January 25, 2016

December 22, 2015

Coloplast Corp., a manufacturer of ostomy and continence care products, and Liberator Medical Supply, Inc., a medical products supplier, agreed to pay $3,160,000 and $500,000, respectively, to resolve allegations that Coloplast paid unlawful kickbacks to several medical suppliers, including Liberator, to induce them to conduct promotional campaigns designed to refer individual users to Coloplast products.  In addition to Liberator, the government alleged Coloplast also paid kickbacks to Byram Healthcare Centers, Inc.; CCS Medical, Inc.; Liberty Medical, Inc.; and Handi Medical, Inc. in return for marketing promotions and conversion campaigns.  The government alleged that in the case of Byram, Liberty, and Handi, Coloplast’s promotional campaigns allegedly included kickbacks in the form of funding for cash incentives – sometimes known as “spiffs” – paid to the suppliers’ sales personnel to induce them to refer patients to Coloplast products.  In other instances, Coloplast allegedly gave rebates or price concessions as inducements for the promotional campaigns.  The allegations first arose in a whistleblower lawsuit filed by two former employees and one current employee of Coloplast under the qui tam provisions of the False Claims Act.  They will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. DOJ (DMA)

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