Tuesday, July 3, 2012

Commentary on GlaxoSmithKline Settlement - The Government Push is Definitely on Health Care Fraud

This $3 billion settlement between GlaxoSmithKline and the government is the largest settlement in the health care fraud arena.   But DOJ's focus on health care fraud is not limited to this one case.According to TRAC reports here for "FY 2011 the government reported 1,235 new health care fraud prosecutions."  This is particularly noteworthy because it demonstrates a number that is "up 68.9% over the past fiscal year when the number of criminal prosecutions totaled 731" in the health care fraud area. If one looks at the percentage change from 5 years ago, it is up 134%, from ten years ago 95.7% and 20 years ago 740%.  This increase in prosecution of health care fraud is incredible.   And the place showing the highest amount of fraud is in the Southern District of Florida.

The government took some wrong turns initially in the GlaxoSmithKline case when they proceeded against the former VP and Associate General Counsel of the company. Lauren Stevens had been initially charged with a 6-count Indictment for the alleged crimes of obstruction (1512), falsification and concealment of documents (1519) and false statements (1001). The case was dismissed here with all kinds of revelations  (like what co-blogger Sol Wisenberg noted on June 2011 - how the Maryland US Attorney refused to sign the indictment here).  See also David Stout, Main Justice, Lauren Stevens: A Case the DOJ Would probably Like to ForgetTo me it seemed like an indictment of a possible discovery violation, if that, by none other then the DOJ, who had its share of discovery violations in failing to provide Brady material in cases like the Ted Stevens case.

But this latest settlement with the company is an important step forward in saying that the current administration is concerned not only about providing health care to all, but also in not allowing companies to commit fraudulent acts. The GlaxoSmithKline website has its 2011 Corporate Responsibility Report on its front page here and a statement here, which includes a statement from CEO Sir Andrew Witty saying "[o]n behalf of GSK, I want to express our regret and reiterate that we have learnt from the mistakes that were made." 

White collar cases can take many years to resolve and many, such as whistleblowers (see here & here), may have difficult times in the process of waiting.  But it is important to congratulate the DOJ on not going for a quick "short-cut" resolution here and instead taking the time, energy, and money, to investigate a company on multiple levels.  Resolving it also is a strong cost-saving measure. 

(esp)(with disclosure that she received her B.S. from Syracuse - the home of TRAC).

http://lawprofessors.typepad.com/whitecollarcrime_blog/2012/07/commentary-on-glaxosmithkline-settlement.html

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"But it is important to congratulate the DOJ on not going for a quick "short-cut" resolution here and instead taking the time, energy, and money, to investigate a company on multiple levels. Resolving it also is a strong cost-saving measure."

What's to stop recidivism if the criminals are let off the hook with only monetary penalties?

Some would argue that, since the DOJ "didn't" take a quick "short-cut" resolution, that they have a solid case against the perpetrators, and that they shouldn't settle the case.

Justice is more important than cost-savings.

Posted by: Cynical Pharmacist | Jul 8, 2012 10:47:58 PM

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