary urine drug tests, a case brought to the attention of the courts not by a former employee, but by Omni Healthcare Inc., which has been active in the False Claims Act space, thus highlighting the hazards of third-party litigation to clinical lab operators.
A change of presidential administrations often brings a significant change in regulatory policy, and the Granston memo did just that shortly after the Trump administration took office in 2017. However, the Department of Justice (DoJ) has dismissed fewer whistleblower (qui tam) lawsuits against the private sector recently, a trend that Jonathan Phillips of Gibson Dunn said was evident before the Biden administration took over.
Rick Bright, who filed a whistleblower complaint last year against the U.S. Department of Health and Human Services (HHS) after he was removed from his position as director of the Biomedical Advanced Research and Development Authority (BARDA), reached an undisclosed settlement with HHS, the U.S. Office of Special Counsel reported Aug. 9.
Qui tam litigation holds a dear place in the hearts of U.S. federal prosecutors and whistleblowers alike, but the volume of these cases ebbed as the COVID-19 pandemic swept across the nation. A report by Gibson, Dunn & Crutcher LLP makes clear, however, that despite the pandemic-induced drag, these cases are resuming their historical pace, and makers of drugs and devices are once again the most frequently targeted type of business.
