• DOJ Recoveries Reach $3.5 Billion in FY2015 as Qui Tam Lawsuits Continue to Grow
  • January 8, 2016 | Author: Scott S. Liebman
  • Law Firm: Loeb & Loeb LLP - Washington Office
  • For the fourth year in a row, the Department of Justice achieved more than $3.5 billion in settlements and judgments related to fraud and false claims, bringing the total secured from the False Claims Act to $26.4 billion since 2009. The pharmaceutical industry continues to contribute to DOJ recoveries, particularly due to kickback allegations.

    In fiscal year 2015, the Department of Justice brought in more than $3.5 billion in settlements and judgments from civil cases related to fraud and false claims - marking the fourth consecutive year the department surpassed $3.5 billion in cases under the False Claims Act. Since January 2009, the DOJ has secured $26.4 billion from the FCA, which Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department's Civil Division, calls the government's "most effective civil tool" to uncover fraud.

    The health care industry, particularly the pharmaceutical segment, was a big contributor to this year's total. The health care industry contributed $1.9 billion to the total, reflecting federal losses only. Since January 2009, the DOJ has recovered $16.5 billion in health care fraud, representing more than half the amount recovered since the 1986 amendments to the FCA. The DOJ attributed the successful recoveries to the Obama administration's emphasis on battling health care fraud. Claims in the health care industry related to improper care, paying kickbacks to health care providers or overcharging for goods and services provided by Medicare, Medicaid and other federal health care programs.

    The pharmaceutical industry contributed $96 million in settlements and judgments. Daiichi Sankyo agreed to pay $39 million to settle allegations of paying kickbacks to physicians to persuade them to prescribe its drugs. AstraZeneca paid $26.7 million and Cephalon paid $4.3 million to resolve allegations of underpaying rebates owned under the Medicaid Drug Rebate Program. They also agreed to pay an extra $23 million to state Medicaid programs for their losses. In another settlement, PharMerica agreed to pay $9.25 million over allegations that it solicited and received kickbacks from Abbott Laboratories for promoting Depakote to nursing home patients.

    The DOJ also supported its goal to use the FCA to address fraud by individuals. For example, in the health care industry, a California cardiologist agreed to pay $1 million to resolve allegations he solicited and accepted kickbacks from CareFusion for promoting the company's product and influencing recommendations for the National Quality Forum.

    Qui tam suits accounted for a significant portion of the recoveries ($2.8 billion). Whistleblowers filed a total of 638 qui tam lawsuits in FY2015, resulting in whistleblower awards of $597 million. Since 1986, the number of qui tam lawsuits has been on the rise. Since January 2009, $19.4 billion has been recovered through qui tam suits.