MERCK: A Groundbreaking Case

Whistleblower Action Network attorneys established several landmarks through their work on the qui tam case against Merck & Co.

One of the Largest Qui Tam Recoveries in History

Merck paid more than $400 million to the federal government and 49 states to settle claims that the company paid kickbacks and violated laws related to prescription drug pricing. Merck ultimately paid an additional $250 million in a related case, bringing the government's total recovery to more than $650 million. At the time the case settled in early 2008, this was the second highest amount ever recovered in conjunction with a qui tam case, and it remains one of the largest qui tam recoveries under the False Claims Act.

A New Investigatory Model

The Merck case established a new collaborative relator-federal-state enforcement model for investigating and prosecuting qui tam cases involving nationwide fraud. Although federal prosecutors have historically taken the lead in qui tam cases, the Merck case was one of the first instances in which the states played an early and integral role in complementing the federal investigation. Whistleblower Action Network attorneys Steve Cohen and BethAnne Yeager, along with co-counsel Mark Kleiman, helped facilitate the coordinated federal-state investigation, and Whistleblower Action Network attorney Tim Terry, who was Nevada's Chief Deputy Attorney General during the Merck case, spearheaded the states' investigation. This new model of federal-state cooperation helped make the most efficient use of government resources and maximize the recovery.

Establishing New Legal Theories

This case was one of the first False Claims Act cases against a pharmaceutical company to successfully pursue Medicaid Best Price fraud. Pharmaceutical companies are required to sell drugs to the government at the best (lowest) price available to private purchasers, but Merck engaged in elaborate schemes to disguise the true best price on several of its popular drugs. The Merck case helped establish that such schemes violate the False Claims Act.

Recognition as Lawyers of the Year

Whistleblower Action Network attorneys Steve Cohen and BethAnne Yeager, along with co-counsel Mark Kleiman, received the 2008 Lawyer of the Year Award from Taxpayers Against Fraud as a result of their work on the case. Taxpayers Against Fraud is a national organization dedicated to promoting use of the False Claims Act, and the Lawyer of the Year Award is its highest recognition for qui tam attorneys.

For an in-depth look at the groundbreaking Merck case, visit http://www.drugfraudsettlement.com/.