CNN has reported that the federal government, following an investigation, has intervened in a False Claims Act filed by two whistleblowers, represented by the law firm Begelman & Orlow. The whistleblowers had filed a qui tam claim under the False Claims Act, alleging that their employer, Mallinckrodt ARD, LLC (previously known as Questcor Pharmaceuticals Inc.), engaged in fraudulent and illegal acts to boost sales of H.P. Acthar Gel, a drug primarily used to treat infant seizure disorders, along with conditions like rheumatoid arthritis and multiple sclerosis.
Questcor Had Significantly Increased Prices of H.P. Acthar
Prior to its merger with Mallinckrodt, Questcor had significantly increased the price of H.P. Acthar. CNN reports that the price of a vial of the drug had increased from $40 in 2000 to $39,000 today, an increase of approximately 97,000%. The government’s complaint, part of its intervention into the whistleblowers’ case, alleged that Questcor and later Mallinckrodt used a foundation as part of its scheme to boost sales of H.P. Acthar while also astronomically raising the drug’s price.
Allegations of Bribery and Illegal Kickbacks
The whistleblowers’ original complaint, filed by Begelman & Orlow, alleged a corporate culture at Questcor that was designed to sell the company’s drugs at all costs, including making false statements to the Food and Drug Administration regarding the company’s advertising, promotional, and marketing efforts, and providing physicians with bribes and kickbacks.
For its part, Mallinckrodt has not denied the government’s allegations but claims that it was unaware of Questcor’s conduct when it acquired the company and asserts that any illegal conduct occurred prior to the companies’ merger. However, the whistleblowers’ complaint alleged that one of the two qui tam plaintiffs remained with the company following the merger.
Violation of the False Claims Act
The government’s complaint alleges that Questcor/Mallinckrodt used a foundation to pay illegal kickbacks in the form of copay subsidies for Acthar. The government alleges that the company was the sole donor to this foundation. This allowed the pharmaceutical company to market Acthar as “free” to physicians and patients while allowing the company to drastically increase the price of the drug. The government alleges that this foundation only paid for Acthar copays to the exclusion of other drugs.
The violation of the False Claims Act occurs because many of Acthar’s users were Medicare and Medicaid patients, whose drug costs are reimbursed by the federal government. The government argues that the pharmaceutical company’s use of the foundation to cover patient copays allowed the company to negate physician and patient concerns about the exorbitant costs of Acthar, since the drug would be effectively “free” to the patient with the federal government picking up the tab for the drug’s high costs.
How Begelman & Orlow Can Help Employees with Whistleblower Claims
The whistleblowers in this case, represented by Begelman & Orlow, were two former employers of Questcor/Mallinckrodt who filed complaints pursuant to the False Claims Act, which allows private citizens to file what are known as qui tam lawsuits on behalf of the federal government for false claims made to federal programs such as Medicare/Medicaid. If a qui tam False Claim Act lawsuit is successful at trial, the plaintiff is entitled to receive a share of the recovery ordered by the court.
If you are an employee or other individual with evidence that a company is engaging in making fraudulent claims to federal government programs, you may be entitled to file a lawsuit on behalf of the government under the False Claim Act. The act provides you with a share of any recovery along with protections for your whistleblower status. Filing a qui tam suit under the False Claims Act can be a difficult, time-consuming process. The attorneys of Begelman & Orlow can help you, as they have helped the plaintiffs in the Questcor/Mallinckrodt case, to pursue a qui tam action and guide you through the process, especially if the federal government exercises its rights to intervene and prosecute the case.
Contact a Cherry Hill False Claims Act Lawyer to Discuss Your Qui Tam Claims in New Jersey
Are you an employee who has evidence of fraud and price-fixing by pharmaceutical companies in New Jersey?. Right now, you need an aggressive False Claims Act attorney on your side, fighting to help you shed light on your employer’s fraudulent and illegal acts. The skilled attorneys at Begelman & Orlow represent clients pursuing qui tam claims in Camden, Winslow, Pennsauken, Voorhees, and throughout New Jersey. Call (856) 547-7400 or fill out our online contact form to schedule a consultation about your case. We have an office conveniently located at 40 Rte. 70 E. Cherry Hill, NJ 08034, as well as offices in Conshohocken, PA.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.