Pharma Fraud

May 29, 2019

A doctor in South Carolina has agreed to pay $92,506.30 to settle allegations of accepting illegal payments from OK Compounding, LLC, in exchange for prescribing their pain creams to TRICARE patients.  The False Claims Act violations allegedly occurred between February and May 2013, and involved “medical director fees” paid to Dr. Jerry Back that were in reality, kickbacks.  This was the eighth kickback settlement in the Northern District of Oklahoma since the beginning of the year.  USAO NDOK

May 2, 2019

Insys Therapeutics executives were convicted for their part in a racketeering conspiracy where they defrauded Medicare and private insurance carriers. From May 2012 to December 2015, the defendants bribed medical practitioners to prescribe Subsys, an extremely addictive sublingual fentayl spray intended for use by cancer patients. In furtherance of these efforts, the defendants provided kickbacks to practitioners who increased their Subsys prescriptions. The defendants also defrauded health insurance providers who were hesitant to approve payment for the drug when it was prescribed for non-cancer patients. DOJ

April 30, 2019

Pharma company US WorldMeds LLC has agreed to pay $17.5 million and enter into a corporate integrity agreement to resolve allegations that it improperly induced the use of its drugs Apokyn, used to treat Parkinson's, and Myobloc.  The company was alleged to have improperly used a foundation to pay Apokyn copayments for Medicare beneficiaries, knowing that it was the only donor to the foundation’s Parkinson’s Disease fund and that virtually all of the fund’s donations were spent on Medicare Apokyn patients.  In addition, the company was alleged to have paid kickbacks to physicians, including excessive speaking and consulting fees, to induce them to prescribe Apokyn and Myobloc. The litigation was initiated under the False Claims Act by whistleblowers, who will receive $3.15 million of the settlement.  DOJ; USAO Conn

April 25, 2019

Pharma company Amgen Inc. has agreed to pay $24.75 million and enter into a corporate integrity agreement to resolve allegations that its use of purportedly independent foundations to pay copayments on its drugs Sensipar and Kyprolis for Medicare beneficiaries violated the False Claims Act.  Amgen's "donations" were not bona fide, but were, by design, intended to benefit only patients of its own drugs, thereby constituting an unlawful kickback designed to generate revenue for Amgen.  With respect to Kyprolis, Amgen's donation to the fund was expressly tied to the anticipated amount required to fund Kyprolis copayments.    DOJ; USAO Mass

April 25, 2019

Astellas Pharma US Inc. has agreed to pay $100 million and enter into a corporate integrity agreement to resolve allegations that its use of a purportedly independent foundation to pay copayments on its drug Xtandi for Medicare beneficiaries violated the False Claims Act.  Astellas was alleged to have provided funds to cover copayments for androgen receptor inhibitors (ARIs), although its own drug Xtandi was the only ARI available.  Astellas promoted the existence of the funds as an advantage for Xtandi over competing drugs in an effort to persuade medical providers to prescribe Xtandi. According to the government's allegations, payments to the foundations were not bona fide donations, but instead unlawful kickbacks.   DOJ; USAO Mass

April 4, 2019

Kenneth C. Coleman of Houston, Texas, who owned Acacia Pharma Distributors, Inc. and Four Corners Suppliers, Inc., has been sentenced to 30 years in prison following his conviction at trial for money laundering, tax evasion, and related charges.  Coleman and his companies purchased second-hand prescription medications from various illegitimate sources and sold them to a third party, Green Valley Medical Distributors, LLC, which then sold the medications to pharmacies as if they were brand new.  In arranging the sales, Coleman created fraudulent documents that misrepresented the sources of the medications and their prior sales.  After being paid by Green Valley, Coleman and others would pay the suppliers of the drugs, often in cash, and failed to report income or file corporate income taxes.  Coleman was also ordered to forfeit $20.3 million and pay $717,000 in restitution to the IRS.  DOJ

April 4, 2019

Alexion Pharmaceuticals Inc. will pay $13 million to resolve allegations that the company violated the False Claims Act by providing funds to a purportedly independent patient assistance program for its drug Soliris in a form that created an improper kickback. Soliris, which, at list price and typical dosages, can cost as much as $500,000/year, was unaffordable to many patients.  While Alexion had a free drug program, it referred Medicare patients to a "Complement-Mediated Disease" fund for copayment assistance; Alexion then billed Medicare for the drugs.  Alexion was the sole donor to the fund, and assistance from the fund was contingent on the patient taking Soliris.   DOJ

April 4, 2019

Pharmaceutical company Lundbeck LLC will pay $52.6 million to resolve allegations that the company violated the False Claims Act by providing funds to a purportedly independent patient assistance program for its drug Xenazine, approved for Huntington's Disease, in a form that created an improper kickback. Lundbeck was the sole donor to a fund at a foundation that claimed to provide financial support for patients with Huntington’s Disease. However, Lundbeck also referred Xenazine patients with many other conditions to this foundation, which then paid the Xenazine copays for these off-label uses.  When the foundation determined to stop using its Huntington's fund for non-Huntington's patient, Lundbeck redirected its payments to a different general-purpose fund, with the understanding that fund would use the redirected funds to pay Xenazine copays for these same patients.  Lundbeck is alleged to have denied needy Medicare and ChampVA Xenazine patients access to its free drug program, instead referring them to the patient assistance program, permitting Lundbeck to submit claims to federal healthcare programs.   DOJ