BioVail Pharmaceuticals will also pay more than $2.4 million to the United States to resolve allegations that this conduct caused false claims to be submitted to the United States, according to a September 14, 2009 press release by the Massachusetts Department of Justice.

For the full press release, go to: http://www.usdoj.gov/usao/ma/Press%20Office%20-%20Press%20Release%20Files/Sept2009/BiovailPlea.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA .

The government agency issued warnings to Ranbaxy late last year for more than 30 of the pharma giant’s generic drugs, produced at two plants in India. According to Inside Washington Publishers’ October 10, 2008 FDA Week, FDA sued Ranbaxy last summer, stating that the company was likely selling adulterated drugs in the U.S.

But FDA may have dropped the ball–some say, knowingly. FDA Week reports that FDA did not begin blocking Ranbaxy imports until September, even though the agency knew about the problems as early as 2005.

The Department of Justice is investigating claims that Ranbaxy produced HIV medication that contained insufficient active ingredients or was adulterated with other ingredients.

To read more click here.

In response to questions from Sen. Charles Grassley (R-IA) on his nomination to be permanent deputy attorney general, McNulty writes that the Justice Department has joined over 150 drug-pricing whistleblower, or qui tam, cases. Dozens of attorneys have been assigned to the cases, most of which are still under investigation. Also, the department is developing databases accessible by government personnel working on the cases.

“Indeed, the Civil Division has hosted two conferences (and is currently planning a third conference) for its attorneys, assistant United States attorneys from around the country, FDA personnel, state representatives and HHS attorneys and investigators to coordinate and move these cases along,” McNulty writes.

Of the $1.4 billion recovered in fiscal year 2005 from False Claims Act settlements and judgments, health care fraud accounted for $1.1 billion, according to the Justice Department.HHS reaped the biggest recoveries, which was largely attributed to its Medicare and Medicaid Programs. The Justice Department has recovered $500 million so far in this fiscal year.

Companies have been settling suits out of court for hundreds of millions of dollars because losing a criminal case against the government would mean being excluded from participating in Medicare. Industry lawyers say federal prosecutors are targeting drug companies primarily because they have lots of money.

Medicare is expensive and most of the money recovered from going after drug companies goes right back into the program. If the government intervenes in a qui tam action, the person who filed the suit can recover between 15 to 25 percent of any settlement or judgment attributable to the fraud identified by the whistleblower, according to the Justice Department. The whistleblower’s share is 30 percent if the government does not intervene. In fiscal year 2005, whistleblowers were awarded $166 million.

However, whistleblowers historically have had little success without the government joining their cases, according to Laurence Freedman of Patton Boggs. Freedman says the government picks the good cases so those it passes over may not be as strong. Even if some passed-over cases do have merit, judges may be predisposed to thinking they are not important because the government is not involved.

Also, health care fraud cases are complex and expensive to litigate, according to James Sheehan, associate U.S. attorney for the Eastern District of Pennsylvania. Federal prosecutors now have a lot of experience with such cases and the government has deep pockets to pay for the expert witnesses who explain such complicated matters as pharmaceutical science and the inner workings of FDA.