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Qui Tam

: Virginia Qui Tam Law

Announcing the Largest Federal Qui Tam/False Claims Act Settlement in History--and Virginia's Share

By Zachary A. Kitts

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Today, the United States Department of Justice announced the largest qui tam/False Claims Act settlement in history--all totaled, Phizer will pay $2.3 billion to settle civil and criminal allegations that it committed a wide variety of fraud with regard to a number of its drugs.

Less than half of this total amount (about $1 billion) is for allegations related to the federal False Claims Act.  The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

Among other allegations, Phizer (along with a number of its subsidiaries) are alleged to have misbranded the drug Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory that Phizer pulled from the market in 2005.

Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called "off-label" uses ? i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns.

The settlement is between the United States and a number of states, including Virginia, which will received $12 million according toVirginia Attorney General Bill Mims.

A total six whistleblowers (or qui tam relators) filed lawsuits under the federal False Claims Act and various state false claims acts, triggering the investigations that led to this settlement. As their statutory share, the six individuals will share more than $102 million in relator's fees.

This case is another fine example of excellent teamwork between the private sector (i.e., the private qui tam lawyers who represented the six individual relators), numerous state Attorney Generals, the United States Department of Justice, and the U.S. Attorneys for the District of Massachusetts, Eastern District of Kentucky, and the Eastern District of Pennsylvania.

Congratulations to everyone who contributed to this fine job. Nationwide, the pace of false claims act recoveries is picking up speed--the old record for the largest qui tam recovery in history (the amount was over $1 billion) lasted less than four months. In Virginia, our Medicaid Fraud Control Unit has done a fine job of prosecuting these claims to the fullest extent of the law; we can only hope that the next Attorney General of Virginia will pick up the pace on non-health care civil prosecutions under the Virginia Fraud Against Taxpayers Act.

Full post as published by Virginia Qui Tam Law on September 02, 2009 (boomark / email).