Life Science Compliance Update

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April 21, 2017

Going Back to the Roots of the False Claims Act - Baxter Settles cGMP Allegations

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While False Claims Act cases are relatively common in the life science industry, FCA cases for cGMP violations are not. This article explores the most recent case involving Baxter Healthcare Corporation and some of its troubling implications.

It was the darkest hours of March 1863, and things were not going well for the Union Army. Confederate victories continued to pile up, and President Lincoln had yet to find a leader for the Army of the Potomac who could best Robert E. Lee. To make matters worse, there was a steady stream of reports coming from the front that the Union Army suffered from substandard equipment despite the mighty industrial advantage the North possessed. Wartime profiteering was at an all-time high.

A frustrated President and Congress decided to act, and on March 12, 1863, President Lincoln signed the False Claim Act (“FCA”) into law. At the heart of the new law was the concept of using rogues to catch the parasites by allowing private individuals to sue on behalf of the Government and then to share in the recovery.

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