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Drug Industry Settlements In 2010 Largest Ever Under False Claims Act

Assistant Attorney General Tony West announces a drug industry settlement in September.
Manuel Balce Ceneta
Assistant Attorney General Tony West announces a drug industry settlement in September.

The Justice Department has collected a whopping $3 billion in settlements this year with help from whistleblowers and a powerful law known as the False Claims Act, Assistant Attorney General Tony West announced this morning.

And guess where $2.5 billion of that $3 billion came from? Big Pharma.

This year's biggest hauls under the False Claims Act include $669 million of the record-shattering $2.3 billion total the government took from Pfizer over its improper promotion of the painkiller Bextra, $302 million from Astra Zeneca over the anti-psychotic drug Seroquel, and $192 million from Novartis.

West told reporters the Civil War era law had become “one of our most successful civil enforcement tools,” allowing the Justice Department to recover “money that otherwise would have padded the bank accounts of defendants who sought profit over quality.”

And he vowed that the Obama administration would do more to go after individual executives who had green-lighted frauds against the federal government by seeking to bring civil and criminal charges that could put them out of business and in some cases, into federal prison.

“We’re going to hold both companies and individuals accountable,” West said.

Justice Department officials say the 2010 health care recovery is the largest in history, and the total recovery is the second largest, up from some $2.4 billion last year. Altogether, they’ve taken in $5.4  billion since January 2009 under the Act.

Congress recently strengthened the law and expanded the ability of whistleblowers to recover money if they alert the Securities and Exchange Commission to financial fraud.

That, West said, could be one of the next fronts in a battle against fraud that’s been intensifying rapidly.

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Carrie Johnson is a justice correspondent for the Washington Desk.