Recently, two rulings have killed a litigation-funding model that allowed litigation funders to profit from whistleblower suits against the U.S. government, according to an opinion piece in Reuters.
Last week, the 5th U.S. Circuit Court of Appeals affirmed the dismissal of two False Claims Act suits, against the drugmakers Bayer Corp and Eli Lilly & Co Inc, by subsidiaries of the National Healthcare Analysis Group. The NHAG is a so-called professional whistleblower that the U.S. Justice Department described in 2019 as a “shell company” controlled by “investors and former Wall Street investment bankers.”
“The Justice Department made no secret of its disdain for the concept of investors profiting from suits filed in the name of the government,” the column reads in part. “A DOJ dismissal brief in one of the Texas cases that later went to the 5th Circuit homed in on the NHAG’s recruitment of informants, accusing the company of using “false pretenses” to obtain information from medical professionals who were led to believe they were responding to queries from a health care research company, not a professional FCA plaintiff. Ultimately, the DOJ told judges in 11 NHAG cases, the suits were no more than “cloned complaints” filed by pseudonymous shell companies backed by Wall Street financiers.”