It’s that time again; time to press the reset button and reflect on the past fiscal year’s FCA statistics. Fiscal Year 2017, which came to a close on September 30th, was a big year here at LLB as it marks the first year we were able to track FCA statistics for the entire year in real time. LLB has been through some changes since the last time we did this; just recently, we premiered our new custom date range tool on the data set for increased precision in your searches and today we premiered a new copy link feature. However, one thing has remained constant: our readership’s interest in FCA enforcement statistics. With that in mind, we now present to you a breakdown of our preliminary assessment of FY 2017:
Bottom Line Up Front: $3.44 Billion Recovered in FY 2017
By our count and subject to our methodological caveats, the DOJ has recovered $3,445,054,511 across 187 settlements and judgments in FY 2017. As we predicted in July, DOJ FY 2017’s total took a nosedive from DOJ FY 2016’s total of $4.8 billion over 288 recoveries. However, similar to last year, the health care industry took the biggest hit by far in both total recovery amount and number of recoveries. The DOJ collected $2.37 billion, approximately 68.8% of the total FCA recovery amount, across 137 recoveries from the health care industry, with $1.2 billion of that total coming out of pharmaceutical defendants’ pockets. In second place is the amorphous “Other” category, with $925 million in recoveries. That is 26.8% of the total recoveries for the year distributed across 42 recoveries in industries other than health care and defense. And, as was the case last year, the defense industry suffered the least, paying just $149 million, approximately 4.3% of the total recoveries, spread across 8 settlements and judgments.
Stacking Up Against Previous Years
DOJ’s take this year is on par with the total recoveries from 2015 and 2013 ($3.58 and $3.84 billion respectively). However, it pales in comparison to the $4.8 and $5.78 billion recoveries from 2016 and 2014, each of those being years with “blockbuster” settlements to boost the totals. One significant reason for the decline from DOJ FY 2016 was the approximately $1 billion decrease in recoveries in the “Other” category. This could be attributable to the winding down of litigation stemming from the mortgage crisis, which we predicted last year (indeed, without the $1.2 billion Wells Fargo settlement padding the FY 2016 Other stats, they would be roughly consistent with FY 2017). We also saw a significant decrease in recoveries from the health care industry from $2.78 billion in DOJ FY 2016 to $2.37 billion in DOJ FY 2017. Yet recoveries from the defense industry stayed mostly steady from DOJ FY 2016 to DOJ FY 2017, with a slight increase from approximately $120 million to $150 million. We at LLB have also considered that the decline in number of recoveries may be a result of delays caused by Escobar.
Qui Tam is King
Of the top 50 recoveries in DOJ FY 2017, only 8 were initiated on the government’s own steam; in fact, you have to count all the way down to the 14th largest recovery before you see the first non-qui tam case. Intervened qui tams brought in the largest total recovery amount of approximately $2.49 billion — but this number may be skewed somewhat by DOJ’s habit of intervening just before settlement of a case that otherwise had been pursued by relators alone. This $2.49 billion total recovery amount was spread across only 79 recoveries, indicating that intervened qui tams were some of the largest recoveries in the past fiscal year. Non-intervened qui tams pulled in $676 million across 23 recoveries. Non-qui tam recoveries present perhaps the most fascinating comparison. Coming in far behind either intervened or non-intervened qui tams, the DOJ only collected $282 million in DOJ FY 2017 in non-qui tam recoveries. However, non-qui tam recoveries were also the most numerous with 85 recoveries. It seems that without relators around to assist, DOJ’s focus may be on quantity over quality of case.
Keep in mind that this analysis is based on our independent tracking of recoveries, subject to verification when DOJ releases its official stats for the year. When that happens, we will go through the fun exercise of comparing their data against ours to see how we did. In the meantime, it is time to close the book on DOJ FY 2017 and head back to square one for DOJ FY 2018. Already, DOJ has thrown seven DOJ FY 2018 recoveries on the board in October totaling $26.9 million. But don’t worry, our analysis on DOJ FY 2017 is just beginning. In subsequent posts, we will dive deeper into the specifics of recoveries by industry and by circuit. Please stay tuned.