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Pharma Fraud

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Question of the Week — Should Pharmacy Benefit Managers (PBMs) be allowed to deny patients access to essential life-saving drugs prescribed by their doctor?

Posted  08/19/19
pharmacy pills
As described in a recent article in The Fresno Bee, thousands of patients nation-wide have been denied access to essential life-saving medications by pharmacy benefit managers (PBMs) under the guise of ensuring that patients receive the most appropriate and cost-effective treatment. PBMs are the quintessential “middlemen” in the healthcare system, standing between patients and their physicians on one side, and...

Question of the Week — Will Healthcare Settlements Continue to Dominate False Claims Act Recoveries?

Posted  07/24/19
Recent blockbuster settlements continue past trends: healthcare fraud has so far this year dominated FCA recoveries. During the first half of 2019, the Department of Justice (“DOJ”) secured over $750 million in settlements from False Claims Act (“FCA”) cases. And just past the mid-year point, total recoveries have nearly doubled due to a $700 million civil settlement ($1.4 billion total) entered on July 11th...

Question of the Week — Is DOJ’s Blockbuster $1.4 Billion Opioid Settlement Just the Tip of the Iceberg?

Posted  07/12/19
Pill container spilled over with pills fallen out.
On July 11, DOJ announced a record-breaking $1.4 billion settlement with Reckitt Benckiser Group plc (RB Group) over allegations that its former subsidiary Indivior Inc. inflated prescriptions of its opioid-withdrawal drug Suboxone through numerous unestablished representations about the drug’s safety and addictiveness. The settlement resolves RB Group’s potential civil and criminal liability, but Indivior still...

July 11, 2019

Reckitt Benckiser Group plc, which marketed and sold the opioid addiction treatment drug Suboxone until 2014 through its then-subsidiary Indivior Inc., will pay a total of $1.4 billion in a global settlement resolving criminal, civil, and administrative claims.  In marketing Suboxone Film, Indivior allegedly made unsupported claims that the drug was less-divertable and less-abusable than other buprenorphine drugs, and steered patients to doctors known to have a history of over-prescribing Suboxone and other opioids.  In addition, Indivior was alleged to have discontinued its tablet Suboxone for pretextual reasons, claiming a concern for pediatric exposure when, in fact, the company was seeking to delay FDA approval of a generic form of tablet Suboxone.  In a non-prosecution agreement, RB Group will forfeit $647 million in proceeds it received from Indivior, will cooperate with ongoing investigations, and will not manufacture or market controlled substances in the U.S. for three years.  In resolution of civil claims with the U.S. and states, including six lawsuits filed by whistleblowers under the False Claims Act, RB Group will pay $700 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government healthcare programs.  Finally, RB Group has agreed to pay $50 million in a settlement with the Federal Trade Commission to resolve claims that it engaged in unfair competition in seeking to impede generic equivalents of Suboxone.  DOJ; USAO W.D.Va.; FTC; VA

July 5, 2019

A New York doctor is the latest defendant in a widespread OK Compounding pharmacy fraud scheme to settle with the government.  From 2014 to 2015, Dr. George Lehner allegedly prescribed compounded pain creams for his Medicare patients in exchange for an hourly “medical director fee” by OK Compounding LLC.  To settle the case against him, Lehner will pay about $130,000USAO NDOK

July 2, 2019

For allegedly violating the False Claims Act, mental health nonprofit Wisconsin Community Services, Inc. (WCS) has agreed to pay $537,904 to the United States and the State of Wisconsin.  WCS voluntarily disclosed that one of its pharmacists had billed Medicare and Medicaid for brand name medications over several years, even though generic medications had been dispensed.  USAO EDWI

July 2, 2019

Dean Volkes, the owner and former CEO of Long Island-based reverse pharmaceutical distributor Guaranteed Returns, and Donna Fallon, the former CFO, have been sentenced to five years in prison and one year in prison, respectively, for their roles in the company's theft of customer property.  Guaranteed Returns managed pharmaceutical returns for its customers including hospitals, pharmacies, long-term care facilities, and Dept. of Defense facilities, when those customers sought to return expired or other drugs to manufacturers for a refund; customers paid a fee to Guaranteed Returns for managing this process.  While Guaranteed Returns told customers that it would hold their "indate" (not yet expired) drugs and return them to the manufacturers for refund after they expired, in fact, the individual defendants and the company returned the drugs to manufacturers and kept the full value of the returned products, diverting refunds into company internal accounts.  Evidence at trial established that the company stole more than $100 million from over 13,000 clients.  In addition to their prison sentences, defendants were ordered to forfeit proceeds and pay restitution in excess of $200 million in total.  USAO EDPA

New York Introduces Bills to Expand Whistleblower Protections

Posted  06/21/19
statute of liberty New York symbol
Under current law, whistleblowers who reported fraudulent activity in the government or other settings in the State of New York are typically barred from bringing other legal actions. Maybe not anymore. Last week, both the New York State Senate and Assembly signed off on a series of amendments aimed at providing greater protection for employees who notice and report illegal activity, and expanding the definition of a...

June 5, 2019

Opioid manufacturer Insys Therapeutics will pay $225 million to resolve federal criminal and civil claims against it regarding the unlawful marketing of its drug Subsys, including the payment of kickbacks to providers through sham "speaker programs" that rewarded practitioners who increased their Subsys prescribing, as well as jobs for prescribers' relatives and friends, and lavish meals and entertainment.  $195 million of the settlement will be paid to resolve False Claim Act allegations in five separate whistleblower lawsuits in which the government intervened in 2018; the whistleblower reward shares have not yet been determined.  To resolve the criminal claims, Insys will pay $2 million and forfeit $28 million; its operating subsidiary will plead guilty to wire fraud and related charges.  In addition, Insys entered into a five-year Corporate Integrity Agreement and a five-year deferred prosecution agreement. Previously, five former Insys executives were convicted of racketeering in connection with Subsys marketing.  DOJ; USAO Mass
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