Under the False Claims Act, employees or citizens who have knowledge of fraudulent activities against the government can initiate a qui tam action to hold companies accountable for their illegal and fraudulent actions, and to reimburse the federal government. Over the years the basis of qui tam claims has evolved from mainly being defense contracts to more often than not, involving medical false claims in some form or another. As a result of qui tam lawsuits, whistleblowers, and False Claims Act guidelines, pharmaceutical companies have had to repay more than $7 billion to the federal government and individual states.
There are several ways in which the pharmaceutical sector defrauds the government. The law states that a pharmaceutical company or government contractor is liable under the False Claims Act for Medicare and Medicaid fraud in any situation that the government loses money either directly or indirectly. These situations include:
Clinical or medical trial fraud occurs when pharmaceutical manufacturers provide false data to the Food and Drug Administration (FDA) or withhold negative data from the FDA about efficacy of a pharmaceutical drug or medical device in clinical research trials to get FDA approval to sell and market the pharmaceutical drug or medical device.
FAILURE TO REPORT ADVERSE EVENTS OF MEDICATIONS OR OTHER PRODUCTS
The FDA collects information on adverse drug experiences that occur after a prescription medication is approved or marketed. Drug application holders and certain manufacturers, packers, and distributors for prescription and non-prescription drugs are required to submit specific adverse event and drug safety information to the FDA as set forth in the Federal Food, Drug, and Cosmetic Act (FDCA) and Title 21 of the Code of Federal Regulations (CFR).
