Lawyers For Reporting Pharmaceutical Sales Fraud
Andrew had been a successful pharmaceutical sales professional for a drug manufacturer for many years. When a large independent sales organization offered him the opportunity to move to Southern California for the remaining years of his career, he jumped on board. After a few months of lackluster sales performance, however, he was ordered to start offering kickbacks to doctors and hospital administrators. When he refused to participate in the illegal scheme, he was fired for lack of sales performance.
Pharmaceutical companies are part of a multibillion-dollar industry. Many companies fight among themselves to get their products to a small number of patients requiring the highly specialized medication. When so much money is at stake, unethical sales and marketing often result.
Although there can be many types of fraud involving pharmaceutical sales and marketing, these are some of the most common that are reported in whistleblower cases under the Federal False Claims Act and the federal Anti-Kickback Statute, 42 U.S.C. §1328-7b:
- Illegal kickbacks: Kickbacks include direct payments to licensed medical professionals, health insurers and pharmaceutical benefits managers for prescribing medications or products made by a specific manufacturer. Other types of noncash illegal kickbacks include vacations, tickets to major events, research funding and placement on paid “advisory boards” that require no actual participation to receive payment.
- Off-label marketing: The federal Food and Drug Administration (FDA) approves drugs for the treatment of very specific medical conditions. Pharmaceutical manufacturers are prohibited from marketing the drug for any other purpose than what it is labeled for. However, doctors may prescribe medications to treat symptoms, even if the specific condition has not been diagnosed. Pharmaceutical companies often have their sales staff promote products for “off-label” usage when selling directly to doctors.
- Inflated product prices: Federal Medicare sets the prices for drugs prescribed to program participants and Medicaid programs operated by the states. The price charged is supposed to be the average wholesale price but pharmaceutical companies often artificially inflate the prices significantly. The inflated prices often serve as a financial inducement for pharmacists, benefits managers and other parties who may benefit.
- Fraud involving billing Medicaid based on “best price” available: To be included in the Medicaid program, pharmaceutical companies must agree to sell their drugs to the federal government at the lowest price. However, these companies often make their products available to pharmacists, health maintenance organizations and other organizations at a lower price, without reporting it to the federal government.
This is a summary of just a few of the most commonly known types of fraud and corruption practiced by pharmaceutical companies and wholesale distributors. In an annual $100-billion industry, the manufacturers continue to find clever ways to beat the laws.
Retaliation For Reporting Fraud
If you are in the pharmaceutical manufacturing industry or pharmaceutical sales in California and have faced retaliation for reporting your employer’s illegal tactics or for refusing to follow an illegal directive, call us, the attorneys of Hennig, Ruiz & Singh in Los Angeles. We are a team of leading employment litigation lawyers with a strong record of protecting employees’ rights in cases involving whistleblower retaliation.
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Please visit our Do I Have A Case? page to answer a few questions relating to your circumstances. If the questionnaire indicates you may have a case against your employer, call us at 213-985-1305 or contact us by email for a free consultation. Se Habla Español.