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

Posted  July 24, 2020

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 maximizing profits for doctors and McKesson.  One of McKesson’s tools, called the “Margin Analyzer,” allegedly encouraged doctors to buy from McKesson and administer to patients the one drug, among a group of therapeutically equivalent alternatives, that would be most profitable for the doctor.

For example, for a chemotherapy patient needing drugs that would mitigate the harmful effects of the chemo regimen, the lawsuit alleges that the “Margin Analyzer” recommended that a doctor prescribe Fusilev instead of Leucovorin, a drug McKesson identified as a therapeutically equivalent alternative.  The “Margin Analyzer” showed that a doctor could earn $43 per dose of Fusilev, but only $6 per dose of Leucovorin.  While the “Margin Analyzer’s” recommendation allegedly was a “win-win” for both McKesson and the doctor, taxpayers lost out: The cost to Medicare for the more expensive drug, Fusilev, was $1,233 per dose, while Leucovorin cost Medicare only $66 per dose, when the lawsuit was filed.

The Anti-Kickback Statute prohibits the provision of any “thing of value” to induce referrals or prescriptions, and the provision of free software can be an unlawful kickback even though there is no cash payment.  The lawsuit alleges McKesson’s Margin Analyzer, provided to doctors at no charge, caused doctors to submit false claims to publicly funded healthcare programs, including Medicare, Medicaid, and TRICARE, in violation of the Anti-Kickback Statute, the federal False Claims Act, and the False Claims Acts of several states.

Constantine Cannon lawyers Mary Inman and Ari Yampolsky filed the qui tam lawsuit in February 2015 on behalf of the whistleblower, a former McKesson business development executive.  The whistleblower and his attorneys will litigate the case against McKesson with co-counsel at Kellogg Hansen and Phillips & Cohen.

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Tagged in: Anti-Kickback and Stark, CC Lawyers, FCA Federal, Pharma Fraud, Whistleblower Case,