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Since 2000, the price of a drug used to treat a rare infant seizure disorder has gone up from $40 to $39,000 — a 97,000 percent increase. A medical fraud whistleblower lawsuit says this price hike, and the massive profits for a drug company that came along with it, were the result of bribing doctors and a culture of selling the drug “at all costs,” according to CNN.
The U.S. Department of Justice recently intervened in the lawsuit, which was originally filed by two employees of the company. The medicare fraud whistleblower lawsuit Plaintiffs in the action claim Questcor Pharmaceuticals, now called Mallinckrodt, enacted a complex and allegedly unlawful strategy to market H.P. Acthar Gel, a drug used to treat infantile spasms.
Last year, CNN reportedly investigated that Medicare spending on Acthar had increased over tenfold in six years, to a total of $2 billion in spending on the drug. Allegedly, some of this spending amounted to Medicare fraud.
The whistleblowers argue that instances in which the drug was prescribed spiked because pharmaceutical representatives had bribed doctors to prescribe the drug to patients, often at the expense of Medicare, in the form of reimbursements from the program.
The medicare fraud whistleblower lawsuit goes on to say that this effort “has cheated the federal government out of millions of dollars that should not have been paid, thereby enriching [the company].” Allegedly, customers were also negatively affected — the whistleblowers claim that the company subjected patients to “unapproved, unsafe, and ineffective uses of H.P. Acthar Gel.”
According to the whistleblowers, the drug promoted Acthar not only for use in infant seizures, but in rheumatoid arthritis, multiple sclerosis, and other conditions.
Additionally, the whistleblowers accuse Mallinckrodt, then Questcor, of lying to the Food and Drug Administration in an effort to promote the drug to greatest effect. Additionally, the drug company allegedly took extensive action to conceal the kickbacks it was paying to doctors who prescribed the drug.
The medicare fraud whistleblower lawsuit argues that these allegedly illegal actions have been going on since 2007.
Mallinckrodt acquired Questcore in 2014, and according to the lawsuit, the purchase of the company did not stop the allegedly illegal activities around Acthar, and these activities have allegedly “knowingly been continued since the merger and acquisition of Questcor by Mallinckrodt.”
CNN says that Mallinckrodt “sought to distance itself from Acthar’s previous owner, Questcor,” noting that the company stated that “the allegations pertain principally to legacy Questcor conduct” and not conduct for which Mallinckrodt is primarily responsible.
However, CNN stresses that one of the former employees who brought forward the whistleblower lawsuit continued to work for the drug company after the 2014 merger, and only left the company in 2017, which could perhaps contradict Mallinckrodt’s assertion that the allegations were in the past.
Given the potential gravity of the situation, the Department of Justice has intervened after reviewing whistleblower claims and investigating company documents and information. The drug company has expressed displeasure with this move, but has agreed to cooperate, says CNN.
Jennifer Arlen, law professor at New York University, told CNN that though the DOJ’s involvement in the lawsuit is a “bad sign” for the company. She says the trick in this whistleblower lawsuit will be establishing that Questcor’s involvement with doctors over the seizure drug did indeed amount to bribery and kickbacks, as opposed to legitimate business relationships, a task which could reportedly prove tricky.
Whistleblower lawsuits, also known as qui tam lawsuits, are a major way in which wrongdoing within companies come to light — employees or those with inside knowledge of a company can come forward and expose wrongdoing by an organization. For their work, whistleblowers can receive compensation if the action results in a settlement or judgment.
In general, whistleblower and qui tam lawsuits are filed individually by each plaintiff and are not class actions. Whistleblowers can only join this investigation if they are reporting fraud against the government, meaning that the government must be the victim, and that the alleged fraud should be a substantial loss of money.
Do YOU have a legal claim? Fill out the form on this page now for a free, immediate, and confidential case evaluation. The attorneys who work with Top Class Actions will contact you if you qualify to let you know if an individual qui tam lawsuit or whistleblower class action lawsuit is best for you. Hurry — statutes of limitations may apply.
This article is not legal advice. It is presented
for informational purposes only.
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If you believe that you have witnessed fraud committed against the government, you may have a legal claim. Whistleblowers can only join this investigation if they are reporting fraud against the government, meaning that the government must be the victim, and that the alleged fraud should be a substantial loss of money.
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