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December 01, 2010 (Vol. 30, No. 21)

Whistleblowers Take On Off-Label Marketing

Widely Reported Successes and Significant Financial Rewards Breeding More Lawsuits

  • The Tip of the Iceberg?

    The FCA has long provided an incentive and a safe haven for relators to bring fraud and abuse to the government’s attention. Why, then, does there appear to be a 2010 increase in the number, type, and size of claims brought by whistleblowers, particularly in off-label marketing cases?

    While there may be many contributing factors (including an increase in the use of wiretaps and the increased scope of civil investigative demands), we think there are two primary reasons for the trend. The most clear of these is simply an overall change in the healthcare enforcement environment.

    Past whistleblower success is breeding more disclosures, a more vigilant press is reporting those successes, and prosecutors’ offices are cooperating now more than ever, resulting in more resources to investigate relators’ claims. A greater allocation of resources also means the government can pay attention to and even investigate a greater number of whistleblower claims, rather than those with easy targets or which result in a direct harm to patients.

    Courts, too, may be in on the action—more frequently extending the time governments have to investigate whistleblower claims. This may explain the long-term and coordinated effort involved in cases like the Wyeth Rapamune suit, which is still in its nascent stages as far as the court’s docket shows.

    The second reason is that we are now seeing that more whistleblower actions have very little to do with the 2010 environment. Simply put, it takes time to investigate a relator’s claims of fraud and abuse. Often, a relator sees something she believes is "not quite right." However, to file a complaint that will get a prosecutor’s attention, she must first investigate her claim, hire an attorney, and meet with the government. Then the government—usually with many state and federal authorities coordinating efforts—takes its own time to review the claims and conduct its own investigation.

    Since the statute of limitations for most criminal cases is five years and FCA cases may be brought within six years of a filed claim, the government does not have to make an immediate decision whether the suit has merit. This year’s interventions are the result of whistleblower complaints filed in the last five years.

    As Holder and Sebelius continue to announce and pursue enforcement efforts, employees who perceive fraud and abuse are more likely to speak up, hire a lawyer, or both. Recovering many millions of dollars is certainly worth a few years of patience to a whistleblower.

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