Focus on Fraud: Healthcare

Each month we will highlight a particular business area or industry that has been, or should be, the subject of government fraud cases. The government often learns about fraud involving government funds from whistleblowers or other insiders.

This month, we focus on healthcare, and in particular, pharmaceutical companies, which continue to be the target of a number of investigations by the government. The following companies reported recent government investigations, cases and settlements:

• The Department of Justice subpoenaed Merck as part of a criminal investigation into its sales and marketing of Temodar, PegIntron, and Intron A, all former Schering-Plough products. 

• In June 2011, HHS-OIG (Department of Health and Human Services Office of the Inspector General) subpoenaed Odyssey HealthCare, Inc., one of the largest providers of hospice care in the U.S., a third time for documents related to continuous care services. Gentiva Health Services, Inc. acquired Odyssey last year.

• Also in June 2011, the Western District of Texas U.S. Attorney gave VITAS Healthcare, another of the nation’s largest hospice providers, a sealed qui tam complaint. VITAS, a part of Chemed Corporation, had been asked by government attorneys for documents related to its hospice services since 2005.

• Baxter has announced investigations by U.S. Attorneys for the Northern District of California and the Eastern District of Pennsylvania, as well as an inquiry from the Department of Justice and SEC regarding the company’s compliance with the U.S. Foreign Corrupt Practices Act.

• Hospira has announced that the FDA is continuing to inspect its pharmaceutical and device manufacturing facilities in North Carolina for quality control and other inadequacies. Hospira is also working with the FDA regarding alarm failures on its infusion pumps.

• The Department of Justice has taken the lead in cases against Abbott for its sales and marketing of Depakote.

• Government attorneys are investigating Wyeth, now part of Pfizer, for its promotions of Protonix, Rapamune, Lyrica and Zyvox.

• In other news, Bristol-Myers Squibb announced that it learned in March 2011 of a qui tam complaint brought under the California Insurance Frauds Prevention Act, rather than any false claims acts.

Since most government investigations into pharmaceutical fraud may have been initiated by whistleblowers, potential cases must be carefully examined to ensure the information we receive involves practices and companies, which have not been the subject of government investigations. We encourage anyone with knowledge potential fraud contact us. Please remember that we do not represent you until we enter into a written retainer agreement.