Pharma Fraud

October 3, 2017

Michigan physician Abdul Haq pleaded guilty to conspiracy to commit health care fraud for his role in an approximately $19 million Medicare fraud scheme involving three Detroit area providers.  Haq admitted he conspired with the owner of the Tri-County Network and others to prescribe medically unnecessary controlled substances, including Oxycodone, Hydrocodone and Opana, to Medicare beneficiaries, many of whom were addicted to narcotics. DOJ

September 22, 2017

Aegerion Pharmaceuticals Inc., the Massachusetts-based subsidiary of Novelion Therapeutics Inc., agreed to plead guilty to charges relating to its prescription drug Juxtapid.  Specifically, Aegerion introduced Juxtapid into interstate commerce that was misbranded because, among other things, Aegerion failed to comply with a Risk Evaluation and Mitigation Strategy.  Aegerion agreed to pay more than $35 million to resolve criminal and civil liability arising out of violations of the False Claims Act and Federal Food, Drug, and Cosmetic Act.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Aegerion former employees Michele Clarke, Tricia Mullins, and Kristi Winge.  They will receive a whistleblower award of $4.7 million from the proceeds of the government's recovery. DOJ

September 20, 2017

Miami physician Roberto A. Fernandez was sentenced to 97 months in prison and to pay $4.8 million in restitution for his role in a $4.8 million health care fraud scheme that involved the submission of false and fraudulent claims to Medicare and the illegal prescribing of controlled substances, including oxycodone and hydrocodone. DOJ

September 8, 2017

Galena Biopharma Inc. agreed to pay more than $7.55 million to resolve allegations it violated the False Claims Act by paying kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral.  These included providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors thousands of dollars to attend an “advisory board,” and paying roughly $92,000 to a physician-owned pharmacy under a performance-based rebate agreement.  Two of the doctors who received remuneration from Galena were convicted and later sentenced to prison.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Lynne Dougherty.  She will receive a whistleblower award of more than $1.2 million from the proceeds of the government's recovery. DOJ

September 5, 2017

Novo Nordisk Inc. agreed to pay $58.65 million to settle charges it violated the False Claims Act and Food, Drug, and Cosmetic Act by failing to comply with the FDA-mandated Risk Evaluation and Mitigation Strategy (REMS) for its Type II diabetes medication Victoza.  The New Jersey based pharmaceutical manufacturer is a subsidiary of Denmark’s Novo Nordisk A/S.  At the time of Victoza’s FDA approval in 2010, the FDA required a REMS to mitigate the potential risk in humans of a rare form of cancer called Medullary Thyroid Carcinoma (MTC) associated with the drug. Under the REMS, Novo Nordisk was required to disclose to physicians the potential risk. If it failed to comply with these disclosure requirements, including requirements to communicate accurate risk information, the drug would be considered misbranded under the law.  According to the government, Novo Nordisk failed to comply with the REMS requirements, providing information to physicians that created the false or misleading impression that the Victoza REMS-required message was erroneous, irrelevant, or unimportant.  The allegations originated in several whistleblower lawsuits filed under the qui tam provisions of the False Claims Act. The whistleblowers who brought these actions will receive a yet-to-be-determined whistleblower award from the proceeds of the government’s recovery. Whistleblower Insider

August 23, 2017

US Bioservices Corp. agreed to pay $13.4 million to settle charges it violated the False Claims Act and Anti-Kickback Statute by participating in a kickback scheme with Novartis Pharmaceuticals Corp. relating to the Novartis drug Exjade.  Specifically, the government alleges US Bio was promised additional patient referrals and related benefits in return for refilling a higher percentage of Exjade than the two other pharmacies that also dispensed Exjade.  DOJ (SDNY)

August 17, 2017

Pharmaceutical companies Mylan Inc. and Mylan Specialty L.P. agreed to pay $465 million to settle charges they violated the False Claims Act by purposely misclassifying EpiPen as a generic drug to avoid paying higher Medicaid rebates.  Under the Medicaid Drug Rebate Program, state Medicaid programs are entitled to larger rebates for brand-name drugs compared to generics.  According to the government, Mylan circumvented this program and its purpose by erroneously reporting EpiPen as a generic drug to Medicaid so it could demand massive price increases in the private market while avoiding its corresponding rebate obligations to Medicaid.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by competing pharmaceutical manufacturer Sanofi-Aventis US.  Sanofi will receive a whistleblower award of roughly $38.7 million from the proceeds of the government’s recovery. Whistleblower Insider

November 17th, 2017

New York announced the indictment of Hin T. Wong ("Wong"), 49, of Manhattan, Mery Gooden, 58, of the Bronx, and three pharmacies. The indictment charges Wong, the owner of three Manhattan pharmacies – New York Pharmacy Inc. ("NY Pharmacy"), NYC Pharmacy Inc. ("NYC Pharmacy"), and New York Healthfirst Pharmacy Inc. ("NY Healthfirst") – for defrauding several government-funded healthcare programs, including Medicaid and Medicare, by falsely billing prescription refills and stealing over $3 million in reimbursement for medication they did not dispense. Wong was indicted for Grand Larceny in the First Degree, a class "B" felony, and other crimes. In addition, Mery Gooden, a pharmacist at NYC Pharmacy, was indicted for Grand Larceny in the Second Degree and other related crimes. NY