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$300 million settlement in Forest Whistleblower case
- Thursday, 14 October 2010 20:05
- Last Updated on Wednesday, 05 September 2012 06:25
- Kevin Gill
- Hits: 686
A lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act against Forest Laboratories, Inc., and its subsidiary Forest Pharmaceuticals, Inc. Two courageous whistleblowers represented by the national whistleblower law firm of Nolan & Auerbach, P.A. won the suit resulting in a settlement of over $300 million. The case stems from the illegal sale of Levothroid. All Medicaid reimbursed drugs must meet “Covered Outpatient Drugs” statute that requires full FDA approval for safety and effectiveness. The suit claimed that Forest did not ever meet the COD statute.
According to the whistleblowers, Forest sold the drug from 2001 through 2005 all the while falsifying quarterly certifications to the Center for Medicare and Medicaid Services (CMS). It was during this period that the FDA announced that all oral Levothyroxine Sodium products, including Levothroid, needed to obtain proper approval. The whistleblowers further allege that Forest nearly doubled it’s illegal sales of the Levothroid after the FDA mandated phase down. Marcella Auerbach, a legal representative for the governments case stated "When pharmaceutical companies falsify information about their drug to Medicaid, they siphon our limited healthcare dollars away from proven medicines. These business practices cause federal and state government health care programs to pay millions of dollars for prescriptions that are not eligible for payment.”
Other False Claims Act allegations involved in the case have been settled as well. These false claims are in regards to Forest products besides Levothroid, namely Celexa and Lexapro. While Levothroid was an unapproved drug used to treat hyperthyroidism, Celexa and Lexapro are anti-depressants that during the time period in question were only approved for use in adults. Forest promoted these anti-depressants for unapproved pediatric use. Further criminal actions include kick backs from Forest to physicians to induce prescribing these drugs that included cash payments in the form of so called consulting fees and grants as well as meals and lavish entertainment.
Along with the civil disputes criminal charges have been settled as well. Forest plead guilty to one criminal misdemeanor count of distributing an unapproved drug in interstate commerce, one criminal felony count of obstructing justice, and one criminal misdemeanor count of distributing a misbranded drug in interstate commerce. $150 million of the settlement sum is criminal fines while the rest of the $313 million is in civil penalties.
Under the False Claims Act whistleblowers can receive as much as 15% to 30% of the government settlement in order to offset the loss of jobs and other difficulties that can be incurred by showing the courage to stand up to a criminal employer.