What is Pharmaceutical Kickbacks Fraud?

Passed in 1987, the Anti-Kickback statute [42 U.S.C. § 1320a-7b(b)] prohibits any party from making or accepting any form of payment—cash, or in kind—that is intended to encourage or reward a healthcare provider or purchaser to recommend, prescribe, or purchase any good or service that can be reimbursed or paid for by a federally-funded healthcare program, such as Medicare or Medicaid.

In the case of the pharmaceutical industry, the law prohibits pharmaceutical companies from giving physicians undue incentives for prescribing their products if reimbursable under a government health program. All parties involved in pharmaceutical kickback schemes are liable for their actions.

Identifying Pharmaceutical Kickbacks

Pharmaceutical kickback schemes do not always involve outright bribes. In fact, kickbacks can be any type of improper incentive such as free vacations, unrestricted grants, and paid consulting arrangements. Essentially, illegal pharmaceutical kickbacks are those designed to increase the pharmaceutical company’s market share by influencing physicians’ choices about what to recommend or prescribe for their patients.

There are certain exemptions, or “safe harbors,” for legitimate payments made to doctors, hospitals, and other purchasers of drugs or medical equipment. These include leasing of equipment or space, payment for services rendered, and other contracts. However, to qualify for “safe harbor” exemption, these arrangements must meet certain strict criteria. Leases and contracts must explicitly state all details of the arrangement, and must provide no more than fair market value for equipment or services. Any additional payments or contracts that do not meet “safe harbor” requirements are considered illegal kickbacks.

Reporting Illegal Kickbacks

Because compliance with the Anti-Kickback statute is a prerequisite for participation and reimbursement from government healthcare programs, any claims for reimbursement that are tainted by kickback arrangements can be considered pharmaceutical fraud.

Pharmaceutical fraud robs the government of funding desperately needed to provide adequate medical care for seniors and lower-income families. Participation in a kickback scheme is not only highly unethical, but can result in a felony conviction under the Anti-Kickback statute.

If you have knowledge of a pharmaceutical kickback scheme, you may be able to initiate a qui tam lawsuit under the False Claims Act. Whistleblowers who report this type of pharmaceutical fraud are performing an important public service by recovering damages for the government and protecting patients from physicians who prioritize financial gain over patient safety and wellness.

Therefore, if you bring a qui tam action reporting pharmaceutical kickbacks, you may be eligible for whistleblower protection and rewards under the False Claims Act.

Kenney & McCafferty is a high-profile national law firm with the experience necessary to help you file a successful qui tam lawsuit. Our lawyers focus almost exclusively on qui tam and whistleblower litigation nationwide.

We have recovered billions of dollars for the government, resulting in multi-million dollar rewards for our whistleblower clients. In fact, qui tam attorney Brian P. Kenney represented whistleblowers in the two largest False Claims Act litigations ever settled—a 2009 $2.3 billion settlement with Pfizer and a $3.1 billion dollar settlement with GlaxoSmithKline.

If you have knowledge of a fraud or false claim against the government, please contact our qui tam lawyers today by calling 800-533-1015 or email us.

Kenney & McCafferty attorneys will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys during these consultation services are confidential and protected by the attorney-client privilege.

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