Implementing US-Style Anti-Fraud Laws in the Australian Pharmaceutical and Health Care Industries
Medical Journal of Australia, Vol. 194, No. 9, pp. 474-478, 2011
5 Pages Posted: 2 May 2011
Date Written: November 27, 2010
This article critically analyses the prospects for introducing United States anti-fraud (or anti-false claims) laws in the Australian health care setting.
Australian governments spend billions of dollars each year on medicines and health care. A recent report estimates that the money lost to corporate fraud in Australia is growing at an annual rate of 7%, but that only a third of the losses are currently being detected.
In the US, the component of anti-fraud or anti-false claims laws involving payments to whistleblowers (known as qui tam provisions) has 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.
The US continues to strengthen such anti-fraud measures and to successfully apply them to a widening range of areas involving large public investment.
Australia, however, still suffers from the absence of any comprehensive scheme that not only allows triple damages recovery for fraud on the public purse, but crucially supports such actions by providing financial encouragement for whistleblowing corporate ‘insiders’ to expose evidence of fraud. Potential areas of application could include direct and indirect government expenditure on health care service provision, pharmaceuticals, medical devices, defence, carbon emissions compensation and tobacco-related illness.
The creation in Australia of an equivalent to US False Claims legislation should be a policy priority, particularly in a period of financial stringency.
Keywords: False Claims Act, Qui Tam, Health Policy, Pharmaceutical Industry, Tobacco Industry, Medical Device Industry, Corporate Fraud
JEL Classification: M14, L44, L43, L41, L40, L33, K42, K41, K32, K34, K21, K22, K14, I18
Suggested Citation: Suggested Citation