So Many Whistleblowers, So Little Time
2 CommentsBy Ed Silverman // July 3rd, 2008 // 8:14 am
More than 900 cases alleging that government contractors and drugmakers have defrauded taxpayers out of billions of dollars are languishing in a backlog that has built up over the past decade because the Justice Department cannot keep pace with the surge in charges brought by whistleblowers, The Washington Post reports.
The issue is drawing renewed interest among lawmakers and nonprofit groups because many of the cases involve the wars in Iraq and Afghanistan, rising health care payouts, and privatization of government functions - all of which offer rich new opportunities to swindle taxpayers, the Post writes.
Since 2001, 300 to 400 civil cases have been filed each year by employees charging their companies defrauded the government. But under the cumbersome process that governs these cases, Justice Department lawyers must review them under seal, and whistleblowers routinely wait 14 months or longer just to learn whether the department will get involved. The government rejects about three-quarters of the cases it receives, saying that the vast majority have little merit.
Disputes can stay buried for years while allegations are investigated. “Even if no new cases are filed, it might take 10 years for the Department of Justice to clear its desk. Cases in the backlog represent a lot of money being left on the table,” Patrick Burns of Taxpayers Against Fraud, which is backed by law firms and advocates for more government funding to pursue cases, tells the paper.
In recent years, verdicts and settlements have returned nearly $13 billion to the US government, the Post writes. Among the largest such cases to date is a $650 million settlement earlier this year with Merck over Medicaid rebates, and a $515 million deal with Bristol-Myers Squibb to cover illegal drug pricing and marketing.
By its own account, the 75-lawyer unit in Washington that reviews the sensitive lawsuits is overloaded and understaffed. Only about 100 cases a year are investigated by the team, which works out of the commercial litigation branch of Justice’s civil division.
Hat tip to Pharmagossip
Dan
In my opinion, delays with such cases, combined with inappropriate staffing of prosecutors, is by deliberate design perhaps by the administration:
Crime and Punishment: Enough for Corporate Wrongdoing?
Corporate crime should not be a new concept to most people- especially with scandals revealed with large corporations at the beginning of this decade. However, it may have evolved into more troubling ways- not only in regards to its severity, but the methods of deterrence now being implemented against corporations- involved in the health care industry in particular. So it may be becoming progressively worse for U.S. citizens as a result.
Rather than speak of all corporations, what will be discussed is government health care fraud. Fraud basically is deception with the potential to harm others. In the case of pharma companies, this may include improper promotion and marketing, meaning that such tactics are or may be deceptive misconduct that may be illegal. In addition, there are the crimes of kickbacks and lesser crimes of misbranding products. Probably more methods of wrongdoing as well do in fact exist and happen. Yet the point is that drug companies should not engage in such wrongdoing to enrich their faceless existence with profiting off those who are ill in illegal ways.
Biggest fines so far of all time was for these companies- all involved in the health care system:
Hospitals were NME in 1994 and HCA healthcare for billing the government for work never done, among other things (This HCA hospital system is owned by Senator Bill Frist’s family, and somehow I’m not shocked in any way). HCA was fined twice in 2000 and 2003.
Tap in 2001, Serono in 2005, Pfizer in 2004, Abbott in 2003, and GSK in 1997, Schering in 2004 and 2007, AstraZeneca in 2003, as well as Bayer this year- all for fraud against our government. There are many more settlements aside from these with other aspects of healthcare unrelated to pharmaceuticals, such as hospitals and home health care companies, but these top the list from the aspect of monetary penalty.
Kidney dialysis clinic Fresenius paid a settlement in 2000 for faking medical claims was a big one in recent times. The irony is that dialysis never wanted a patent for the inventor, as he wanted the treatment to be utilized by all who were in need of this treatment.
Check out: http://www.taf.org for more information and companies busted for this type of behavior. And check out http://www.corporatecrimereporter.com to find out the criminals who are essentially set free afterwards.
Criminals assigned to restore the health of others. This is troubling to say the least.
How is such conduct discovered? Typically by whistleblowers who worked for the described pharma or medical company, and such people are rare for a number of reasons. The whistleblower then seeks legal agents and files what is called a qui tam false claims act with a district attorney’s office (Boston or Philadelphia, if you want prosecutors to take you seriously). After the case is filed, the whistleblower verbally acknowledges the charges and evidence to the chosen prosecutors and others.
Such cases usually take years for unclear reasons to reach closure, yet in the past two years, the settlements from such cases has approached 2 billion dollars after investigations ended that took years, which is tax dollars returned to the American public with these settlements.
So, what has been happening once a pharma company gets busted. Criminal indictment by the government prosecutors? This is hardly the case, yet appropriate. Usually, the prosecutor’s objective is to dismiss the case, but give the impression that such activities will not be tolerated by our government. So Corporate Integrity Agreements are mandated to the pharma company, but not really taken seriously, as some have more than one of these agreements active still. It’s an invisible ankle bracelet. A pharma company can and have committed equal or worse crimes while under such an agreement. This Agreement is issued after the deferred or non prosecution agreement is sentenced to the law-breaking corporation, which basically is a pre-trial diversion. Essentially, it’s just parole, which is supported by the DOJ and the administration. The criminals admit wrongdoing, but not guilt. And they pay a settlement in the neighborhood of hundreds of millions of dollars. Not that shocking, if you consider the income of big pharma companies. These agreements are relatively new and partially a result of suggestions somehow devised by the lawmakers of our country.
We are the top country in the world with the most prisoners behind bars, yet those that do similar if not greater harm to others get out of jail free. Double standard, I would say. Is this behavior by our legal system towards corporations an effective deterrent? Most think not. It rather seems like tacit approval of their conduct. And health care fraud may be more damaging than other types in other industries, yet lack of regulation allows such crimes to continue.
Citizens should make the laws in our country. Justice would then finally exist.
“Corporations cannot commit treason, nor be outlawed, nor excommunicated, for they have no souls.”
—- Edward Coke
Dan Abshear
Author’s note: What has been written above is based upon information and belief
Justice in MI
Dan - Respectfully, and as another long-winded guy, I’d ask that whole essays not be dropped into threads if there is a link available. I don’t know if that’s so in this instance, but a general requrest that’s been made before.
Based on the report, it sounds like the government is saying at least one-quarter of these cases, now about 100 per year, have signficiant merit. I’m wondering the the office reviewing them has itself grown (or shrunk?) in recent years.