The U.S. Department of Justice settled a qui tam lawsuit with Dr. John Kiraly and his wife Rena. Dr. Kiraly is an oncologist in Lodi, California. Prosecutors say that he was importing chemotherapy drugs from an unlicensed supplier in the United Kingdom. Some of the drugs were counterfeit and contained no active pharmaceutical ingredient. It is unknown how much harm his patients suffered as the result of receiving fake drugs.
Under terms if the settlement, the Kiralys will pay $300,000 to the government. The settlement doesn’t prevent patients from bringing their own claims for medical malpractice, however.
Medicare Fraud and Qui Tam Lawsuits
The Justice Department’s lawsuit was brought under the federal False Claims Act. Also called a qui tam lawsuit, the law allows citizens (whistleblowers) to bring claims on behalf of the government. After a period of investigation, the government can decide to take over the case and prosecute to conclusion. Often the government declines to prosecute and lets the whistleblower’s lawyer prosecute.
Qui tam lawsuits are becoming more popular because the whistleblower – called a “relator” under the False Claims Act – can receive a sizable percentage of whatever the government collects from the wrongdoers.
In this case, investigators found that Dr. Kiraly was importing drugs from an unlicensed supplier. Unlicensed pharmaceutical companies are not subject to rigorous inspections and quality control rules. Counterfeit drugs are unfortunately frequently found at unlicensed drugs companies. In this case, regulators say the drugs were purchased from Warwick Healthcare Solutions, also know as Richards Pharma.
One of the drugs imported from Warwick was Altuzan, a non-FDA approved cancer medication. Worse, when the FDA tested a batch of Altuzan, lab tests revealed that it was counterfeit. Counterfeit drugs are always a danger but unlike many over the counter drugs used to treat simple maladies, Altuzan is used to treat brain tumors and certain cancers such as kidney, lung, colon and rectal.
Qui tam lawsuits allow anyone with inside information to file a lawsuit in the name of the government. Assuming you are the first to file and there is an ultimate recovery, the whistleblower can receive between 15% and 30% of whatever the government collects. Here that means between $45,000 and $90,000.
Most healthcare fraud qui tam cases settle for a million dollars or more. This case points out, however, that Justice Department will prosecute smaller cases and even cases against a single doctor. In our experience, when patient safety is on the line, no case is too small.
A Health and Human Services special investigator commented on the settlement and said, “Patients getting life-saving prescriptions from their doctors must be able to trust that their medicines have been FDA-proven as safe and effective. Our investigators tirelessly pursue those who ignore requirements protecting patient health in order to increase profits.”
Medicare fraud often involves healthcare professionals simply trying to squeeze a few extra bucks out of the system. This case involved phony cancer medication, a situation that endangered lives and served no useful purpose other than lining Dr. Kiraly’s pocket.
There is never any excuse for putting profits over patients. Although the FDA and U.K. authorities shut down Warwick, we are sure that similar scams still exist. With the cost of some cancer medications costing over $1000 per dose, we expect to see more of these schemes.
MahanyLaw – Qui Tam Lawyers
There are hundreds of lawyers will accept and file qui tam cases. Lawyers know that these cases often are worth millions of dollars. Unlike prosecuted correctly, however, they are often worth nothing. There is no in between. Many of these same lawyers that are quick to accept a case run away when the going gets tough. Unfortunately, there are only a handful of lawyers that truly concentrate on these cases.
If you have inside information about healthcare fraud including dispensing drugs purchased from an unlicensed facility, call us. Our whistleblower lawyers have helped clients collect over $100,000,000 in reward money. Qui tam cases are what we do, 7 days a week. (We wrote the book on whistleblower lawsuits, literally.)
Need more information? Contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct).