December 16, 2016

DOJ Catch of The Week — Forest Labs

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to New York City-based Forest Laboratories LLC.  Yesterday, the drug company and its subsidiary Forest Pharmaceuticals Inc. agreed to pay $38 million to resolve allegations they violated the False Claims Act and Anti-Kickback Statute by paying kickbacks to induce physicians to prescribe the drugs Bystolic, Savella and Namenda.  See DOJ Press Release.

According to the government, Forest provided payments and meals to certain physicians in connection with speaker programs about the drugs as improper inducements to prescribe them.  As evidence of this improper purpose, the government claimed Forest provided these benefits even when the programs were cancelled (when there was no reason for the cancellation), when no licensed health care professionals attended the programs, when the same attendees had attended multiple programs over a short period of time, and when the meals associated with the programs exceeded Forest’s internal cost limitations.  The Anti-Kickback Statute prohibits these kinds of payments designed to induce referrals of items or services covered by federal health care programs.

In announcing the settlement, the government stressed the harm to medical decision making that can result from illegal kickbacks.  DOJ Civil Chief Benjamin Mizer highlighted how “[k]ickkback schemes undermine the integrity of medical decisions and increase the costs of health care for everyone,” and that they “are particularly of concern when they are designed to influence drug prescriptions.”  U.S. Attorney Gregory Haanstad echoed this strong concern: “We are particularly concerned with ensuring that drugs are prescribed based on patients’ needs and not on the personal financial interests of drug manufacturers or prescribing physicians.”

The allegations originated in a whistleblower lawsuit filed by former Forest employee Kurt Kroening under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of approximately $7.8 million from the proceeds of the government’s recovery.

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