Off-Label and Unapproved Use

December 4, 2018

In connection with fraud involving two medical devices, Covidien and ev3 Inc. have agreed to pay a total of $31 million to resolve allegations of violating the False Claims Act. According to whistleblower and former employee of Covidien, Jeffrey Faatz, sister company ev3 Inc.'s Onyx Liquid Embolic System was only FDA approved for use within the brain, but was allegedly being marketed to surgeons for use outside the brain. Furthermore, ev3 reportedly incentivized its sales representatives to sell the device for unapproved purposes by setting up sales quotas and bonuses, and did so even as FDA officials expressed safety concerns to the company's executives. Separately, Covidien was accused of paying kickbacks to hospitals to induce use of its Solitaire mechanical thrombectomy device, causing false claims to be submitted to Medicare and Medicaid. For blowing the whistle on this case, Faatz will receive a relator's share of $2 million. DOJ; USAO CDCA; USAO SDFL; USAO MA

October 26, 2018

Abbott Laboratories and AbbVie, Inc. have agreed to pay $25 million to settle a case initiated by a whistleblower alleging that the pharma companies paid unlawful kickbacks and engaged in unlawful off-label marketing for the drug TriCor.  The kickbacks took the form of gifts and payments for consulting and speaking engagements that were meant to induce or reward physicians for prescribing TriCor.  The off-label marketing consisted of Abbott's advertising the drug for conditions for which it was not FDA-approved.  The whistleblower, Amy Bergman, a former Abbott sales representative, will receive $6.5 million of the settlement.  USAO E.D.Pa.

October 1, 2018

Pharmaceutical distributor AmerisourceBergen Corporation will pay $625 million to the federal government and 43 states to settle claims that between 2001 and 2014 a pre-filled syringe program at one of its subsidiaries, Medical Initiatives, Inc., violated federal law.  Despite lacking the proper licensing and registration, MII opened FDA-approved sterile vials of oncology drugs, and in a non-sterile environment, pooled the medicine and transfered it into non-FDA approved pre-filled syringes which were then sold to oncology practices and physicians.  This practice allowed Amerisource to capture the "overfill" in the original FDA-approved sterile vials and produce a larger number of pre-filled syringes.  AmerisourceBergen also resolved claims that it provided unlawful kickbacks to physicians to induce them to purchase pre-filled syringes rather than vials.  The settlement resolved three qui tam actions initiated by whistleblowers Michael Mullen, Daniel Sypula, Kelly Hodge, and Omni Healthcare, Inc.; a payment of over $93 million will be made to relators. Previously, in September, 2017, AmerisourceBergen Specialty Group pleaded guilty to illegally distributing misbranded drugs and agreed to pay $260 million in criminal fines and forfeitures. USAO E.D.N.Y.;  NY

August 7, 2018

AstraZeneca, the multinational pharmaceutical giant, has agreed to pay Texas $110 million to settle allegations that the company misleadingly marketed two of its drugs, Crestor and Seroquel, in violation of the Texas Medicaid Fraud Prevention Act. The allegations focused on the company’s off-label marketing in 2010, when it was under a corporate integrity agreement. Former employees of AstraZeneca initiated the case under the whistleblower provisions of the Texas Medicaid Fraud Prevention Act. Texas AG

July 18, 2018

AngioDynamics, a New York-based medical device manufacturer, will pay $12.5M to settle allegations that it caused healthcare providers to submit false claims to Medicare and Medicaid. $11.5M of settlement resolves allegations that the aggressively marketed an unapproved drug delivery device, the LC Bead, with false and misleading statements. The remaining $1M resolved allegations that the company sold a device that was approved to collapse malfunctioning superficial veins to collapse malfunctioning perforator veins, also using false and misleading statements. The LC Bead-related fraud was brought to light by a whistleblower who will receive an award of $2.3M. DOJ

April 23, 2018

Three individuals who fraudulently marketed and sold light-emitting medical devices as a cure-all to consumers were sentenced as follows: Robert “Larry” Lytle, the leader of the scheme, was sentenced to 12 years in prison; Ronald D. Weir Jr. was sentenced to 24 months; and Irina Kossovskaia was sentenced to 15 months. Lytle and his co-conspirators marketed and distributed QLaser devices to mostly elderly consumers by falsely claiming they could safely and effectively treat a panoply of medical conditions at home, including cancer, emphysema, diabetes, autism, HIV, and heart disease. DOJ

February 8, 2018

Dr. Vincent Koh and his wife and office manager Milly Koh agreed to pay $500,000 for violating the False Claims Act by submitting claims to Medicare for unapproved chemotherapy drugs. DOJ (EDNY)