In a press release on January 14, the U.S. Department of Justice released its False Claims Act Statistics for Fiscal Year 2020. In total, the federal government recovered over $2.2 billion in settlements and judgments from False Claims Act cases brought against companies and individuals. Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division highlighted the Department’s continued efforts to combat fraud against the U.S. government despite the difficulties presented by the COVID-19 pandemic. As in previous years, health care fraud was the leading source of False Claims Act recoveries, totaling more than $1.8 billion of the $2.2 billion total. The driving force behind these recoveries continues to be qui tam suits brought by whistleblowers on behalf of the government. In FY 2020, the government recovered $1.6 billion from defendants in investigations stemming from qui tam suits filed by relators, resulting in $309 million paid out to individual relators.
The Department’s press release highlighted a number of high value settlements reached in 2020. By far, the largest settlement was with Novartis Pharmaceuticals Corporation, which paid over $591 million to resolve claims of a kickback scheme designed to increase prescriptions written for its drugs by physicians. In another settlement, Novartis and Gilead Sciences paid over $148 million to resolve claims that they illegally paid patients’ copays for their drugs. In the ongoing effort to combat the opioid crisis, the government entered into a $145 million settlement with electronic health records company Practice Fusion, Inc. to resolve claims of an alleged kickback scheme with Purdue Pharma designed to increase prescriptions for OxyContin. The Department made note of its continued efforts to hold individuals accountable for their role in defrauding the government. Notably, the government reached a $4.25 million settlement with individual physicians in Pennsylvania and a $3.25 million settlement with individual physicians in Massachusetts, highlighting the potential legal exposure to physicians and physician groups from False Claims Act suits.
2020 marks a downward trend of False Claims Act recoveries during President Trump’s four years in office from a total of $3.4 billion in FY 2017 to the $2.2 billion in FY 2020. Undoubtedly, the COVID-19 pandemic will have had an impact on the False Claims Act recoveries realized by the government in 2020. In its press release, the Department noted two massive pending False Claims Act recoveries that were not included in the statistics for FY 2020, as the settlements were reached after the end of the fiscal year on September 30, 2020. These two settlements alone represent $3.3 billion recovered under the False Claims Act. In October, the government reached a resolution with Purdue Pharma over its alleged unlawful promotion and inducement of OxyContin prescriptions, obtaining a $2.8 billion unsecured bankruptcy claim. Individual members of the Sackler family, the owners of Purdue Pharma, agreed to pay $225 million for their conduct in efforts to market OxyContin. In another settlement, Indivior agreed to pay $300 million to resolve claims that it unlawfully promote its opioid addiction treatment drug, Suboxone. FY 2021 will dwarf FY 2020 with its total recoveries from False Claims Act litigation. As the Biden administration implements new policies and priorities at the Department of Justice, expect to see an increased emphasis on white-collar crime and consequences for individual defendants. The expected recoveries for FY 2021 are likely to serve as a springboard for the Department of Justice under President Biden to increase enforcement actions against companies and individuals under the False Claims Act.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and qui tam litigation. If you need assistance with such a matter, please contact us today.