Whistleblower lawsuit leads pharmaceutical company to pay nearly $234 million

Health Care Fraud

Apr 1

A whistleblower lawsuit has resulted in a major international pharmaceutical company agreeing to pay nearly $234 million to resolve allegations that it avoided paying hundreds of millions of dollars in Medicaid rebates due to significant drug price increases.

The U.S. Department of Justice announced March 7, 2022, that pharmaceutical company Mallinckrodt ARD, LLC has agreed to pay $233,707,865 as part of a settlement to resolve allegations that from 2013 until 2020, it knowingly underpaid Medicaid rebates that resulted from its price increases for the drug H.P. Acthar Gel (Acthar), in violation of the False Claims Act.

In March 2020, the government filed a complaint detailing these allegations and how Mallinckrodt unlawfully required Medicaid programs to foot the bill for an increase in price from $50 per vial to $28,000 per vial, as though a new version of Acthar came on the market in 2013, when in fact, it did not.

The government’s allegations were originally alleged in a September 2018 case filed under the whistleblower, or qui tam, provision of the False Claims Act. The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government has done in this case.

The huge settlement announced by the Justice Department shows the enormous benefit whistleblowers can contribute to preserving the integrity of the U.S. healthcare system, and why potential whistleblowers should contact Ethic Alliance, said Scott Williams, CEO of Ethic Alliance.

“Healthcare and Medicare fraud is estimated to cost US taxpayers between $70 billion and $230 billion every year. The types of fraud are broad and varied; finding the right specialty attorney to work with the Justice Department to bring the case forward is often the difference between success and failure,” said Williams.

Ethic Alliance is a for-profit corporation and law firm whose purpose is to empower, educate and protect whistleblowers, ensuring they receive the protection they need and the rewards they are entitled to under US law (the US government will typically reward whistleblowers 10%-30% of the amount recovered or sanctioned under various whistleblower laws), generating profits for investors while reducing corruption, fraud, theft, lying and cheating in our society.

Ethic Alliance protects whistleblowers through a secure, encrypted reporting and messaging platform, attaching the strong legal protection of attorney-client privilege from the moment a report is filed, and access to a network of specialty attorneys that have made careers protecting and supporting whistleblowers, and working with the US government to win whistleblower lawsuits.

Contact Ethic Alliance at info@ethicalliance.com

Photo by Sam Moqadam on Unsplash