US-style anti-fraud laws needed for pharmaceutical and health care industry

Lead author Assoc Prof Faunce, from the College of Medicine, Biology and Environment at the Australian National University, said Australia would greatly benefit from US style anti-fraud and anti-competitive laws for the pharmaceutical and health care sector.

“With Australian federal expenditure on health care expected to be over A$70 billion in 2011 there is a significant risk that large amounts will be lost or misused because we lack state of the art systems to detect and recover fraudulent claims,” Prof Faunce said.

”In the US, qui tam provisions — the component of anti-fraud or anti-false claims laws involving payments to private sector whistleblowers of between 15-30 per cent of the triple damages the government recovers, with protections against frivolous claims, — have been particularly successful in providing critical evidence allowing public prosecutors to recover damages for fraud and false claims made by corporations in relation to federal and state health care programs.”

Potential areas of application of such an anti-false claims system could include direct and indirect government expenditure on health care service provision, pharmaceuticals, medical devices, carbon emissions compensation and tobacco-related illness.

As an example, he suggested that the recently announced Tobacco Plain Packaging Bill 2011 (Cwlth) could have included US-style anti-false claims provisions which would facilitate government control over marketing and manufacture of tobacco products.

The Medical Journal of Australia is a publication of the Australian Medical Association.

The statements or opinions that are expressed in the MJA reflect the views of the authors and do not represent the official policy of the AMA unless that is so stated.

CONTACT:     A/P Thomas Faunce                 02 6125 3563(wk) 02 6161 3563 (hm)  0429 438 396