Houston Texas Business Lawyer

Drug Company Fraud Can Lead to False Claims Act Claims

Late in September, a pharmaceutical company called Shire Pharmaceuticals LLC agreed to pay $56.5 million to resolve allegations in a civil lawsuit brought under the False Claims Act. According to the Justice Department: "This settlement represents another important step in our fight against fraud in federally-funded healthcare programs such as Medicare and Medicaid." medication pills

The settlement resolved a variety of allegations based on conduct from 2004 to 2010. A whistleblower came forward and accused Shire Pharmaceuticals of wrongdoing during this time period. The company paid to settle the civil lawsuit, and the federal government received more than $35 million as a result. State Medicaid programs also received more than $20.7 million. Taxpayers benefit when whistleblowers come forward to report wrongdoing, and whistleblowers benefit by receiving a portion of the money recovered. If you believe that you have evidence of fraud by a pharmaceutical company, or by anyone else taking taxpayer money unfairly, it is important to contact a whistleblower attorney in Texas for assistance.

Drug Company Fraud Results in Large Settlement

The civil lawsuit brought under the False Claims Act alleged that Shire improperly promoted Adderall XR for certain uses that there was no clinical data to support. The efficacy of the drug was reportedly overstated during this time as well, particularly as compared with other drugs intended to treat attention deficit hyperactivity disorder (ADHD).

The lawsuit also alleged that Shire sales representatives knowingly made misleading statements between February 2007 and September 2008 regarding the effectiveness and potential for abuse of Vyvanse to state Medicaid committees as well as to individual doctors.

Other allegations in the lawsuit included improper marketing of a drug called Daytrana between April 2008 and September 2010; as well as promotion of two drugs for off-label use between January of 2006 and June of 2010.

Medicaid pays for health services and medications for low-income individuals. This includes coverage for ADHD medications and other drugs. When Shire misled doctors and Medicaid authorities about the effectiveness of its drugs, this resulted in Medicaid payments being made to the company that would not otherwise have been made. As a result, the lies about the drugs were considered to be defrauding the government and the False Claims Act was an appropriate way for a whistleblower to help get government money back.

In addition to paying back money to the government, the settlement also requires that Shire enter into a "corporate integrity" agreement that puts comprehensive safeguards in place. Future marketing efforts will be better regulated to ensure that Shire does not mislead healthcare providers or government authorities about the effectiveness of the drugs that the company produces and sells.

Because of the efforts of a former Shire executive to bring the fraudulent behavior to the attention of authorities, the drug company will thus no longer be able to defraud the government, patients or doctors. The False Claims Act rewards whistleblowers for saving taxpayers money and helping the government to recover funds. In this case, because the settlement is so large, the executive who came forward will receive an estimated $5.9 million.

Contact a  whistleblower attorney in Texas if you believe you have evidence of fraud. Call Brewer & Prichard P.C. today at 800-445-8710  or visit to schedule a consultation.