How the False Claims Act Can Hurt Physicians

November 12, 2015

A recent ruling against a pharmaceutical company shows physicians how the False Claims Act can hurt them legally and financially.

The Department of Justice’s (DOJ) recent indictment of Warner Chilcott, a pharmaceutical company, for paying kickbacks serves as a reminder for physicians to be weary of the False Claims Act.

The False Claims Act (“FCA”), which dates back to 1863, enables either whistleblowers or the government to bring court actions under seal (out of public purview) against persons in pursuit of civil and/or criminal penalties. It is considered “stealth” because the case is filed under seal, making its contents and evidence initially unknown to the public and to defendants. In some instances, the government may pursue a civil case, criminal case, or both. The government has the option of declining to enter a civil case, which is often brought by an insider, who is an original source of the information and is subsequently bringing a criminal case or intervening in both cases. The end result for the guilty can be costly in terms of legal defense, fines, and reputation.

Warner Chilcott and several individuals are in serious trouble. “Warner Chilcott agreed to plead guilty in the District of Massachusetts to criminal charges that the company committed a felony violation by paying kickbacks to physicians throughout the United States to induce them to prescribe its drugs, manipulating prior authorizations to induce insurance companies to pay for prescriptions of Atelvia that the insurers may not have otherwise paid for and making unsubstantiated marketing claims for the drug Actonel.” This should raise several flags for physicians, because as has been shown in the past, they can be held criminally liable and pay large sums of money for engaging in these practices.

The Department of Justice press release has several takeaways for physicians:

• It is illegal to offer or pay remuneration to physicians to induce them prescribe drugs or utilize medical devices;

• The government looks at “substance over form” so make sure that outings and dinners dubbed as educational events actually contain an education component;

• If you are a speaker for a company, make sure that you actually discuss the clinical aspects that are FDA approved and are not given that title for your prescribing habits alone; and

• Review what you are asked to sign in terms of pre-authorization requests.

In sum, physicians should remain vigilant about their habits and stay abreast of the false claims act violations, especially in relation to the Stark and anti-kickback laws. Not only will the physician remain compliant with his or her ethical obligations and professional responsibilities, the risk of a lawsuit or government action is greatly diminished.