In the past few years there have been significant qui tam settlements brought by whistleblowers seeking to report pharmacy fraud. These whistleblowers held positions such as: pharmacists, assistants, and some were competitors. Examples of qui tam cases that have been brought by whistleblowers to report pharmacy fraud can include cases involving kickbacks, providing medically necessary drugs, or violations of regulations. Moreover, if state Medicaid money is part of the pharmacy fraud, a qui tam can also be brought under State False Claims Acts.
Qui Tam Settlement Against an Institutional Pharmacy
Both retail and institutional pharmacies have engaged in pharmacy fraud. For example, PharMerica Corporation, is an institutional pharmacy. Pharmerica settled a False Claims Act when a whistleblower decided to report pharmacy fraud. The whistleblower case alleged that PharMerica fraudulently billed Medicare for Schedule II controlled drugs it distributed without a valid prescription. In other words, because PharMerica distribute drugs illegally, and billed those drugs to the government, the bills were considered false claims. This case settled in 2015 for $31.5 million. The False Claims Act was a powerful took for the whistleblower to report fraud against the government.
Pharmacy Fraud Against A Compounding Pharmacy
In addition to retail and institutional pharmacies, there are also “compounding pharmacies” that can commit pharmacy fraud. For example, a whistleblower filed a qui tam case alleging that six Florida-based compounding pharmacies:
- provided illegal kickbacks to marketers,
- filled prescriptions that it knew or should have known were illegitimate, and
- mailed prescriptions to states in which it had no license.
This qui tam case that sought to report pharmacy fraud settled in 2015 for $30 million.
Report Pharmacy Fraud Committed Against Private Insurance Companies
If an individual is seeking to report pharmacy fraud by filing a qui tam case related to Medicare/Medicaid, then the whistleblower’s lawyer should also investigate if private insurance companies were defrauded by the same conduct. in sum, ff private insurance companies are also defrauded, the whistleblower might have a case under the California Insurance Fraud Prevention Act or CIFPA. Examples of cases brought under the CIFPA to report pharmacy fraud can be instructive.
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