Pharmaceutical Companies Agree To Pay $421.2 Million To Settle False Claims Act Lawsuits Alleging Medicare And Medicaid Fraud

On December 7, 2010, the U.S. Department of Justice announced that it has reached a settlement agreement with the pharmaceutical companies Abbott Laboratories Inc., B. Braun Medical Inc., and Roxane Laboratories Inc. to resolve lawsuits filed against the companies asserting that they violated the False Claims Act by causing false claims to be submitted to federal healthcare programs such as Medicare and Medicaid.  More specifically, the lawsuits alleged that the companies reported inflated prices for numerous pharmaceutical products knowing that federal healthcare programs relied on those prices to establish rates at which the Government would reimburse healthcare providers.  As a result, the Government ended up paying substantially more for the pharmaceuticals than it would have had the defendants reported the prices truthfully.

Some of the lawsuits were filed by qui tam whistleblowers on behalf of the Government.  The whistleblowers will receive an approximately $88.4 million share of the overall settlement as a reward for disclosing the fraud to the Government.

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