Pharma Fraud

December 11, 2018

Target Corp. will pay $3 million to settle allegations that it improperly billed and received payments from the state’s Medicaid program (MassHealth). Between August 2009 and July 2015, at their Massachusetts locations, Target allowed auto-refills on prescriptions that were not clearly requested by a MassHealth patient or caregiver at the time of refill. The investigation arose from a qui tam action by an unnamed whistleblower in the United States District Court for the District of Minnesota. Mass AG  

December 6, 2018

Actelion Pharmaceuticals US, Inc., will pay $360 million to settle claims that it violated the False Claims Act by means of illegally using a foundation as a channel through which it paid the copays of thousands of Medicare patients who were taking Actelion’s pulmonary arterial hypertension drugs to induce patients to purchase the medications. Actelion collected data from the foundation on its spending for patients and used this information to calculate its donations to the foundation, ensuring that its contributions were adequate to cover the copays of patients taking the subject drugs. The company continued these practices despite allegedly receiving warnings from the foundation.   DOJ  

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 22, 2018

A Kentucky-based medical equipment supplier has agreed to pay $5,254,912 to settle claims based on the False Claims Act that it defrauded many government insurers, including Kentucky Medicaid, Medicare, and CHAMPVA (under the Department of Veterans Affairs), by submitting fraudulent claims relating to certain compounded creams that it produced. According to the DOJ press release, in order to be properly reimbursed, Cooley Medical Equipment, Inc. was required to obtain prior authorization from Kentucky Medicaid and CHAMPVA before using certain powdered ingredients. Instead, Cooley claimed to use cream-based versions of the same ingredients, then submitted thousands of false claims to the insurers, and received millions of dollars in reimbursements. The company eventually came clean and self-disclosed to the US Attorney's Office, allowing it to pay a fine of 1.5 times instead of the usual 3 times loss suffered by the government. USAO EDKY

October 9, 2018

A Florida-based pharmacy owner has plead guilty to defrauding Medicare of $8.4 million. In order to generate income for his pharmacy, Valles Pharmacy Discount, Antonio Perez Jr. allegedly paid kickbacks to Medicare beneficiaries and submitted claims on their behalf for medically unnecessary prescriptions that were not purchased by the pharmacy or provided to the beneficiaries. DOJ

October 5, 2018

Partner Gordon Schnell was quoted in the Law360 article, Outside Whistleblowers Key To $625M Amerisource FCA Deal.  Click here to read the article.

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