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Editor: Mike Bothwell
Profession: Qui Tam Attorney

Category: Qui Tam Legal News

A small group of whistleblowers relying heavily on a handful of state false claims acts--and their qui tam provisions--have started a national trend of suing drug companies for overcharging states for medicine.

At the end of April, the Attorney General of Hawaii announced that he was pursuing reimbursement from 44 drug companies under the False Claims Act for overcharging Hawaii's Medicaid and Medicare programs. As an example of abuse, the Attorney General cited a finding by the DOJ in an earlier Massachusetts' lawsuit that Baxter misled government agencies into believing that its average price for sodium chloride was $928.51, when in reality it was $1.71--a 54,199% markup.

While Hawaii is just the latest state to use the FCA against drug companies, it is widely believed that historically, this type of fraud and abuse have been a major factor in the U.S. healthcare crisis. Hawaii announced that "the cost of prescription drugs in the Medicaid programs have soared from $45 Million in 1999 to $117 Million in 2004, an increase of 160%."

State false claims acts with qui tam provisions are reforming the Medicaid debate all over the country. Any state caught without one, is missing the most effective tool against fraud, waste and abuse.