Healthcare and Pharma Cases

When Carrie Barrett rushed to the ER at Methodist University Hospital in Memphis, she needed an emergency heart catheterization. The procedure required a two-night stay at the hospital. That was in 2007. In 2010, the hospital sued her for not having paid her share of the medical services it provided: $12,109, close to what Barrett makes in a year.

The woman did not remember receiving any notices to pay before she was notified of the hospital’s lawsuit. Methodist Le Bonheur, the hospital system affiliated with the United Methodist Church, which is supposed to be a nonprofit, was not only seeking payment of the $12,109, but also attorney’s fees, court costs, and added interest.

Today, Barrett’s debt amounts to $33,000. Over the years, the hospital has managed to garnish money from her meager paychecks on 15 occasions. ...

According to a recently resolved False Claims Act complaint, Orland Park-based Quality Therapy and Consultation Inc. (now defunct), and its owner, Frances Parise, systematically billed federal health care programs for services that were never rendered. The alleged misconduct took place as part of Quality Therapy’s work with various nursing homes in the state of Illinois.

The nursing homes mentioned in the whistleblower lawsuit have all agreed to a settlement. Under its terms, Lakeshore Healthcare will pay $2.7 million, Balmoral Home will pay $1.7 million, Ridgeview Rehab will pay $1 million, and Carlton at the Lake will pay the largest settlement: $3.6 million.

The alleged fraud was brought to the government’s attention in 2014, when Katherine Verhulst, a former occupational therapist with Quality Therapy, filed a qui tam lawsuit presenting evidence of her employer’s unlawful practices. As a False Claims Act whistleblower with original information about fraud, Verhulst will receive a $1.9 million award....

A whistleblower in Brazil has just received a $4.5 million award for his role in uncovering a kickback scheme allegedly run by a subsidiary of Zimmer Biomet Holdings Inc. (Zimmer Biomet), a medical device manufacturer. The tipster is a former orthopedic surgeon who became aware of the alleged misconduct while practicing medicine in his home country.

Based in Indiana, Biomet markets its orthopedic and dental implant devices on a global scale. The whistleblower, on the other hand, is a prominent surgeon in South America and former president of Brazil’s Orthopedic Sports Medicine Society. As it is customary with SEC whistleblowers, his name has not been made public.

In 2013, the whistleblower reported the alleged misconduct anonymously to Biomet executives. Within 120 days, he reported it to the SEC. According to his reports, the company was still running a kickback scheme in Brazil, in spite of having faced SEC penalties in the past for the same type of misconduct. ...

The recent $2 billion jury verdict against Monsanto may be a clear indication that Bayer will likely settle the remaining 13,000 cases claiming the active ingredient in Roundup, glyphosate, causes aggressive blood and bone cancer.

Attorney Brian Mahany is convinced that numerous settlements will follow and has good evidence to back up his claim. An active participant in the recent spate of Roundup cancer lawsuits, he is well placed to interpret the verdict.

Global Monsanto/Bayer Settlement in The Works

According to Mahany, the court quietly postponed the bellwether trial scheduled to begin on May 20th. Instead, the court noted an upcoming “confidential mediation.” ...

In the face of skyrocketing drug prices, the federal government has opted to intervene in a whistleblower lawsuit against Mallinckrodt Pharmaceuticals - whose drug price increases are among the largest in U.S. history.

For years, healthcare providers have criticized the price of Mallinckrodt’s H.P. Acthar Gel (Acthar), a drug used to treat symptoms of multiple sclerosis, lupus, rheumatoid arthritis, and seizures in infants. In August 2007, the price of Acthar jumped from $1,600 to $23,000 per vial.

Cost per vial of the drug has increased from $40 to nearly $39,000 in just 19 years - nearly a 97,000% price increase. Currently, annual Acthar sales exceed $1 billion.

But how does a drug company compete in the pharmaceutical world with prices at $39,000 per vial? According to two Mallinckrodt whistleblowers, by breaking the law....

Gary D. Newsome, the former CEO of Florida-headquartered hospital chain Health Management Associates LLC, has agreed to pay $3.46 million to resolve allegations about his role in a large-scale fraud scheme that cost Medicare millions of dollars.

According to the whistleblower lawsuit resolved by the settlement, Newsome conspired to increase the number of admissions of Medicare beneficiaries into Health Management-controlled hospitals. The physicians also received illegal bonuses in exchange for admissions.

The hospital admissions mentioned in the lawsuit were medically unnecessary, as the patients did not require a hospital stay to be efficiently treated. The scheme was allegedly designed to increase Medicare billings....

Kentucky-based US WorldMeds LLC will pay $17.5 million to resolve allegations that it offered kickbacks to both doctors and patients to secure prescriptions of its drugs Apokyn and Myobloc, used to treat Parkinson’s disease. The prescriptions generated millions of dollars for the company in the shape of Medicare billings.

The multi-million-dollar settlement resolves a whistleblower lawsuit filed by two former employees of US WorldMeds, Dr. Bennett and Dr. Chinnapongse. Under the False Claims Act, the two relators stand to receive a shared award amounting to 15-25 percent of the total recoveries.

The whistleblowers quit their jobs immediately after the resolution of the lawsuit became public. According to a spokesperson for Dr. Chinnapongse, he is not only “a brilliant scientist,” but also “a deeply ethical doctor who stood up at great risk to do the right thing,” and, “precisely the kind of whistleblower that the False Claims Act is meant to reach.”...

Astellas, a pharmaceutical company, has just agreed to pay $100 million to resolve allegations that it illegally used charitable foundations to cover Medicare copays to boost sales of its drug Xtandi.

Because patients covered by Medicare are often required to make partial payments for prescription drugs, many foundations subsidize them. When pharmaceutical companies donate to those foundations, the practice may violate the Anti-Kickback Statute, which forbids drugmakers from incentivizing the purchase of their products.

Astellas is the maker of Xtandi, a drug used to treat prostate cancer. According to the government’s findings, Astellas directly asked two foundations to start two funds to assist prostate cancer patients with their copay obligations. The funds then began exclusively subsidizing the purchase of Xtandi by Medicare-covered patients. Meanwhile, Astellas was the only donor to the funds....