Whistleblower Rewards for Reporting Pharmaceutical Prescription Fraud

​Pharmaceutical Prescription Fraud takes many forms.  The obvious examples include when physicians write prescriptions for drugs that are not medically necessary, when prescriptions are sold, when drugs are dispensed without a valid prescription, and when physicians sign blank prescription forms that are then filled out by a nurse or staff member who is not authorized to prescribe drugs.

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Some of the largest whistleblower rewards, however, have been awarded for coming forward with evidence of much more sophisticated schemes.  These fraudulent schemes are often perpetrated by large pharmaceutical companies, hospitals, and nursing homes that bill Medicare and Medicaid for tens of millions, and often hundreds of millions of dollars.

The two most lucrative categories of pharmaceutical prescription fraud whistleblower rewards are:

• paying kickbacks to induce physicians to write prescriptions for expensive drugs that are then billed to Medicare or Medicaid; and
• engaging in business or financial relationships with physicians that violate the physician self-referral provisions of the Stark Law.

These types of schemes are often difficult to prove because they require insiders to disclose confidential information that cannot be discovered by outsiders.  Once an insider comes forward with evidence, however, these schemes are often easy to prove and result in multi-million-dollar whistleblower rewards.  This is because a claim that is submitted to Medicare or Medicaid in violation of the Anti-Kickback Law or the Stark Law is considered a “false claim,” even if the prescription was otherwise medically necessary and legitimate.
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Keep reading to learn about the different types of pharmaceutical prescription fraud and how ordinary employees have earned millions of dollars in whistleblower rewards by helping the government stop it.

​Paying Kickbacks to Write Prescriptions  

A former Abbott Laboratories employee earned a $1 million whistleblower reward for reporting kickbacks between the pharmaceutical giant and the second largest nursing home consulting pharmacy in the country.  The whistleblower alleged that Abbott Laboratories paid kickbacks that were disguised as rebates, educational grants, and other financial support.  In exchange, the pharmacy allegedly promoted the company’s prescription drug Depakote for nursing home patients.

In another case, a former pharmaceutical sales representative earned a $1.7 million whistleblower reward after Victory Pharma Inc., a specialty pharmaceutical company, agreed to pay $11.4 million to settle claims that it paid kickbacks to doctors to induce them to write prescriptions for Victory’s products including Naprelan, Xodol, Fexmid and Dolgic.  The kickbacks included tickets to sporting events, concerts and plays; spa, golf and ski outings; dinners at expensive restaurants; and numerous other out-of-office events.

The amount of money involved in pharmaceutical kickback cases is extraordinary.  For example, Teva Pharmaceuticals agreed to pay $27.6 million to settle claims that it paid kickbacks to induce a physician to write more prescriptions for generic clozapine, an anti-psychotic medication.  The complaint alleged that the kickbacks were disguised as compensation under a consulting agreement that paid the doctor $50,000 per year and other benefits to induce him to switch his patients to generic clozapine.  After entering into the consulting agreement, the doctor quickly became the largest prescriber of generic clozapine in the United States.

The Anti-Kickback Statute prohibits paying anything of value in return for patient referrals or prescriptions.  The law is designed to ensure that patients are prescribed drugs based solely on their medical needs, not because the doctor or pharmacist is being paid by the pharmaceutical company to prescribe a particular drug.  In addition, the law seeks to prevent claims for reimbursement from Medicare and Medicaid for prescriptions that are not medically necessary.
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It does not matter if the patient actually needed the prescription.  Once a prescription is tainted by a kickback, a claim submitted to Medicare or Medicaid for that prescription is considered a “false claim.”  In other words, the claim is false and fraudulent, even if the prescription was otherwise legitimate and the patient truly needed it.

​Stark Law or Physician Self-Referral Violations

Elin Baklid-Kunz earned a $20.8 million whistleblower reward after Halifax Hospital Medical Center agreed to pay $85 million to settle claims that it violated the physician self-referral provisions of the Stark Law.  The whistleblower alleged that contracts between Halifax and six medical oncologists provided an incentive bonus based on the value of prescription drugs and tests that the oncologists ordered and the hospital then billed to Medicare.

