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Clients’ False Claims Act Suit Against Cardinal Health Leads to $13.125 Million Recovery

January 31, 2022

The United States and several states have settled a federal and state False Claims Act case brought by clients of the Whistleblower Law Collaborative LLC, against Cardinal Health Inc., one of the nation’s largest wholesalers of pharmaceutical drugs and products.

Under the terms of the settlement, Cardinal Health has agreed to pay the United States and the states $13.125 million plus interest. The settlement resolves allegations that Cardinal Health induced physician practices to purchase specialty pharmaceutical products from it by paying them remuneration in advance of the practice making any drug purchases and not in connection with specific purchases.  This arrangement violates the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) because it represents an illegal inducement to alter physicians’ decision-making.  The practices then submitted claims for payment to Medicare and Medicaid programs that were tainted by these kickbacks. Cardinal Health will also enter into a compliance program, called a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.

Our clients, concerned by Cardinal’s payment of these kickbacks, brought valuable knowledge about the fraud to the attention of the government by filing a qui tam complaint under the False Claims Act in 2019. Together, with our clients, Whistleblower Law Collaborative attorneys worked with government prosecutors at the Department of Justice and the United States Attorney’s Office in the District of Massachusetts to help put a stop to the illegal conduct.

We are grateful to our attorneys at Whistleblower Law Collaborative and to the government investigators and attorneys, who were able to help and protect a very vulnerable patient population from the influence of kickbacks on health care.  We are hopeful this settlement will set a good precedent for the industry.

-Our Clients

Whistleblower Law Collaborative commends the bravery and outstanding efforts of their clients and the government prosecutors. Attorney Suzanne Durrell praised her clients “willingness to risk coming forward. Our clients not only recognized the fraud, but because of their knowledge of industry practices, could explain it clearly and persuasively to the government prosecutors.” Attorney David W.S. Lieberman stressed the speed and tenacity of the government prosecutors Evan Panich and Lindsey Ross. “These prosecutors immediately recognized a complex fraudulent scheme for what it was and moved forward with alacrity achieving a significant settlement in less than two years.”

Cardinal Health recruited new customers by offering and paying cash bonuses in violation of the Anti-Kickback Statute and False Claims Act. Kickback schemes, such as this one, have the potential to pervert clinical decision-making and are detrimental to our federal health care system and taxpayers,

United States Attorney Rachael S. Rollins.

Cardinal Health thought it hit upon a surefire moneymaker by paying kickbacks to doctors, which cost health benefit programs millions of dollars in potentially fraudulent claims.  Anyone involved in, or entertaining, similar activity should know that health care fraud is a priority for the FBI, and we will pursue anyone trying to profit from this country’s vital health care system.

Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division.

The Whistleblower Law Collaborative LLC, based in Boston, devotes its practice entirely to representing clients in bringing actions under the federal and state False Claims Acts and other whistleblower programs. Under the False Claims Act, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, the relator is entitled to a share of the government’s recovery.  Among the firm’s many successes is the government’s $885 million settlement with AmerisourceBergen, another pharmaceutical drug wholesaler, for illegal repackaging of injectable drugs into pre-filled syringes.

For more information, contact the Whistleblower Law Collaborative LLC at 617.366. 2800

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