Qui tam is a philosophy of law in the U.S. that allows individuals who “blow the whistle” on fraud against the government to receive all or part of the financial recovery received by the government. Qui tam refers to a civil lawsuit brought by a private individual, the “whistleblower,” against the company or individual who is believed to have engaged in a criminal act involving fraud, in performance of its contract, or otherwise defrauded the government, on behalf of the government. To explore this concept, consider the following qui tam definition.
Definition of Qui Tam
- A legal principle that allows an individual who is not affiliated with the government to file a lawsuit against a federal contractor for defrauding the government, and to collect all or a part of the financial recovery.
Abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur (“he] who sues in this matter for the king as well as for himself.”)
History of Qui Tam in the U.S.
In colonial America, when the new government employed virtually no law enforcement officers, the new Congress embraced and passed the first whistleblower laws. This followed an incident in which two Revolutionary War navy officers, Richard Marven and Samuel Shaw, brought to light certain acts of the Commander in Chief of the Continental Navy, Esek Hopkins, and were retaliated against.
The Continental Congress enacted the first whistleblower protection on July 30, 1778, when it resolved to defend Marven and Shaw, the whistleblowers, against a suit for libel filed by Hopkins. Congress made a formal declaration that it was the duty of “all persons in the service of the United States, as well as all other inhabitants thereof” to inform the proper authorities of “misconduct, frauds or misdemeanors committed by any officers in the service of these states, which may come to their knowledge.”
The False Claims Act
The Civil War in the United States was a time of rampant fraud committed by contractors against the federal government. Complaints were made about unprincipled contractors selling such war supplies as faulty rifles and ammunition, rotten rations, and even sick and feeble mules and horses. In 1863, two years prior to the end of the Civil War, Congress passed the False Claims Act in response to the epidemic of swindling.
In an effort to encourage people to report, or to file lawsuits against, such contractors, the False Claims Act included a qui tam provision permitting citizens to not only sue on behalf of the federal government, but to be paid a percentage of the amount recovered. It was in this Act, passed during the years of Lincoln’s presidency, that individuals reporting this type of fraud were labeled “whistleblowers.”
In modern times, many qui tam lawsuits filed under the False Claims Act originate with people who have insider knowledge of fraudulent acts. These include healthcare billing, military equipment contracts, and other government spending programs.
Qui Tam Case Against AstraZeneca
In September 2000, the FDA approved an anti-psychotic drug called Seroquel for short-term treatment of schizophrenia. In 2004, the drug was approved for use in bipolar depression. It was during that year that former AstraZeneca sales representative, James Wetta, blew the whistle that the company had been marketing Seroquel for use in children, elderly patients, and prisoners for such off-label uses as anger management and aggression, depression, ADHD, bipolar maintenance, sleeplessness, PTSD, and even Alzheimer’s disease.
Promoting Seroquel for use in unapproved, off-label conditions constitutes fraud when billed to Medicaid or Medicare, as the drug was not approved to be paid for by these government programs, other than for the FDA-approved conditions.
Wetta’s qui tam case triggered an investigation by the U.S. Department of Justice into whether AstraZeneca had violated the Federal Anti-Kickback Statute, and promoted use of the drug in unapproved situations. Two years after Wetta’s report, psychiatrist Stefan Kruszewski filed a qui tam suit, saying AstraZeneca misrepresented the risks and benefits of Seroquel.
AstraZeneca entered into a settlement agreement in which the company paid $520 million to the federal government for the purpose of settling civil lawsuits regarding the drug. James Wetta, as filer of the qui tam lawsuit, received $45 million as his share of the recovery.
Related Legal Terms and Issues
- Civil Lawsuit – A lawsuit brought about in court when one person claims to have suffered a loss due to the actions of another person.
- Defendant – A party against whom a lawsuit has been filed in civil court, or who has been accused of, or charged with, a crime or offense.
- Plaintiff – A person who brings a legal action against another person or entity, such as in a civil lawsuit, or criminal proceedings.
- Settlement Agreement – An agreement settling a dispute between parties to a civil lawsuit.