Practice Areas

Pharmaceutical Fraud

Pharmaceutical fraud against Medicare and Medicaid takes many forms, including marketing drugs for unapproved uses, inflating drug prices reported to government programs, and manipulating Medicaid rebate obligations. If you work in the pharmaceutical industry or in a healthcare setting and have witnessed any of these practices, you may have the basis for a qui tam case. Reach out for a confidential conversation. There is no obligation.

Practice Areas

Pharmaceutical Fraud

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WHAT IS PHARMACEUTICAL FRAUD?

Pharmaceutical fraud occurs when drug manufacturers, distributors, or healthcare providers engage in conduct that results in false or inflated claims being submitted to Medicare, Medicaid, or other federal healthcare programs for prescription drugs. This includes promoting drugs for uses the FDA has not approved, reporting false or inflated prices that federal programs rely on to set reimbursement rates, and failing to pay the Medicaid rebates that manufacturers are legally required to provide.

Because pharmaceutical fraud results in false claims being paid by federal healthcare programs, it falls within the scope of the False Claims Act. Healthcare insiders, pharmaceutical employees, and others with direct, first-hand knowledge of these practices may be eligible to file a qui tam lawsuit on behalf of the government and receive a share of any financial recovery.

After a four-week trial in fiscal year 2025, a federal court entered a judgment against Omnicare and CVS totaling $948.8 million, including treble damages and penalties, for billing Medicare, Medicaid, and TRICARE for over three million false claims for drugs dispensed without valid prescriptions to elderly and disabled patients.

Source: U.S. Department of Justice, FCA Fact Sheet FY 2025, January 2026 | justice.gov

Legal basis: 31 U.S.C. § 3729 (False Claims Act) | 42 U.S.C. § 1396r-8 (Medicaid Drug Rebate Program) | Source: uscode.house.gov

TYPES OF PHARMACEUTICAL FRAUD THIS PRACTICE HANDLES

Pharmaceutical fraud against federal healthcare programs takes several forms. The following are the most common types handled by this practice.

Off-Label Marketing: The FDA approves drugs for specific indications. Pharmaceutical companies are prohibited from marketing or promoting their drugs for uses the FDA has not approved. When off-label promotion causes physicians to prescribe a drug for an unapproved use and that prescription is submitted to Medicare or Medicaid for reimbursement, the resulting claim may be a false claim under the False Claims Act. Sales representatives, medical science liaisons, and marketing employees who are aware of off-label promotional activities may have direct knowledge of a fraud scheme.

Drug Pricing Fraud: Medicare and Medicaid reimbursement rates for many drugs are set based on prices reported by manufacturers, including Average Wholesale Price (AWP) and Best Price. Drug pricing fraud occurs when manufacturers knowingly report false or inflated prices to government programs, causing those programs to overpay for covered drugs. In fiscal year 2025, Medisca Inc. agreed to pay $21.75 million to resolve allegations that it established false and inflated AWPs for compound prescription ingredients to increase reimbursement received by its pharmacy customers from federal healthcare programs.

Medicaid Rebate Fraud: Under the Medicaid Drug Rebate Program, pharmaceutical manufacturers are required to pay rebates to state and federal Medicaid programs based on the lowest prices they charge to any customer. Medicaid rebate fraud occurs when manufacturers fail to report their true Best Price, thereby underpaying the rebates owed to Medicaid. Employees with access to pricing data, government contracts, or rebate reporting systems may have direct knowledge of this type of fraud.

Reporting False Average Wholesale Price (AWP) Information: Pharmaceutical manufacturers are required to report accurate price information, including AWP, to the federal government. Knowingly reporting false or inflated AWP information causes Medicare and Medicaid to pay more for drugs than they should. This practice has been the subject of significant False Claims Act enforcement, and employees in pricing, finance, and compliance roles may have direct knowledge of reporting practices that do not reflect actual market prices.

Legal basis: 31 U.S.C. § 3729(a)(1)(A) and § 3729(a)(1)(B) (False Claims Act) | 42 U.S.C. § 1396r-8 (Medicaid Drug Rebate Program) | Source: uscode.house.gov

WHO CAN REPORT PHARMACEUTICAL FRAUD?

The strongest pharmaceutical fraud qui tam cases come from current or former employees who have direct, first-hand knowledge of the fraudulent conduct from inside the organization. This includes pharmaceutical sales representatives and medical science liaisons who have been instructed or observed to promote drugs for unapproved uses, pricing and finance employees who are aware that reported AWP or Best Price figures do not reflect actual prices, compliance and legal staff who have identified pricing, rebate, or marketing practices that violate federal law, and healthcare providers or billing personnel who have been influenced by off-label promotional activity that resulted in claims being submitted to Medicare or Medicaid.

You do not need all the documentation before contacting us. If you have credible, first-hand knowledge of what you believe is pharmaceutical fraud against a federal healthcare program, that is enough to start a confidential conversation. We investigate thoroughly before asking for any commitment.

In fact, many former employees come forward with knowledge of fraudulent practices by their former employers after they have been demoted or terminated for complaining to their supervisors about the fraudulent practices or leaving their employment because they refuse to participate in the fraud.

Legal basis: 31 U.S.C. § 3730(b) (qui tam provisions) | Source: uscode.house.gov

YOUR PROTECTIONS AS A WHISTLEBLOWER

When you file a qui tam complaint, it is submitted under seal and served on the Department of Justice and any state agencies that have been impacted by the alleged fraud. During the time the case is under seal, your employer is not notified and does not receive a copy of the complaint. Your identity remains protected throughout the government’s investigation.

The False Claims Act prohibits your employer from firing, demoting, suspending, harassing, or otherwise retaliating against you for reporting fraud or participating in a qui tam case. These anti-retaliation protections apply to both current and former employees.

If your employer retaliates against you, you have legal remedies that include reinstatement, two times the amount of back pay owed, interest on that back pay, and compensation for special damages including litigation costs and attorney fees.

Legal basis: 31 U.S.C. § 3730(h) (anti-retaliation) | 31 U.S.C. § 3730(b) (under seal filing) | Source: uscode.house.gov

WHISTLEBLOWER REWARDS

When a qui tam lawsuit results in a financial recovery, the False Claims Act entitles the relator to receive a percentage of the total amount recovered by the government. If the government intervenes and takes over the case, the relator may receive between 15% and 25% of the recovery. If the government declines to intervene and the relator proceeds independently, the share can rise to between 25% and 30%. There is no cap on the dollar amount of the reward. We work on a contingency fee basis. There is no upfront cost, and if there is no recovery, you owe us nothing.

Legal basis: 31 U.S.C. § 3730(d)(1) and § 3730(d)(2) | Source: uscode.house.gov

About This Practice

Arvind Bob Khurana has over 27 years of experience in qui tam and False Claims Act litigation, complex commercial litigation, and class action matters. He began his career at a top international defense firm and joined a national class action firm in 2005, becoming partner in 2009, where he worked on ERISA actions, qui tam cases, securities fraud, and antitrust matters. He is admitted to the New York State Bar and represents whistleblowers in federal courts nationwide.

We are selective. Before we ask for any commitment, we investigate the claim, explain the facts and the risks, and give you a complete picture of what you are facing. We never ask you to sign a retainer agreement until you have the full picture and have decided, on your own terms, that you want to move forward. You remain in control throughout.

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Arvind Bob Khurana has over 27 years of experience in complex litigation. We work on contingency. There is no upfront cost and no obligation to proceed.