The False Claims Act helps the US government prosecute contractors to federal programs who commit fraudulent activity. Many cases of abuse in areas like Medicare fraud and defense contractor fraud have been tried under this Act.
Federal prosecutors are aided by Medicare whistleblowers, many times employees of these contractors. They are in an especially good position, as insiders, to have knowledge of fraudulent activity which may otherwise go unnoticed.

Until recently, the Act was seldom invoked in relation to the Good Manufacturing Practice Violations (GMP). The GMP safeguards consumers against manufacturing inadequacies or violations.

One might assume it would be used more since one of the government’s biggest health care expenditures is the purchase of pharmaceuticals, under programs such as Medicaid, Medicare and the military personnel’s TRICARE program. In fact, the US government is the world’s largest purchaser of prescription drugs.

On the other hand, the government uses other means to keep drug manufacturers in line. It has prosecuted these companies in other ways and levied substantial criminal fines and penalties as well as requiring disgorgement of revenue accrued from fraudulent actions.

The first large and noteworthy False Claims Act victory against a pharmaceutical manufacturer in violation of the GMP occurred recently.

In October 2010, the US Department of Justice (DOJ) announced the settlement of its first case.

The defendant who pled guilty was GlaxoSmithKline. The company agreed to pay $750 million to resolve its criminal and civil liability. The case centered on alleged shortcoming in its Puerto Rican manufacturing plant.

The government said the company failed to safeguard its drugs from microorganism contamination.

Manufacturers in violation of the GMP can be prosecuted under the False Claims Act because the act prohibits contractors from billing the US government for goods or services which are neither reasonable nor necessary.

Contaminated drugs fit that description, and, as a result, whistleblowers can invoke the Act against manufacturers.

In the SmithGlaxoKline case, the government charged the company’s processes rendered some of its drugs to be without any therapeutic effect. As a result, it made false claims for payment from the government, a clear case of Medicare fraud.

Report Drug Good Manufacturing Practice Violations/Medicare fraud here.

Do you have information about a pharmaceutical company that violates Good Manufacturing Practice standards? Help stop government waste and abuse, and get rewarded for your efforts. Our attorneys have significant experience representing healthcare industry whisteblowers. Complete the secure form on this page or call 1-800-581-1790 for a free no obligation consultation with a lawyer.