July 26,2005

Grassley continues effort to have drug companies inform employees about the False Claims Act

July 25, 2005

Dear Mr. ____________ :

In June, the Senate Finance Committee (Committee) convened a two-dayhearing, “Medicaid Waste, Fraud and Abuse: Threatening the Healthcare Safety Net.”During the course of that hearing it was revealed that there are currently approximately150 whistleblower cases involving over 500 different drugs under seal in the Departmentof Justice Civil Division alone. The volume of whistleblower cases coupled with thenumber of settlements already executed suggests not only that fraud in the Medicaidprogram is widespread, but also that the False Claims Act is an important tool forexposing such fraud.

In that regard, I want to thank you for responding to my inquiry and informing methat your company has a comprehensive compliance program that includes an anonymoushotline for employees to report misconduct.

While many of your competitors voluntarily provide basic information aboutwhistleblower rights under the FCA to their employees, I am disappointed that youbelieve providing information to your employees on whistleblower rights under the FCAis not consistent with the goal of preventing unlawful and unethical conduct. Providinginformation about the FCA, including the whistleblower provisions, to employees as partof your ethics and compliance program will go a long way toward preventing the kind ofsystemic fraud discussed in the hearing. It is my hope that a mutually agreeable approachto educating employees about the FCA can be reached and that your company willreconsider its position.

Material requested in this letter should be provided to the Senate Committee onFinance no later than August 15, 2005. Any questions or concerns should be directed toDan Donovan at (202) 224-4515, or Dan_Donovan@finance-rep.senate.gov. Allcorrespondence should be sent electronically in PDF searchable format toThomas_Novelli@finance-rep.senate.gov or via facsimile to (202) 228-2131 and originalby U.S. mail. Thank you in advance for promptly complying with this request.


Charles E. Grassley