Supreme Court Might Review Whistle-Blower Case That Could Set Limits On Lawsuits Against Drugmakers, Biotech Firms

Main Category: Litigation / Medical Malpractice
Also Included In: Pharma Industry / Biotech Industry
Article Date: 10 Dec 2008 - 4:00 PDT

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The U.S. Supreme Court is considering reviewing a case that could set new limits on whistle-blower lawsuits against drugmakers, biotechnology companies and other businesses, Bloomberg reports. The court has asked the Department of Justice for advice on the suit, which alleges that a North Carolina water district fraudulently sought federal money for storm cleanup. The case is based on the U.S. False Claims Act, which allows whistle-blowers to file fraud claims on behalf of the federal government and share in any damages.

Bloomberg reports that the "central question is whether a False Claims Act suit can go forward even though the central allegations have previously been made public in state documents." The act bars lawsuits only when allegations have been made public by the federal government, not by state governments. The 4th U.S. Circuit Court of Appeals has agreed with that provision, but lower courts have disagreed.

The Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organization have said that the circuit court decision might cause lawsuits to "skyrocket." According to a brief filed by the two groups, health care fraud cases filed under the law resulted in $1.1 billion in settlements and judgments in 2007 (Stohr, Bloomberg, 12/8).

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