Phantom Participants with Real-World Ramifications: Clinical Drug Trial Data Falsification

As if medical-related disinformation was not pernicious enough, unscrupulous actors seek to enrich themselves from falsifying clinical drug trial data. A Florida-based clinical research firm project manager was sentenced to 30 months in prison because of his involvement in a conspiracy to falsify clinical drug trial data. Previously, the primary investigator, clinic owner, and another senior employee at Miami-based Tellus Clinical Research were charged with various counts of mail and wire fraud, money laundering, as well as making false statements to Food and Drug Administration (FDA) inspectors. A researcher or other employee of the medical clinic could have reported this conspiracy to the government and shared in 15-25% of the government’s recovery.

Pharmaceutical companies sponsor clinical research trials to gather data on the safety and efficacy of the drugs they manufacture. Prior to commencing research trials, pharmaceutical companies or “sponsors” must submit to the FDA their “study protocol,” which identifies who can participate, drug dosages and timing, and how the study’s performance will be measured. Sponsors engage contract research organizations (CROs) to perform the clinical trials, and the CRO must ensure compliance with the study protocol and FDA regulations. In this case, a clinical research firm contracted with pharmaceutical manufacturers to conduct trials related to an opioid dependency treatment, an irritable bowel syndrome drug, and diabetic nephropathy or kidney disease medication. The sponsors would reimburse the CRO a set amount per study participant and for some fees and Tellus would pay participants in accordance with the study protocol.

How the research firm gamed the system involved the eligibility requirements for the studies: each of these clinical trials required patients to meet certain requirements for participation. Instead of honestly recruiting patients with the diagnoses needed to participate in the program, the defendants enrolled people without applicable diagnoses and falsely claimed that study participants completed all the requirements in the study protocol, to garner more payments from the clinical trial sponsors. Several of the defendants enrolled friends and family members to bump up the research firm’s participation numbers, and other research firm employees went so far as to misappropriate personal information from third parties without their knowledge or consent. The co-conspirators also falsified clinical notes and medical records of these unwitting participants, claiming to have performed medical exams, drawn blood for testing, and made payments to participants. This elaborate conspiracy served to wrongfully enrich the research firm owner and senior management at the expense of pharmaceutical companies and ultimately patients.

Clinical research fraud is harmful to consumers. As the Assistant Commissioner for the FDA Office of Criminal Investigations (OCI) stated, “Compromised clinical trial data could impact the agency’s decisions about the safety and effectiveness of the drug under review.” Consumers could end up with unsafe medications due to fraudsters’ schemes.

A whistleblower could have reported this fraud to the FDA and ensured only drugs which perform well in clinical trials on real human beings make it to market. The Department of Justice needs whistleblowers to report fraud involving clinical drug trials.

© 2022 by Tycko & Zavareei LLP
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DaVita Agree to $495 Million Settlement in Alleged Medicare Fraud Lawsuit Filed by Qui Tam Whistleblowers

On Monday, May 4, 2015, DaVita Kidney Care, a division of DaVita Healthcare Partners, Inc. (DaVita), and one of the leading dialysis services providers in the United States, agreed to pay the U.S. Government $450 million for allegedly violating the False Claims Act (FCA) when it continuously discarded good medicine and then billed Medicare and Medicaid for it. DaVita also agreed to pay $45 million for legal fees.

According to the lawsuit filed in 2011 by two former employees of DaVita, between 2003 and 2010, when DaVita administered iron and vitamin supplements such as Zemplar, Vitamin D, and Venofer, vials containing more than what the patients needed were used and the rest was thrown away. For example, if a patient only needed 25 milligrams of medicine, DaVita allegedly used a 100 milligram vial, administered only 25 mg, and tossed the rest in the trash. Although before 2001, this practice was condoned by the National Centers for Disease Control and Prevention (CDC) in order to prevent infectious outbreaks caused by the re-entry of the same vial of medicine, the CDC subsequently changed it policies to outlaw this practice.

This FCA lawsuit alleging that DaVita misused and mishandled of medicine, and overbilled Medicare and Medicaid is not the first such allegation against DaVita, which is not a stranger to FCA lawsuits. In fact, DaVita previously settled two other lawsuits in which it allegedly violated the FCA. In October 2014, DaVita agreed to pay the U.S. Government $350 million for allegedly persuading physicians or physician groups to refer their dialysis patients to DaVita by offering kickbacks for each patient referred. And in 2012, DaVita agreed to pay $55 million to the federal government for overbilling the government for Epogen, an anemia drug. These lawsuits were filed by former employees who decided to come forward as whistleblowers and to help to uncover what they considered to be illegal practices by DaVita. Under the FCA, such whistleblowers can bring what is known as a “qui tam” lawsuit, which is brought by a private citizen to recover money obtained by fraud on the government. As an incentive to bring qui tam lawsuits, the FCA provides that qui whistleblowers receive between 15 and 30 percent of the amount of funds recovered for the government.

Provisions of the FCA make it unlawful for a person or company to defraud governmental programs, such as Medicare or Medicaid.

Posted by the Whistleblower Practice Group at Tycko & Zavareei LLP

© 2015 by Tycko & Zavareei LLP