One common method that pharmaceutical companies utilize to gain a competitive advantage in the prescription drug marketplace is to provide “kickbacks” to health care professionals in exchange for an agreement to prescribe or purchase their highly profitable drugs. These kickbacks can range from straight up cash payments to free vacations to honorariums for serving on a sham “Speaker’s Bureau.”
Pharmaceutical companies that provide kickbacks are very likely to be in violation of the Federal Anti-Kickback Statute and other federal and state laws. The Federal Anti-Kickback Statute criminalizes the offering or receipt of kickbacks involving goods and services for which payment will be made through a government health care program such as Medicare, Medicaid, or TRICARE.
Violations of the Anti-Kickback Statute may form the basis for a qui tam lawsuit under the False Claims Act because claims submitted for payment to government health care programs are considered false claims under the False Claims Act when the underlying transactions are illegal under the Anti-Kickback Statute.
Real World Examples of Recent Pharmaceutical Kickback False Claims Act Cases:
- 2010: Alpharma paid $42.5 million to settle a False Claims Act lawsuit in which it was alleged that the company paid kickbacks and made misrepresentations about the safety of its drug, Kadian. The suit, brought by a whistleblower, specifically alleged that Alpharma paid health care providers to promote and prescribe Kadian. The whistleblower received $5.33 million from the settlement.
- 2009: Pfizer and its subsidiary paid $1 billion to settle kickback and off-label promotions claims in whistleblower lawsuits brought under the False Claims Act. The whistleblower suits alleged, in part, that Pfizer paid kickbacks to health care providers for the purpose of inducing the providers to prescribe Pfizer’s drugs. Six whistleblowers shared in an award of more than $102 million as a result.