The U.S. Dept. of Justice recovered more than $3.16 billion in False Claims Act settlements in the past fiscal year.
The top 10 settlement payments came from the healthcare industry, and eight of those were from pharmaceutical companies, according to a new report from the advocacy group Taxpayers Against Fraud Education Fund.
The 10 largest of the 145 FCA cases the DOJ settled in in fiscal year 2010 accounted for $2.7 billion, according to TAF. Drugmakers Allergan Inc. (NYSE:AGN) and AstraZeneca LP (NYSE:AZN) and AstraZeneca Pharmaceuticals LP accounted for one third of the settlements. Allergan paid out $600 million to resolve allegations over off-label marketing of Botox and AstraZeneca settled with $520 million over allegations it inappropriately marketed its psychiatric drug Seroquel.
Boston Scientific Corp. (NYSE:BSX) coughed up $22 million, coming in 26th place, and leading other medical device makers. Its subsidiary Guidant used post-market studies to pay kickbacks to physicians, according to the report.
80 percent of the fraud recoveries came from the healthcare industry, according to TAF, although companies from the defense, education, transportation and the oil and gas industries also paid out large settlements. The University of Phoenix settled with the DOJ for $67.5 million for accepting federal funds while in violation of laws prohibiting colleges schools from paying admissions counselors incentives based on the number of students recruited. Their penalty was the 14th highest in the report.
The False Claims Act provides for triple damages plus fines of up to $11,000 per false claim. Most of the claims are precipitated by whistleblowers who work for the perpetrating companies. Whistleblowers are eligible for awards of 15 to 30 percent of the total amount recovered under the Act, according to TAF.