False Claims Act settlements reach $750M in 2019 first half

The U.S. Department of Justice has announced more than $750 million in settlements under the False Claims Act in the first half of this year, a slight uptick from this point in 2018 but somewhat lower than first-year highs set in recent years, says a law firm’s analysis.

Los Angeles-based Gibson, Dunn & Crutcher LLP said in its report, however, that the “dollar totals tell only part of the story,” because neither the DOJ nor whistleblowers have considerably scaled back FCA investigations or whistleblower complaints.

As in recent years, the report said, the DOJ secured most of its FCA recoveries from enforcement actions involving health care and life sciences entities. It said cases alleging violations of the Anti-Kickback Statute and the Stark Law, which generally prohibit various types of remunerative arrangements with health care providers, continued to predominate.

The report said that this year, Anti-Kickback Statute enforcement activity includes several large recoveries totaling nearly $250 million from pharmaceutical companies accused of unlawfully covering Medicare copays for their own products through charitable foundations.

The report also cited a DOJ statement issued in June, in which it said Phoenix-based opioid manufacturer Insys Therapeutics Inc. had entered into a $225 million settlement in a case in which it had been accused of paying bribes to doctors. The DOJ “backed up its statements regarding its plans to combat the opioid epidemic,” said the report. The company filed for bankruptcy about a week later.

Gibson Dunn said in its January report the DOJ had recovered almost $2.9 billion from companies under the FCA in fiscal year 2018. 

Earlier this week, the DOJ said an ITT Inc. unit has agreed to pay $11 million to settle False Claims Act allegations that it supplied inadequately tested electrical connectors to the military, with a whistleblower to be awarded $2.1 million in the matter.