The Stark Law, also known as the physician self-referral law, prohibits a hospital, nursing home, or other facility from billing Medicare or Medicaid for certain services that are referred by physicians with whom they have a financial relationship.  The financial relationship may take the form of an ownership interest in the facility, salaries, benefits, consulting contracts, or office space.
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The Stark Law is designed to ensure that physicians make decisions based solely on their professional judgment and the best interests of the patient, without regard to improper financial incentives.  The law punishes both those who provide the incentives for referrals and those who receive the benefit of those incentives.

Do you have evidence of false claims submitted to Medicare or Medicaid?
You may be entitled to a large financial reward.
Speak to an experienced whistleblower lawyer today.

Call (212) 601-2728

​​“Usual and Customary” Price Violations

​A former Walgreens pharmacy manager earned a multi-million-dollar whistleblower reward after Walgreens agreed to pay $60 million to settle claims that it overcharged Medicaid programs for prescription drugs.  Under federal and state laws, a pharmacy that fills prescriptions for Medicaid beneficiaries may not charge the government more than the drug’s “usual and customary” price.  The whistleblower in this case came forward with evidence that Walgreens charged government programs more for prescription drugs than it charged some customers who were enrolled in the company’s Prescription Savings Club.

​Medically Unnecessary Prescriptions

Two compounding pharmacies and four physicians agreed to pay $10 million to settle allegations of false claims submitted to TRICARE, the military’s healthcare program.  The government alleged that the physicians steered military patients to a compounding pharmacy they owned with hundreds of costly prescriptions for pain and scar creams that were not medically necessary.  Many of the patients told the government that they never used the creams.  The amount of profit involved was extraordinary.  While the pharmacies billed the federal government tens of thousands of dollars for the creams, the actual cost of compounding the creams was only 4-5% of the amount billed to TRICARE.

​Dispensing Drugs Without a Valid Prescription

The government agreed to join a whistleblower lawsuit accusing PharMerica of billing Medicare for controlled substances that were dispensed without a valid prescription.  PharMerica is a pharmacy that dispenses drugs to residents of nursing homes, skilled nursing facilities, and other long-term care facilities.
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Pharmacies are prohibited from dispensing oxycodone, fentanyl, and other Schedule II narcotics without a valid prescription from a physician.  According to the complaint, PharMerica allowed nursing home staff to order narcotics, and allowed pharmacists to dispense narcotics, without confirming that a physician had issued a valid prescription based on medical necessity.

​Selling Prescriptions  

An anesthesiologist admitted selling prescriptions made out in the names of individuals he had never met.  The prescriptions allowed the individuals to obtain more than 16,000 oxycodone pills worth $480,000 on the street.
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Another physician had both a legitimate and illegal practice in his medical offices:  Real patients were charged $110 for an office visit.  Drug users and addicts were charged $250 or more for an office visit that included a prescription for a controlled substance such as oxycodone.  Two patients who cooperated with the government’s investigation were charged $250 by the doctor to receive prescriptions for oxycodone.  The doctor allegedly did not conduct physical examinations of these patients or even question them about their need for the medication.

​Pre-Signing Prescription Forms

A doctor signed a blank prescription form and instructed his staff to copy and use this pre-signed prescription as needed – even when the doctor never saw the patient.  Patients had their prescriptions filled at pharmacies, which then submitted claims to Medicare and Medicaid for reimbursement.  These were considered false claims because Medicare and Medicaid would not have paid the claims if they had known that the doctor never saw the patient.

Another doctor was accused of giving blank, pre-signed prescription forms to a registered nurse, so the nurse could fill out the prescriptions at her discretion for narcotics such as morphine and oxycodone.  These prescriptions were also considered false claims regardless of whether the patient actually needed the medications.

​Doctor Shopping

A patient was charged with Medicaid fraud involving “doctor shopping,” or using her Medicaid benefits to get multiple pain medication prescriptions by visiting different doctors.  The woman’s “doctor shopping” scheme involved visiting multiple doctors to obtain prescriptions for the pain medications Lortab, Oxycodone and Tylenol III.  Each time she would visit a new doctor, she failed to disclose that she had already received prescriptions for the pain medications by visiting other physicians.
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The physician office visits and prescriptions were paid for with Medicaid benefits.  It is against the law to use Medicaid benefits to obtain prescription drugs for any reason other than prescribed, or to use benefits to go from one doctor to another to get duplicate prescriptions.

Find out if you qualify for a whistleblower reward.
Speak with an experienced whistleblower lawyer today.

Call (212) 601-2728