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Pharma Fraud

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How Whistleblowers Can Report Fraud Related to Clinical Trials

Posted  09/4/20
Microscope
The COVID-19 pandemic has highlighted the importance of government-funded scientific and medical research, including clinical trials of vaccines, treatments, and more.  We are all potentially at risk if there is fraud and abuse in clinical trials and other research. Individuals with knowledge of fraud and misconduct in federal grants and clinical trials may be able to bring a whistleblower action for that research...

August 24, 2020

Following a whistleblower suit by a former sales representative, DUSA Pharmaceuticals (DUSA), a Massachusetts-based subsidiary of Sun Pharmaceuticals Industries Inc. (Sun Pharma), has agreed to pay $20.75 million to resolve allegations of defrauding Medicare and the Federal Employee Health Benefit Pr­­­ogram.  According to relator Aaron Chung, senior management at DUSA and Sun Pharma allegedly encouraged doctors, via paid speaker programs and discussions, to use shorter incubation periods of 1-3 hours for Levulan Kerastick, a topical prescription medication for treating actinic keratosis (AK) of the face and scalp that had FDA-approved instructions for 14-18 hour incubation periods.  As expected, the significantly reduced incubation periods resulted in significantly reduced AK clearance rates, yet DUSA failed to inform doctors of the lower rates and even actively misinformed them that AK clearance rates were the same regardless of incubation period.  For exposing the fraudulent conduct, Chung will receive approximately $3.5 million of the settlement proceeds.  DOJ; USAO WDWA

August 13, 2020

Advanced Care Scripts, Inc. (ACS) has agreed to pay $3.5 million to resolve allegations of conspiring with Teva Neuroscience, Inc. (Teva) to pay kickbacks to Medicare beneficiaries in order to induce purchases of Teva’s multiple sclerosis drug, Copaxone.  The kickbacks came in the form of effectively covering beneficiaries’ co-pays through correlated payments to the Chronic Disease Foundation (CDF) and The Assistance Fund (TAF).  USAO MA

New Settlement Shows the Power of Whistleblowers to Root out Fraud against Private Insurers

Posted  08/6/20
whistle hanging against a chalkboard
The nation’s biggest insurers, Medicare, Medicaid, and TRICARE already incentivize whistleblowers to report fraud. Because those programs are federally-funded, a whistleblower can bring suit under the False Claims Act and share in 15-30% of the recovery. The FCA is a law that allows private individuals alleging fraud against the government to bring a lawsuit in the name of the United States. The law leads to about...

Catch of the Week: Indivior Agrees to Pay $600 Million to Settle Opioid Fraud Case

Posted  07/31/20
pill container spilled over with pills in the form of a dollar sign
The latest in our Catch of the Week series features Indivior Solutions’ (“Indivior”) agreement to pay $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone. This is in addition to the $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (“RB Group”) that was previously announced in 2019. Suboxone is a...

July 28, 2020

A pharmaceutical company accused of paying illegal inducements to physicians has agreed to pay $3.5 million to resolve allegations of violating the False Claims Act.  In order to induce physicians to prescribe its newly-launched local analgesic, EXPAREL, Pacira Pharmaceuticals Inc. allegedly paid doctors kickbacks that were half-heartedly disguised as grant money for research.  In order to receive the so-called research grant, Pacira required EXPAREL to be placed on formulary at the physician’s institution, but did not document why such research was needed or follow up on research results.  The fraud was eventually exposed by a pharmacist in a qui tam suit; the pharmacist will receive $638,000 as part of the settlement.  USAO NJ; AG FL

July 24, 2020

Several divisions of pharmaceutical company Indivior, which marketed of the opioid-addiction drug Suboxone, pleaded guilty to felony healthcare fraud, entered into a five-year Corporate Integrity Agreement, and will pay a total of $600 million in criminal fines, restitution, civil damages, and penalties.  In six separate cases brought by whistleblowers, Indivior was also alleged to have caused false claims to be submitted to government healthcare programs including by promoting the sale of Suboxone to physicians who were prescribing it outside of medically accepted indication, misrepresenting the likelihood of Suboxone being diverted, and taking steps to delay generic competition for Suboxone. Indivior admitted making false statements about the safety of the film version of Suboxone in order to promote its sale.  In addition, the FTC claimed that violated antitrust laws through a deceptive scheme to thwart lower priced generic competition with Suboxone.  The total settlement consists of criminal restitution of $289 million; a civil settlement of $300 million, with $209.3 million paid to resolve claims by the federal government and $90.7 million to participating states; and, $10 million in penalties to the Federal Trade Commission.  The settlement also requires Indivior to take steps including the dissolution of its Suboxone sales force. Indivior was until 2014 a subsidiary of Reckitt Benckiser Group PLC, which previously paid $1.4 billion to resolve claims related to Suboxone marketing.  DOJ; USAO NJ; FTC

Newly Unsealed Whistleblower Lawsuit Alleges Drug Giant McKesson Gave Doctors Illegal Kickbacks in the Form of Free Software

Posted  07/24/20
Close-up of McKesson logo on computer screen
Constantine Cannon LLP is pleased to announce the unsealing of a whistleblower lawsuit its client brought alleging that drug wholesaler McKesson Corp. and its affiliated companies provided illegal kickbacks in the form of free business services to encourage oncologists and other doctors to buy drugs from McKesson. The lawsuit alleges that McKesson gave doctors valuable business-management tools geared towards...

July 23, 2020

Two pharmacists who were co-owners of Advantage Pharmacy in Mississippi have been sentenced to over 12 years in prison each and ordered to pay between $9 million and $29 million in civil monetary judgment, and between $185 million and $189 million in restitution for committing healthcare fraud.  According to the press release, Glenn Doyle Beach and Hope Thomley marketed, dispensed, and distributed compounded medications without regard to medical necessity, causing various health benefit programs, including TRICARE, to pay over $200 million in reimbursements.  Thomley’s husband, Randy Thomley, has been sentenced to 8 years in prison and ordered to pay judgment and restitution of $3.6 million each for his role in helping to recruit TRICARE beneficiaries.  USAO SDMS

July 2, 2020

Alexion Pharmaceuticals, Inc. will pay $21 million to resolve SEC charges that it violated the Foreign Corrupt Practices Act.  Alexion subsidiaries in Turkey and Russia were alleged to have made payments to foreign officials in those countries in order to secure favorable regulatory treatment for Alexion’s drug Soliris, and to increase the number of prescriptions for the drug.  The Turkish and Russian subsidiaries, as well as Alexion subsidiaries in Brazil and Colombia, falsified their books and records with respect to improper payments, and Alexion’s internal accounting controls were not adequate to detect or prevent the improper payments and accounting.  SEC
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