United States v. GlaxoSmithKline
United States v. GlaxoSmithKline was a case before the United States District Court for the Eastern District of Pennsylvania. Robert J. Merena was one of the first who filed claims against SmithKline Beecham Clinical Laboratories on November 12, 1993. The complaints alleged that GlaxoSmithKline, which operated a system of clinical laboratories, adopted myriad complicated procedures for the purpose of defrauding state and federal healthcare programs, in particular Medicare and Medicaid. The U.S. Justice Department publicly praised Robert Merena for his "cooperation and support" in helping the government collect the largest settlement ever involving a whistle-blower lawsuit. The SmithKline settlement is considered to be one of the largest whistleblower assisted recoveries in the history of the United States. Background In 1992, the United States began to suspect that SmithKline Beecham Clinical Laboratories and several other medical laboratories in the United States had adopted a scheme that allowed them to bill the federal government for unauthorized and unnecessary laboratory tests. The laboratories had "bundled" a standard grouping of blood tests with some additional tests and had then marketed this grouping to doctors by leading them to believe that the additional tests would not increase costs to Medicare and other government-sponsored health programs. After the ordering of tests, the laboratories "unbundled" the additional tests from the standard grouping for purposes of billing. In many cases, treating physicians had made no determination that the additional tests were medically necessary for the diagnosis or treatment of patients; rather the physicians had preferred to order the tests solely because they were sold as a package with other tests that they had deemed necessary. As a result, the laboratories submitted bills-and received payment-for tests that were medically unnecessary. The scheme later became popular as automated chemistry and attracted national attention in December 1992 when one of the contractors that had engaged in the practice, National Health Laboratories, settled a lawsuit brought under the False Claims Act for $111 million. Due to these allegations public started taking interest because the media reported that the government had issued comprehensive subpoenas to GlaxoSmithKline and other laboratories. In November 1993, relator Robert Marena, an SKB employee, filed a qui tam action against GlaxoSmithKline in the United States District Court for the Eastern District of Pennsylvania. His complaint contained eight separate claims under the False Claims Act. Merena's complaint alleged that SKB had defrauded the government by, inter alia, billing for tests that were not performed, double billing, paying illegal kickbacks to health care professionals, and adding tests to "automated chemistry" profiles and then separately billing for those tests. After a month, relator Glenn Grossenbacher, an attorney, filed a second qui tam action against GlaxoSmithKline in the United States District Court for the Western District of Texas. Relators Kevin Spear, Jack Dowden, and the Berkeley Community Law Center (collectively, "the Spear relators") followed in February 1995 with a suit in the Northern District of California. The courts in Texas and California transferred these actions to the Eastern District of Pennsylvania for consolidation