Life sciences companies unprepared for whistleblower lawsuits, survey finds

Although health care and life sciences companies are aware that they could be hit with federal “whistleblower” law suits, they are ill-prepared for them and any potential consequences, says a national US survey sponsored by law firm Foley Hoag LLP.

The report Life Sciences Legal Forecast: 2014 Compliance Issues Keeping Executives Up at Night found that the False Claims Act allows private citizen whistleblowers to file law suits against companies suspected of filing false claims for funds and property under government contracts, or programs such as Medicare in the USA.

One in four companies lack internal compliance policies that would help prevent such law suits and perform damage limitation when they do occur. An absence of this kind of procedure contrasts with the answers that respondents gave to other questions which showed they had a sound grasp of the False Claims Act’s whistleblower provisions. Respondents’ chief concern was damage to the company’s reputation from these claims.