Sanofi-Aventis, a large pharmaceutical company, was awarded $38.7 million for its role in bringing a $465 million False Claims Act case against Mylan. The company settled amid allegations that it knowingly misclassified EpiPen as a generic drug so it could avoid paying back the rebates it owed to Medicaid.
The lawsuit was initially filed under the whistleblower provisions of the False Claims Act. The FCA allows private parties to file lawsuits on behalf of the federal government, and then share in any money that is recovered due to the legal action. While whistleblowers in such cases are often private individuals, in this case the whistleblower was a pharmaceutical manufacturer. Sanofi-Aventis is a Paris-based company, but used its American unit to file the lawsuit.
The settlement agreement resolved the allegations that Mylan had wrongly reported EpiPen as a generic drug to the Medicaid office despite the absence of any equivalent drug on the market. In doing so, it could massively increase prices on the markets while avoiding Medicaid rebate obligations. Between 2010 and 2016, Mylan increased the price of its EpiPen by 400 percent, but continued to pay a fixed 13 percent rebate to Medicaid, despite knowing its drug was not a generic.
FCA claims can become quite lucrative
The federal government may choose to intervene in any False Claims Act suits brought forth by private parties. When it does, it is typically an indication that it believes the case has merit and significant value.
The government’s intervention on this specific issue reflected how focused the federal government is on fighting back against healthcare fraud, which regularly costs the government billions of dollars. The False Claims Act is a powerful anti-healthcare fraud tool.
For guidance on how to file a False Claims Act if you are aware of wrongdoing and the steps you should take next, work with a trusted whistleblower attorney at Whistleblower Law for Managers.