The United States Department of Justice says that pharmaceutical giant AmerisourceBergen (and many subsidiaries) has agreed to settle a civil whistleblower lawsuit for a staggering $625 million. A separate related criminal case was resolved last year – the company agreed to pay $260 million in that case.
The government says in the claim that the drug company sought to pad its bottom line through several practices that unlawfully increased its profits through reimbursements from many government programs. The allegations involved a variety of cancer medications.
‘Overfill’ at the core of the claim
The lawsuit alleged that the drug company harvested “overfill” from vials of cancer drugs and repackaged the medication in syringes that it sold to health care providers. In essence, the practice created the unlawful opportunity for the drug company to create more doses of the drugs than it paid for, according to the DOJ. Moreover, because the drug company purchased the and repackaged their contents into multiple syringes to be sold, the company billed the government for the same vial on multiple occasions.
In addition to repackaging to boost profits, the government says that the drug company used an unsafe environment to package the medications and gave unlawful kickbacks to physicians. Repackaging was allegedly conducted at a facility that was not sterile. The kickbacks are used to promote sales of the prepackaged syringes.
While the criminal case was resolved last year through a plea agreement, the company did not admit additional fault in the civil settlement. Any additional allegations involved in the civil lawsuit were resolved as excepted from the criminal admissions obtained last year and therefore the allegations of the civil settlement do not include admissions of liability.
Whistleblower expected to receive more than $93M
The civil lawsuit was initiated under the Qui Tam provision of the False Claims Act. Whistleblowers– meaning private individuals with knowledge or evidence of fraud in a government contract – are able to file a claim on behalf of the government to recover taxpayer money. The Department of Justice may intervene – meaning join in the investigation and prosecution of the civil claim. If the lawsuit results in any recovery through settlement or verdict, the whistleblower is entitled to receive a percentage (generally between 15 and 25 percent) of the civil recovery. Here, the whistleblower is expected to receive a little more than $93 million.