Whistleblower Gets $5.1 Million in Pharmaceutical Settlement

The Justice Department recently announced receipt by the United States of $30 million plus interest from GE Healthcare Inc. The money comes from a settlement with GE over allegations it violated the False Claims Act by causing Medicare to overpay for one of its medications.

$5.1 million of the recovery will go to Michigan resident James Wagel, who filed a 2006 lawsuit highlighting the violations.

Wagel’s suit was brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permits private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery.

Wagel’s complaint was filed by Monica P. Navarro, special counsel to Frank Haron Weiner, and J. Marc Vezina from Vezina & Gattuso. It alleged that Amersham Biosciences, which was acquired by GE Healthcare in 2006, knowingly provided false or misleading information to the federal Medicare program from 2000 to 2003 in connection with the distribution of the radiopharmaceutical agent Myoview, a drug used by health care providers in the cardiology field to perform nuclear stress tests.

Wagel’s lawsuit contended that Amersham’s conduct caused the Medicare program to reimburse Myoview at artificially inflated rates. His complaint further alleged that Amersham Biosciences orchestrated a scheme under which Myoview was improperly diluted in order to maximize the number of doses available per vial, thus leading to an increased number of patient-ready doses and inflated Medicare reimbursements.

Under the terms of the Settlement Agreement with GE Healthcare, Mr. Wagel will receive $5,100,000 as his relator’s share. Pursuant to the False Claims Act, the Defendants will also pay costs and attorneys’ fees.

In a press release, Attorney Navarro said, “Medicare reimbursement operates largely on the honor system. Truthful reporting by entities dealing with Medicare is essential to its integrity. In this case, we believe the company systematically gamed its reporting at the expense of both the patients who received diluted Myoview and the taxpayers who shouldered the burden of this fraud. The False Claims Act was the right tool to stop this abuse, as it took a courageous private citizen to come forward and expose this exploitation of Medicare.”