Hagens Berman Blog

Whistleblower News: False Claims Whistleblower, Insys, Corporate Identity Harm

01/17/2020

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Resmed Corp. to Pay the United States $37.5 Million for Allegedly Causing False Claims Related to the Sale of Equipment for Sleep Apnea and Other Sleep-Related Disorders

DEPARTMENT OF JUSTICE

ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers, the Department of Justice announced today.   

The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims.  The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery.  The whistleblowers will collectively receive a roughly $6.2 million share of the settlement. read more »

Insys exec gets 33 months in fentanyl spray scam: Must forefeit $3.6M

BOSTON HERALD

An Insys Therapeutics executive will spend 33 months in prison and forfeit $3.6 million for his role in an illicit fentanyl spray prescription scheme, a federal judge ruled Monday after victims shared the harrowing details of how the opioid destroyed their lives.

Michael Gurry, convicted on a racketeering charge last year with four other Insys executives, ran the Insys Reimbursement Center which tricked insurers into paying for prescriptions of the fentanyl spray Subsys, allowed only to treat breakthrough cancer pain, for patients who didn’t need the powerful medicine, prosecutors say. read more »

Why it’s so hard to hold companies accountable when they break their ethical promises

QUARTZ

As an ice-cream maker, Ben & Jerry’s relies on cow’s milk, but not from just any cows. For four decades, the company has built a reputation for ice cream that does good while tasting good. Its core values, which consumer-goods giant Unilever says it has maintained since acquiring Ben & Jerry’s in 2000, are supposed to extend to the cows supplying its milk. The company publishes a set of “caring dairy” standards on its site, and its pint containers, which feature cartoons of black-and-white milk cows amid green fields and blue skies, assure shoppers its milk and cream come from “happy cows.”

So what if you’ve been buying Ben & Jerry’s for years with the belief its milk came from happy cows, and then learned only a fraction of it came from farms that met its caring dairy standards, while the majority came from animals on factory farms? The question isn’t just hypothetical. Ben & Jerry’s is currently defending its practices in a lawsuit that seems tailor-made to test a new theory of law aimed at holding companies to account for their unmet promises.

It’s not the only example of a company whose customers may have felt it made a moral commitment it didn’t keep. In the “Dieselgate” scandal a few years back, Volkswagen admitted to cheating emissions tests of diesel engines it marketed in the US with a big campaign about their low emissions, prompting an outcry from regulatory agencies and consumers alike. US consumers have also tried unsuccessfully to bring cases against chocolate giants Hershey and Nestlé over child labor in their supply chains, despite the companies having pledged to avoid child labor. read more »