The False Claims Act and Qui Tam Lawsuits
Whistleblowers are individuals who have knowledge of fraud, and report this information to the government. Whistleblowers can bring a so-called “qui tam” lawsuit, a civil lawsuit filed under the False Claims Act, on behalf of the United States government. Qui tam lawsuits provide a way for private citizens to help the government identify various types of fraud, including Medicare and Medicaid fraud, defense contractor fraud and other types of fraud that steal from government funds and taxpayers.
The whistleblower attorneys at Parker Waichman LLP keep up-to-date with whistleblower lawsuits and settlements. The firm continues to offer free legal consultations to individuals with questions about filing a whistleblower lawsuit.
When a whistleblower decides to file a qui tam lawsuit, the case is “under seal” so that government can confidentially probe the allegations. The federal government, after reviewing the allegations, decides whether to “intervene” in the qui tam case. If the government chooses not to join the lawsuit, the whistleblower can pursue the case privately and possibly obtain monetary compensation. However, qui tam cases tend to be more successful when the government intervenes.
False Claims Act violations can cost liable defendants as must as three times the dollar amount defrauded. Individually, each false claim can lead to civil penalties between $5,000 and $10,000 each. The whistleblower can obtain 15 to 30 percent of damages recovered.
Since being a whistleblower presents professional risks to private citizens, the law provides certain whistleblower protections under the False Claims Act barring acts of retaliation, which includes being fired, demoted or harassed for reporting fraud.
Whistleblower Lawsuit Against Baxter Leads to $18M Settlement
Recently, Baxter Healthcare Corp. reached an $18 million settlement with the federal government to resolve allegations that it violated the False Claims Act and the Federal Food, Drug, and Cosmetic Act (FDCA). The allegations stemmed from a whistleblower who filed a qui tam lawsuit alleging that the company repeatedly ignored reports of moldy air filters at its Marion, North Carolina facility. The whistleblower reported the issue multiple times to management, as the air filters were in a facility that produces sterile products such as IV therapies, premixed drugs and renal therapies. The whistleblower will receive $430,000 for his efforts.
According to a Jan. 12, 2017 press release issued by the Department of Justice, Baxter will pay $18.158 million, including $16 million in penalties and forfeiture, and a civil settlement under the False Claims Act totaling $2.158 million. Baxter admitted to violating the Federal Food, Drug, and Cosmetic Act (FDCA) by failing to comply with current Good Manufacturing Practices. The company entered into a deferred prosecution agreement with the United States government.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, commented on the settlement stating “Following current good manufacturing practices is essential to ensure the safety and efficacy of our drugs,” according to the release. “Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility.”
“Despite notification by an employee of potential contamination concerns, Baxter was poorly focused on instituting sufficient safety standards for their products,” said Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, according to the press release. “Today’s resolution reflects (the court’s) commitment to hold accountable drug companies that violate manufacturing standards and wrongly profit from those violations.”
The qui tam lawsuit was filed under the False Claims Act, alleging that the IVs had been manufactured illegally, since they were produced near moldy air filters. These adulterated products ultimately caused false claims to be submitted to federal programs such as Medicare and Medicaid, the suit alleged.
“FDA’s manufacturing standards are designed to ensure the quality, safety, and efficacy of drugs distributed to American consumers, and FDA expects pharmaceutical companies to correct deficiencies in an expedited manner,” said Special Agent in Charge Justin Green of FDA’s Office of Criminal Investigations, Miami Field Office, according to the press release. “We will remain vigilant in our efforts to protect the U.S. public health from potentially dangerous products.”
Filing a Whistleblower (Qui Tam) Lawsuit
Whistleblowers play a crucial role in identifying corporate healthcare fraud and other actions that cause false claims to be submitted to federal programs such as Medicare and Medicaid. Whistleblowers are protected from retaliation, and can recover compensation for their efforts. If you or someone you know is interested in filing a whistleblower lawsuit, contact Parker Waichman today. Our experienced attorneys offer free, no-obligation case evaluations. For more information, fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529).