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Fish Cases

Allen Jones: Blowing the Whistle on Fraud

Litigation, Commercial Litigation

Fish Cases

Allen Jones: Blowing the Whistle on Fraud

Litigation, Commercial Litigation

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It was a lucrative but illegal marketing scheme perpetrated by a major pharmaceutical company. The targets were the Medicare and Medicaid reimbursement systems. Allen Jones asked us to help him expose it. Little did he know that years later he would become part of the largest Medicaid fraud settlement in the state of Texas and the largest settlement involving a single drug in the history of the False Claims Act.

"The case settled for $158 million, the largest Medicaid fraud settlement in Texas history. "

In-Depth

It was a lucrative but illegal marketing scheme perpetrated by a major pharmaceutical company. The targets were the Medicare and Medicaid reimbursement systems. Allen Jones asked us to help him expose it. Little did he know that years later he would become part of the largest Medicaid fraud settlement in the state of Texas and the largest settlement involving a single drug in the history of the False Claims Act.

Mr. Jones was employed as an investigator for the Pennsylvania Office of Inspector General. In 2002, while investigating suspicious bank accounts and possible misconduct by the State Pharmacist, Mr. Jones discovered that Johnson & Johnson subsidiary, Janssen L.P., had been paying money to state officials for what appeared to be inducements to ensure the promotion of, and reimbursement for, its new antipyschotic drug. The payments uncovered by Mr. Jones included payments to the Director of the Texas Department of Mental Health and Mental Retardation.

In addition to uncovering payments to the Texas mental health director, Mr. Jones determined that J&J’s Janssen was paying for Texas and other state officials to travel around the country promoting something called “Texas Medication Algorithm Project” (TMAP). Mr. Jones contended that the algorithm was influenced by Janssen to ensure preferential treatment for its drug Risperdal, despite the fact that Risperdal was no better and no safer than alternative medications and despite its being substantially more expensive. Mr. Jones also contended that Janssen worked to build revenue by actively and purposefully marketing the powerful antipsychotic drug for use in children, even though the medication was approved only for the very narrow purpose of treating adults schizophrenia.

Mr. Jones pushed hard to a Pennsylvania fraud investigation, only to be told to back off. But he didn’t. His refusal to do so got him removed from the investigation. Frustrated, in January 2004, Mr. Jones took a 60-page report to the New York Times and other media outlets. His findings were soon the subject of national and international media coverage. Mr. Jones paid a price for talking to the press: he was fired.

Mr. Jones hired us to help him bring the allegations to the State of Texas. We filed a qui tam action on behalf of Mr. Jones and the State of Texas and brought the allegations to the federal government. The State of Texas intervened and asked us to co-prosecute the matter, the largest off-label marketing case the state had ever undertaken.

The case was complex, legally and factually. It lasted over eight years and involved taking over 150 depositions, dozens of experts, millions of pages of discovery, and novel issues of law and policy.

The Texas case settled in January 2012, during the first week of trial, for $158 million, the largest Medicaid fraud settlement in Texas history. The record-breaking case also was the subject of extensive news coverage in a variety of U.S. and international media outlets. Subsequently, Mr. Jones’ federal claim was resolved and he became part of the largest settlement involving a single drug in the history of the federal False Claims Act.