If there was any doubt that the current administration was aggressively pursuing healthcare fraud, it was put to rest with the landmark settlement that the Department of Justice reached with GlaxoSmithKline on Monday.
After an eight year investigation, the government and states got GSK to plead guilty and agree to pay $3 billion to settle allegations of off-label promotions of several brand name drugs,withholding certain safety data, and its civil liability for alleged false price reporting practices, the DOJ said.
“The settlement is pretty remarkable in the sense that it shows how far companies are willing to go to sell their products in this extraordinarily competitive environment and the lengths that the government will go to punish the fraud and abuse on the system,” said David Aafedt, shareholder with Winthrop & Weinstine, a Minneapolis law firm that represents medical device makers, pharma companies and providers.
Aafedt noted how in fiscal year 2011, the government touted its recovery of nearly $4.1 billion from health fraud enforcement actions (the amount includes $2.4 billion recovered from violations of the federal False Claims Act). This year, just taking two settlements — one involving Abbott announced in May in which the company agreed to pay $1.5 billion for off-label promotion and the $4.5 billion GSK settlement — has blown the fiscal 2011 recovery amount out of the water.
“This aggressive fraud and abuse enforcement is going to be one of the legacies of the Obama administration, whether it concludes this upcoming January or in 2017,” Aafedt said. “I think he has set a very high standard against which the future administrations will be gauged.”
And the trend is only expected to continue with last week’s U.S. Supreme Court ruling that upheld the Affordable Care Act. That’s because the lawset aside $350 million to combat fraud, which means new investigators and agents can be hired, Aafedt said. The ACA also encourages better data sharing among federal agencies and at the state level as well as expanded overpayment recovery efforts related to Medicare and Medicaid, among other things.
“So you can expect to see the DOJ and the HHS’s Office of Inspector General to continue to fight these sorts of claims quite vigorously,” Aafedt said.
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