More Than 500 Backlogged Whistle-Blower Cases Allege Health Care, Drug Company Fraud

Main Category: Litigation / Medical Malpractice
Also Included In: Pharma Industry / Biotech Industry;  Public Health
Article Date: 03 Jul 2008 - 12:00 PST

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Whistle-blower lawsuits alleging that pharmaceutical companies and government contractors defrauded the federal government have created a backlog of more than 900 cases at the Department of Justice, the Washington Post reports. According to the Post, more than 500 of the cases involve the health care and pharmaceutical industries, as well as Medicare and Medicaid.

Lawyers involved in the backlogged disputes say DOJ "cannot keep pace with the surge in charges brought by whistle-blowers," the Post reports. Since 2001, 300 to 400 civil cases have been filed each year; however, the 75-lawyer unit that reviews the allegations investigates about 100 cases annually. Whistle-blowers routinely wait 14 or more months to find out whether DOJ will get involved in the case, during which time whistle-blowers are not allowed to discuss or disclose the existence of such disputes. The government rejects about three-quarters of the cases it receives, saying the majority lack merit.

Some of largest the false-claims cases include a $650 million settlement reached this year with Merck in connection with an alleged failure to repay Medicaid rebates and a $515 million deal with Bristol-Myers Squibb to cover illegal drug pricing and marketing. The Post reports, "Even bigger lawsuits containing potentially explosive allegations are waiting in the wings."

Deputy Assistant Attorney General Michael Hertz last month told Congress that "the number and increased complexity of the fraud schemes presented to the department, combined with the volume of cases now under review, certainly present challenges." Patrick Burns, a spokesperson for Taxpayers Against Fraud, said, "Even if no new cases are filed, it might take 10 years for the Department of Justice to clear its desk. Cases in the backlog represent a lot of money being left on the table." Advocates of federal intervention to address the backlog note that verdicts and settlements in whistle-blower lawsuits have returned nearly $13 billion to the U.S. government in recent years (Johnson, Washington Post, 7/2).

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