Pharmaceutical Company Mylan Settles False Claims Act Whistleblower Lawsuit for $465 Million

In one of the largest qui tam False Claims Act (“FCA”) settlements of 2017, pharmaceutical company Mylan Inc. entered into a $465 million dollar settlement.  Our Los Angeles based qui tam FCA whistleblower attorneys reported that the allegations stemmed from allegations that Mylan violated the FCA by misclassifying its EpiPen product as a generic drug.  This, allegedly, was part of a scheme to avoid having to pay rebates to the federal government’s Medicaid program.  In so doing, Mylan joins a long list of companies that are alleged to defraud the federal government by profiting from programs aimed at helping those in need and using taxpayer dollars.

Around 40 million individuals in the United States are dependent on Medicaid. Any entity or person that has knowledge or belief that a FCA or fraud is occurring is encouraged to report it to the government and our attorneys are here to help.  Therefore, over the last several decades, we are glad to see so many individuals report fraud against the government.   In this case, another pharmaceutical company Sanofi-Aventis, brought the qui tam whistleblower law suit on behalf of the government.  As such, the government decided to intervene through its prosecutors in the Department of Justice (“DOJ”).  They were assisted by several state attorney generals and other government agencies.  Eventually, they found that Mylan increased the prices of EpiPen by 400 percent from 2010 to 2016 and paid lower rebates to Medicaid than it would have if it classified EpiPen as not generic.

Under the FCA, the Judge is entitled to order the defendant to pay triple the actual damages that the jury finds.  In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant.  As result, the whistleblower will receive approximately 15 to 25 percent of the total FCA recovery plus attorney’s fees.

As the main enforcement arm of the federal government, the DOJ reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will prosecute or allow the whistleblower to bring the complaint on the government’s behalf.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.