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Glenmark Pharmaceuticals Agrees to Pay $55 Million False Claims Act Settlement to Resolve Price-Fixing Allegations
Glenmark Pharmaceuticals Inc, USA, a generic pharmaceutical manufacturer based in Mahwah, New Jersey, has agreed to settle for $25 million to resolve allegations that it conspired with other pharmaceutical manufacturers to fix the price of the cholesterol medication Pravastatin. In addition to the civil settlement, the pharmaceutical company has also agreed to divest its product lines for Pravastatin in accordance with the deferred prosecution agreement made in August (1). This $25 million civil false claims act settlement is in addition to the $30 million it previously paid for the criminal consequences of the conduct aggregating the total settlement for this alleged anti-trust price fixing behavior to $55 million.
The settlement resolves a civil lawsuit filed under the False Claims Act alleging that the pharmaceutical company received and paid compensation through arrangements on the drug’s price, supply, and distribution with other pharmaceutical manufacturers through 2013 to 2015. These actions are allegedly a direct violation of the Anti-Kickback Statute (2); a federal law that prohibits the offering, paying, soliciting, or receiving anything of value to induce or reward referrals or induce business on a given product or service that is covered by federal health care programs. For instance, just last year both Glenmark and Teva, another generic pharmaceutical maker, admitted to engaging in illegal price-fixing of their medications (3).
Anti-Kickback Statute & Combating Healthcare Fraud
Due to the sheer volume of medical claims continuously being submitted throughout the United States, Medicare and Medicaid programs lack the necessary flexibility to review every claim before their respective submissions. As a result, these government entities place a significant amount of trust in healthcare providers and medical experts to provide accurate descriptions. This trust, however, can be exploited if healthcare professionals abuse their discretion and commit one or more forms of Medicare/Medicaid fraud (4).
The Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), and its provisions are applicable to any medical professionals who have the position to arrange or provide medical services. For instance, similarly to what occurred in Glenmark’s case, a pharmaceutical company would be found in violation of the AKS statute if they offer physicians incentives—whether through payments or gifts—to ensure that said physician prescribes its medications to their patients. Alongside kickbacks, other types of fraud such as upcoding, unbundling, and billing for non-existent or unnecessary services are all prohibited under the False Claims Act and may implicate the Anti-Kickback Statute (5). Even more so, the government depends on insiders to blow the whistle on these schemes and you can’t do so without a whistleblower attorney, so if you’re aware of kickbacks, antitrust or other anti-competitive behavior you should speak with a False Claims Act law firm to learn your rights. The best whistleblower law firms often have former DOJ attorneys as the DOJ administers the False Claims Act investigations on behalf of the federal government.
The Glenmark case exemplifies the government’s commitment to combat healthcare fraud and illustrates the need for individuals within the healthcare sector to report suspicious activity to a whistleblower attorney or an Anti-Kickback Statute law firm. This settlement should also serve as a warning to all healthcare entities of the penalties and scrutiny they will be subjected to if they engage in kickbacks. Ultimately, both Medicare and Medicaid rely on accurate financial statistics and pricing information to reimburse healthcare providers. Therefore, when a company artificially inflates prices, it directly results in the government overpaying for medication and, subsequently, the taxpayer being defrauded. Furthermore, these kickbacks, just like any other fraud, are problematic since they undermine the integrity of the healthcare system while also putting the health and safety of patients at risk.
Whistleblower’s Role in Reporting Fraud
The False Claims Act empowers whistleblowers to file lawsuits—also known as qui tam lawsuits—on behalf of the government. Whistleblowers who come forward with novel insider information regarding fraud may be entitled to a percentage of the recovered funds as a whistleblower award should there be a civil settlement or enforcement action. Therefore, there is a strong financial incentive for those who report fraud. The whistleblower in this case is entitled to up to 30 percent of what the government recovers, meaning there may be a False Claims Act whistleblower award in the $6 million range (6). Consulting with an experienced and knowledgeable False Claims Act lawyer can guide you through the legal process, ensuring your claim is properly handled.
Moreover, the law protects whistleblowers from retaliation, offering them some ease in the complex world of whistleblowers. This protection ensures that more people will feel confident and comfortable enough to come forward and report unethical or illicit practices without being fired or retaliated against (7). Therefore, an experienced Anti-Kickback Statute law firm can help you navigate inevitable legal challenges as they arise and help protect your rights.
If you have knowledge of potential Medicare or Medicaid fraud in the healthcare industry, including but not limited to antitrust or price fixing behavior, we encourage you to reach out to a False Claims Act lawyer as soon as possible. Your courage in speaking out can help protect patients and ensure accountability in the healthcare industry. Do not hesitate in taking the first step towards fighting for your rights.
DOJ Report on False Claims Act Settlement
Brown LLC Article on Anti-Kickback Statute
DOJ Article on TEVA and Glenmark Settlement in 2023
Brown LLC Article on Medicare & Medicaid Fraud
Whistleblower Law Collaborative Article on AKS