On January 9, 2020, the Civil Division of U.S. Department of Justice (“DOJ”) finally released its annual False Claims Act (“FCA”) statistics for filings, settlements, and judgments for fiscal year 2019 (10/1/18 – 9/30/19). In conjunction with its release of the FCA statistics, DOJ also issued a lengthy press release highlighting various cases. That’s worth a quick read, and I will not repeat it here. Rather, let’s look at what the numbers tell us about the state of FCA practice and claims.
Overall, DOJ recovered $3.054 billion in FCA “settlements and judgments” this year; just a bit more than last year’s $2.902 billion. While not the reaching the heady years of 2014, 2012, and 2016 which were $6.1 billion, $5 billion, and $4.9 billion respectively, 2019 was similar to the other $2-3 billion-ish years, recovered by DOJ in 2009-2011, 2013, 2015, 2017-18.
DOJ had a good year in direct file (non-qui tam) cases: 146 cases filed, up 18.7% from 2018. That number tied with 2012 and 2017 as DOJ’s third best year for direct filed cases since 1998. DOJ recovered $844 million in direct file cases last year, which is its fifth best year since 1986.
As for the 636 qui tam cases filed by relators last year, that is the fewest qui tam cases filed since 2011. Qui tams, both intervened and non-intervened, recovered $2.210 billion and that was the second lowest year of recoveries since 2009, where qui tams accounted for $1.976 billion in recoveries.
In intervened qui tam cases in 2019, relators recovered $197 million in relator share awards – the lowest since 2007 and a 34% decrease from 2018. In non-intervened qui tams, relators had a very good year: $74 million in relator share awards, a 49% increase from 2018 and the third best year ever.
If there was a contest for best category of FCA cases ever, it would be health care FCA cases. In fact, except for 2014 when DOJ recovered $3.367 billion in the “Other” FCA category, the recovery in health care related FCA cases exceeded DOD and “Other” in every year since 1997. Heath care as a category should be granted government “Hall of Fame” status.
Total health care related recoveries, in both direct filed and qui tam cases, were $2.605 billion or 85% of the overall FCA recoveries. 70% of all qui tams (449) filed were health care related. 89% of all relator recoveries in 2019 ($197 million) were from health care related qui tams. In direct filed cases, however, health care accounted for only 38% (56 out of 146) of the direct file cases in that category.
DOJ’s press release illustrates that it is not really a large number of health care cases that drives the large health care totals each year. Rather, as in past years, a small number of large recoveries account for the overwhelming portion of the $2.605 billion recovered. For example, Insys paid DOJ $195 million to settle kickback allegations related to the marketing of its drug, Subsys. RB Group paid $500 million to resolve claims relating to its opioid drug, Suboxone. Additionally, seven drug manufacturers paid $624 million to resolve claims that they illegally paid patient co-pays for their own drugs through purportedly independent foundations.
As for Department of Defense (“DOD”) FCA related filings and recoveries, DOJ recovered $252 million, up 57% from the year before. Only 6.2% of the qui tams filed last year (40 out of 636) by relators were related to DOD files, however. In non-intervened cases, only $350,000 was recovered by relators. DOJ filed 13 direct filed cases relating to DOD, which accounted for 13% of the 143 filed.
As for the “Other” category of FCA cases, DOJ recovered $196.7 million, which represents the worst year for “Other” recoveries since 2008. There were 147 qui tams filed in this category, which is the lowest number since 2010, when 135 were filed. On the bright side, if it can be called that, DOJ filed 77 direct file cases, which is a 33% increase over 2018.
Overall, without the “Big Pharma” settlements of years past or the large mortgage fraud settlements after the recession which gave rise to huge recoveries, the number of FCA cases filed and amounts recovered appear to be holding up pretty well, especially in health care.
Finally, in addition to my annual plea that DOJ release FCA statistics for each U.S. Attorney District -- thus far ignored — I propose a few additional statistics. For starters, DOJ should reveal the stats for how long cases are under seal, by district, with an overall award for the top three cases that have been under seal the longest in a given year. Additionally, it would be good to know how many qui tams did the government intervene in, and for cases in which it did not intervene, how many were dismissed by the Court or the relator. A last plea: how many cases did DOJ dismiss under its Granston authority and what were the reasons for their dismissals?