False Claims Act

By Reuben Guttman and Oderah Nwaeze. Reuben Guttman is a Director at the firm of Grant & Eisenhofer and heads the firm's False Claims Act litigation group. He is a Senior Fellow and Adjunct Professor at the Emory Law School Center of Advocacy and Dispute Resolution. Oderah Nwaeze is member of the Grant & Eisenhofer False Claims Act Litigation Group, and a 2011 graduate of Emory Law School.

Buried in President Obama’s healthcare reform law, the Patient Protection and Affordable Care Act (PPACA), is a measure called the Physician Payments Sunshine Provision or the “Disclosure Law.” This law requires the public disclosure of payments made to doctors by pharmaceutical and medical device manufacturers.  Since even small gifts can compromise a doctor’s objectivity, a patient should know whether his physician has received money and/or gifts from drug or device companies.  Recent civil prosecutions of the pharmaceutical and medical device industries under the False Claims Act (FCA), resulting in pharmaceutical giants paying millions of dollars to resolve allegations that they paid kickbacks in order to induce the writing of prescriptions, demonstrates that the transparency required by this law is long overdue.

The FCA allows private citizens with knowledge of a fraud on the government to bring suit in the name of the government. Whistleblower cases brought under the FCA against some of the world's largest pharmaceutical companies have surfaced allegations and information raising real concerns that illegal marketing schemes including off label marketing -- or marketing a drug for purposes outside its indication -- and kickbacks in form of payments made to doctors under the guise of research studies -- have caused billions of dollars of prescriptions to be written for drugs that are not needed or that may actually cause injury or illness with additional costs for treatment further burdening our nation's health care system. Within the last five years alone, Pfizer, AstraZeneca, Boston Scientific, Eli Lilly, and Biovail paid a combined total of $4.3 billion to settle claims of unlawful marketing.  Although Pfizer's share was a record $2.3 billion, the company posted revenues of more than $171 billion for the drugs that were illegally marketed. To a large degree, these settlements -- even with the huge monetary sanctions -- only serve to highlight problems rather than fully address them.