FCA Legal News

Are Pharmaceutical Companies Responsible for the Opioid Crisis?

The city of Philadelphia believes so. City officials are looking to hold the pharmaceutical companies accountable for their part in the crisis by suing them under a city false claims act.

The lawsuit seeks to have the pharmaceutical companies pay for the city of Philadelphia's expenses for the treatment of residents addicted to opioids and suffering from opioid abuse disorder. "City agencies have incurred tremendous and avoidable costs trying to combat this crisis," City Solicitor Sozi Pedro Tulante said at a press conference. "Because it is our duty to protect the public from further harm, I believe we have no other choice than to file this lawsuit." The expenses are estimated in the millions of dollars.

City officials estimate that one-third of Philadelphia residents have received an opioid prescription within the last 12 months. That's 469,000 people. Accorrding to Dr. Thomas Farley, the city's health commissioner, "There's a legitimate use for prescription opioids in medical care, but nothing can justify this flood of prescribing these drugs."

Philadelphia has trained and equipped first-responders to treat opioid overdoses, funded addiction treatment programs, and increased funding for the city's criminal justice and prison systems. 

Now, city officials are demanding Philly gets its money back. It will be interesting to see if other municipalities follow suit.

UPDATE: EpiPen Rip Offs Continue

An update to our previous blog post: Mylan will pay $465 million in fines to settle claims brought by the U.S. Justice Department. In a rare instance of a corporation being the whistleblower, the drug company Sanofi first brought the matter to the U.S. Attorney's office in 2014 because it was selling a competing drug. Sanofi will receive $38.7 million as its share of the recovery.

EpiPen Rip Offs Continue

EpiPen pricing has been in the headlines often lately. The manufacturer, Mylan, keeps raising the price and ripping off patients. EpiPens went from costing $57 in 2007 to around $600 in 2016. With no generic option available, the company has no price ceiling. Now, it seems they have also been ripping off the government.

It appears that Mylan has been taking advantage of reimbursement rates with Medicare and Medicaid by miscategorizing its product. By law, pharmaceutical companies have to reimburse Medicare/Medicaid for 13% of the total cost of a generic drug that’s paid for by the programs. But for name brand drugs, pharmaceutical companies have to reimburse 23.1%. Mylan classified the EpiPen as generic and now Uncle Sam is calling.

Back in October, Mylan agreed to pay the US government $465 million without admitting any wrongdoing. It was the end of a long saga with Mylan and the company was quickly rewarded with a bounce in its stock price. As more information comes to light as to the extent of the fraud, however, Mylan is at serious risk of the settlement being voided.

States Want Their Share of Medicare Part D Recoveries

On May 17, 2017, 49 state attorney generals signed a letter to the Senate Finance Committee requesting appropriate legislation to allow for sharing of the Part D recoveries with the states.

Prior to January 2006, state Medicaid programs paid directly for outpatient prescription drug benefits for individuals covered by both Medicare and Medicaid. Because Medicaid is jointly funded, those payments included both federal and state dollars. If a state received a Medicaid recovery, it would share that recovery by remitting the federal portion of that recovery to the Federal government.

Since 2006, under Medicare Part D, the federal government now pays directly for these Part D drugs. However, the states still share in the costs through substantial monthly "clawback" payments. These payments stem from fraud and overpayment cases involving Part D drugs.

Over the last 10 years the states have contributed a combined total of approximately $80 billion in "clawback" payments to the Medicare Part D program. In 2017, those payments are expected to be over $11 billion. Despite their significant contribution, the states have yet to receive a single dollar from the recoveries.

Obama Administration Recovered Billions in Fraud Settlements

The Department of Justice has reported its False Claims Act numbers for 2016, and has announced that over its 8-year term, former President Obama's administration recovered more than $31.3 billion from companies that defrauded the government, more than the amount collected under the prior three administrations combined. This includes $4.7 billion in recoveries in FY 2016.

This amount largely comes from FCA settlements with health care companies such as GlaxoSmithKline LLC, Johnson & Johnson, and Pfizer, Inc for marketing drugs for unapproved uses and for overbilling federal health programs, including Medicare.

There were also billions recovered in settlements with global banks charged with defrauding federal mortgage insurance programs.

There is no reason to believe things will slow down, with 702 whistleblower cases filed in 2016. And Bracker & Marcus LLC can help you become the next successful whistleblower!