Qui Tam Whistleblower Health Fraud Lawsuit California's Largest

Sacramento, CAA Qui Tam Whistleblower lawsuit in California now has the state Insurance Commissioner in its corner, alleging that a major pharmaceutical manufacturer provided doctors with perks and kickbacks in exchange for prescribing that company's products. The alleged scheme, if proven true, is thought to have cost health care insurers in the state of California up to $3.5 billion, and remains so far the largest health insurance fraud case pursued by the California Department of Insurance.

A press release from States News Services dated March 18 notes that the qui tam lawsuit was originally brought by former employees of Bristol Myers-Squibb (BMS). Michael Wilson, and Eve and Lucius Allen allege in their suit that BMS allowed their sales representatives to entice doctors into prescribing their products through the offer of incentives such as paid trips, tickets to sporting events, expensive meals and other forms of honoraria.

Given that the alleged scheme may have cost the health care system in the State of California billions of dollars in drugs allegedly purchased due to illegal incentives, the Insurance Commissioner for the State of California has now become involved in the action along with the original government whistleblowers.

A qui tam lawsuit can be brought by a private citizen or citizens, if there are allegations of fraud against the government.

"This sort of fraud has long plagued our health insurance system, leading to billions of dollars annually in added health care costs nationally," Insurance Commissioner Dave Jones said. "Besides the obvious and deplorable ethical violations in such cases, health care fraud also leads to higher premiums for consumers and an unnecessary and unjust increase in health care costs. As Insurance Commissioner, I will use the full force and resources of this department to root out insurance fraud and hold all responsible people and companies accountable.

"In this particular case, we are uncertain whether the kickback scheme is still occurring," Jones added. "If discovery discloses that violations are continuing, the Department will seek an injunction and penalties to address those violations."

Doctors, according to the Hippocratic oath, are supposed to prescribe the most appropriate drug—regardless of the manufacturer—to achieve maximum value and benefit to the patient. The doctor should not prescribe a drug that would have fewer benefits than another, but the prescribing of which meets the criteria of a relationship between the doctor and a pharmaceutical rep or company. Pharmaceutical reps do not sell drugs to doctors per se, given that doctors do not actually purchase or dispense drugs. Pharmacies do that, with the involvement of private and state health insurance. However the doctor, while not actually purchasing prescription drugs, holds all the power by virtue of the prescribing process. Thus, the pharmaceutical rep curries their influence, and such alleged unsavory incentives fly in the face of good practice and the law, so say the government whistleblowers.

The Qui Tam Whistleblower action was originally filed under seal in Superior Court, Los Angeles. A jury will decide the case.