On December 21, 2017, the Department of Justice (DOJ) issued its yearly report card describing its most noteworthy settlements in fiscal year 2017 with
healthcare providers under the False Claims
Act (FCA).1 In addition to praising the efforts
of its dedicated enforcement staff, the DOJ
sent a message of both acknowledgment and
encouragement to the whistleblowers who
bring alleged FCA violations to its attention.
It makes good sense for the DOJ to
Risks and consequences
use this annual report card as a form
of encouragement for those among
us who believe in reporting blatant
wrongdoing. Unfortunately, this mes-
sage is sometimes received by bounty
hunters, sometimes entirely moti-
vated by retribution or greed, who are
tempted to see wrong when there is
no wrong. Nevertheless, there is plenty
to learn from these significant settlements, and
it never gets old reading about those in posi-
tions of power who abuse the public’s trust
and do the indefensible out of greed. Indeed,
the cases that were featured were stun-
ningly egregious and involved sophisticated
One has to wonder why executives would risk
so much. Perhaps this risk-taking behavior
and the consequences are viewed by some as
the cost of doing business, but for the rest of us
who believe in complying with the law, the following cases are noteworthy.
Shire Pharmaceuticals LLC — $350 million
As a result of a qui tam action brought by
six whistleblowers, 2 Shire Pharmaceuticals
LLC and other Shire subsidiaries (Shire) paid
$350 million to resolve FCA allegations that
it was providing kickbacks and engaging in
other unlawful methods of marketing its product Dermagraft, a bioengineered human skin
substitute approved by the FDA for use in the
treatment of diabetic foot ulcers. The whistleblowers alleged, among other things, that
Dermagraft salespersons unlawfully induced
the use of Dermagraft by incentivizing physi-cians with extravagant dinners, entertainment,
and travel; medical equipment and supplies;
by Joan W. Feldman
False Claims Act 2017 report
card: $2.4 billion recovered
» Don’t assume that a whistleblower complaint cannot be brought against your organization.
» Address compliance concerns promptly, so they don’t fester and result in a qui tam action.
» The government will continue to rely on individuals to bring cases to their attention, motivated by sharing in a federal
» Providing medically unnecessary services to patients is typically not an isolated event.
» The government is likely to increase the use of tools that identify outliers.
Joan W. Feldman ( email@example.com) is a Partner and Health Law Group
Practice Chair at Shipman & Goodwin, LLP in Hartford, CT.