Industry News

The Pandemic and False Claims Act

lab tray with two corona-viruses

Is your drug and medical device/testing industry under a lot of pressure since the COVID-19 pandemic? Did you notice the federal government is increasing spending? The government is pushing to quickly develop a new vaccine and treatment and testing products.

Pharmaceutical, medical device and diagnostic and laboratory tests will be under intense scrutiny by the DOJ’s  for violations of the False Claims Act. It’s anticipated that with the increased federal support there will be an increased likelihood of False Claims Act sanctions on firms. It is advisable that any firms who received such assistance take measures to proactively mitigate any potential False Claims Act violations. According to Michael Volkov in his article Drug and Medical Device Fraud Risks Increase in Pandemic Era

“The False Claims Act has broad application in the drug and device industry covering not only kickbacks to healthcare providers but can extend to fraudulent claims of efficacy that form the basis for reimbursement under Medicare and Medicaid.  Federal prosecutors have used the False Claims Act to focus on quality and manufacturing deficiencies.”

Kickbacks and bribery are historically a major concern for medication and product firms. Pre-pandemic,  the majority of lawsuits derived from the False Advertising Act included unlawful kickbacks/inducements for illicit payments to physicians, consumers or those influence the decisions to procure or recommend specific medical products. While drug and device companies have gotten creative with their bribery schemes, they have been caught by prosecutors reviewing the detailed Sunshine Act reports.

The pandemic has created significant opportunities for the drug and device sector. It’s critically important that any product that can be fast tracked by the FDA be above board with any efficacy claims particularly if there’s any potential to harm prospective patients. Companies must ensure that their marketing campaigns are supported by scientific facts as the DOJ is posed to act decisively on any infractions.  For organizations in this high-profile post-pandemic market, organizational management initiatives regarding safety problems are crucial.



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