2012 Will Be a Record Year for Fraud Recoveries

Will $9 billion be returned to the American people in FY 2012 thanks to cases filed under the False Claims Act? 

Things are lining up that way. 

Among the big cases queued up or already settled:

  • Merck: The Vioxx off-label marketing fraud has been settled for $950 million.
  • GlaxoSmithKline: A series of drug frauds is said to be settled in principle for $3 billion. 
  • Abbott: The company has reserved $1.5 billion to settle litigation associated with the illegal marketing of Depakote. 
  • Amgen: The company has reserved $780 to settle litigation associated with the illegal marketing of Aranesp.
  • Oracle: The company has settled a GSA price-gouging case for $200 million.
  • NYC: New York City will pay $70 million for Medicare billing fraud.
  • LHC Groups, a home health care provider, will pay $65 million for billing fraud.
  • Pfizer: The company is expected to either go to trial or settle a case dealing with the illegal marketing of Protonix. The minimum recovery under either scenario is expected to be in excess of $500 million. 
  • Ranbaxy: A settlement in excess of $400 million is expected for adulteration of HIV drugs. 
  • Sandoz (Novartis):  The company has agreed to pay $150 million for Average Wholesale Price fraud involving a series of drugs.
  • Maxim: The company has agreed to pay $150 million for Medicaid home health care fraud. 
  • Johnson & Johnson:  The company has agreed to settle a criminal charge related to illegal marketing of Risperdal, and a civil settlement in excess of $1 billion is expected. 
  • Agility/Public Warehouse. The Kuwaiti-based defense contractor is expected to settle a price-gouging case for a sum in excess of $500 million.
  • WellCare Health Plans: The company has reached a preliminary deal with DoJ for a sum in excess of $137 million, to settle a case involving billing for newborn health care services.
  • Medtronic: The company has agreed to pay over $23 million for fraud related to cardiac defibrillators and pacemakers.

Bottom line: A $9 billion recovery, counting civil, state and criminal fines, is within the realm of possible for FY 2012.