Famous Healthcare Whistleblower Lawsuits

The U.S. government has recovered billions of dollars under the False Claims Act (FCA), thanks to company insiders who are willing to help expose fraud. Whistleblower actions, known as qui tam lawsuits, make up 90% of the fraud cases against the healthcare industry and, when the government steps in and wins, whistleblowers share between 15% and 25% of the recovery.

Big Healthcare Qui Tam Lawsuits

  • HCA (Columbia/HCA) - In March 2011, HCA came to a final settlement following a qui tam case that continued for over 10 years. A December 2000 guilty plea to multiple FCA violations, including doctor kickbacks and cost reporting fraud, cost the company $840 million--the most recent settlement another $631 million--for a total recovery of $1.7 billion.
  • Pfizer - Civil and criminal penalties surrounding illegal marketing practices forced Pfizer into a $2.3 billion settlement in a September 2009 lawsuit. Pfizer was charged with off-label drug marketing by six whistleblowers who shared in a $102 million dollar final settlement.
  • Johnson & Johnson (Lifescan) - In a qui tam case against Johnson & Johnson's Lifescan, for knowingly selling defective blood monitoring devices, whistleblowers earned a $6.3 million dollar settlement. The government's 2001 recovery was $30.3 million.
  • Allergan - For its off-label marketing of Botox for FDA-unapproved uses between 2000 and 2005, Allergan pleaded guilty and paid $375 million in fines in September 2010. Civil claims, in three qui tam lawsuits, took an additional $225 million out of Allergan's profits.

Some of the False Claims Act violators were also required to sign long-term Corporate Integrity Agreements to allow independent, outside watchdogs to oversee their company practices for a period of several years.

Qui Tam 2010 Payouts

In 2010, the Justice Department recovered more than $3 billion in a total of nearly 150 qui tam lawsuits. Taxpayers Against Fraud(TAF) reported that the 10 biggest cases were settlements--amounting to $2.7 billion--related to health care fraud. Eight out of 10 of the lawsuits were filed against pharmaceutical companies. The non-profit organization TAF noted that the government finds whistleblower lawsuits quite cost-effective, retrieving $15 for every dollar it spends investigating and prosecuting the qui tam cases.

Whistleblower Suits for Smaller Governments

States and cities have noticed the federal government's success rate with qui tam lawsuits and have looked to reduce false claims and increase revenues within their own borders. With the passage of the 2005 Deficit Reduction Act, which gave individual states a greater portion of Medicaid fraud recovery funds when prosecution was successful at the state level, 28 states plus the cities of New York and Chicago have now introduced their own versions of the False Claims Act. 

Whistleblowing as a Business

The Los Angeles Times reported in January 2011 that there is a new breed of whistleblower in the health care industry--businesses. A Florida pharmacy called Ven-A-Care makes a side profit by keeping an eye on drug companies who try to overcharge the government. Ven-A-Care made a tidy $168 million in December 2010 for turning in Medicaid and Medicare healthcare fraudsters.