Whistleblower Cases Expose Recent Pharmaceutical Company Fraud

Several large pharmaceutical firms have been targeted by whistleblowers for illegal activity recently. Ortho-McNeil Pharmaceutical LLC, Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Schwarz Pharma, Inc. have respectively settled issues outside the courtroom regarding their whistleblower allegations. The companies were each fined several million dollars as a result of the settlements, the majority of which was paid out to the federal government. State Medicaid and the whistleblowers themselves also received a cut of the monetary settlement.

Off-Label Topamax Promotion

Ortho-McNeil was caught in violation of the federal Food, Drug, and Cosmetic Act when it sold the prescription medication Topamax in a manner that encouraged physicians to use it for applications that are not on the label. Ortho-McNeil recommended that Topamax, which is labeled as an anti-epileptic medication, be used for psychiatric purposes in clinics across the nation. The pharmaceutical company employed physicians who traveled to clinics and doctor offices and promoted the use of Topamax for off-label symptoms. The company pled guilty to a misdemeanor and was fined $6.14 million, which will be distributed between the federal and state government, as well as the whistleblower who reported the wrongdoing to the authorities.

False Claims Act Allegations

Ortho-McNeil-Janssen was also implicated in the suit against Ortho-McNeil for their role in promoting the off-label Topamax use. Through the improper promotion of Topamax, Ortho-McNeil-Janssen caused several federal health care programs to file false claims that cited the improper usage. The false claims cannot be reimbursed, which leaves the programs footing the bill for the prescription medication. Ortho-McNeil-Janssen has been ordered to pay approximately $74 million to the federal programs, as well as the state Medicare program. The whistleblowers in this case will net more than $9 million dollars for their cooperation during the ordeal.

Schwarz Pharma, Inc. Pays Separate Settlement

Schwarz Pharma has been accused of not informing Medicare and Medicaid that two of the company’s pharmaceutical products did not qualify for reimbursement. The medications Deponit and Hyoscyamine Sulfate Extended Release were not fully regulated, which meant they did not qualify for coverage under federal health care insurance programs. Schwarz misrepresented their status in quarterly reports, and misrepresented the medications to government medical agencies. Schwarz will pay $22 million in fines to cover their wrongdoing under the False Claims Act. In this case, the two whistleblowers will receive $1.8 million each for their parts in the discovery of the crime.