The Effects of False Claims Act Whistleblowers on the Pharmaceutical Industry

Abstract

The whistleblower (or “qui tamâ€) provisions of the False Claims Act allow private citizens to bring suit on behalf of the government against individuals or corporations who have submitted false or fraudulent claims to the government. Under the Act, a whistleblower is entitled to a percentage of the damages or settlement that the government ultimately receives as a result of the lawsuit. The qui tam provisions have been used with increasing frequency in recent years to initiate lawsuits against pharmaceutical manufacturers for fraud that these companies have allegedly committed against federal and state health care programs. This paper attempts to explain the effects that these whistleblower lawsuits have had upon the pharmaceutical industry. This paper also proposes ways that the False Claims Act and government enforcement efforts could be reformed in order to reduce both frivolous qui tam lawsuits and the need for such extensive False Claims Act prosecution.