Blog Archives

GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data

Global health care giant GlaxoSmithKline LLC (GSK) agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices, the Justice Department announced today.   The resolution is the largest health care fraud settlement in U.S. history and the largest payment ever by a drug company.

GSK agreed to plead guilty to a three-count criminal information, including two counts of introducing misbranded drugs, Paxil and Wellbutrin, into interstate commerce and one count of failing to report safety data about the drug Avandia to the Food and Drug Administration (FDA).   Under the terms of the plea agreement, GSK will pay a total of $1 billion, including a criminal fine of $956,814,400 and forfeiture in the amount of $43,185,600.   The criminal plea agreement also includes certain non-monetary compliance commitments and certifications by GSK’s U.S. president and board of directors.   GSK’s guilty plea and sentence is not final until accepted by the U.S. District Court.

GSK will also pay $2 billion to resolve its civil liabilities with the federal government under the False Claims Act, as well as the states.   The civil settlement resolves claims relating to Paxil, Wellbutrin and Avandia, as well as additional drugs, and also resolves pricing fraud allegations.

This resolution marks the culmination of an extensive investigation by special agents from HHS-OIG, FDA and FBI, along with law enforcement partners across the federal government. Moving forward, GSK will be subject to stringent requirements under its corporate integrity agreement with HHS-OIG; this agreement is designed to increase accountability and transparency and prevent future fraud and abuse. Effective law enforcement partnerships and fraud prevention are hallmarks of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaboration to fight fraud.

Click here to view the DOJ press release: http://www.justice.gov/opa/pr/2012/July/12-civ-842.html

Breach of Anti-Kickback Statute Proper Foundation for FCA Claim

A federal court in Massachusetts Sept. 15 allowed a whistleblower lawsuit against Amgen Inc. to continue, finding that pleadings alleging the biotech drug company violated the anti-kickback statute form a proper foundation for filing a False Claims Act lawsuit (United States ex rel. Westmoreland v. Amgen Inc., D. Mass., No. 1:06-cv-10972-WGY, 9/15/11).
The U.S. District Court for the District of Massachusetts denied Amgen’s partial motion for summary judgment against whistleblower Kassie Westmoreland, a former Amgen employee.
Amgen contended that because the Medicare statute does not mention compliance with the anti-kickback law as a precondition of payment, Congress meant to preclude it as a foundation for an FCA claim, the court said.
Further, Amgen argued that the certification of compliance, which all Medicare participants must sign to receive reimbursement, should only affect continued participation in the Medicare program, not FCA liability, the court said.
“Defendants’ argument is effectively a challenge to the validity of the contractual term making compliance with the Anti-Kickback Statute a precondition of [Medicare] payment,” the court said.

Amgen’s Argument an ‘Absurdity.’

Read more here.

Kentucky Physician Settles Overbilling Allegations

CINCINNATI—A Louisville, Ky., physician has paid the government $349,860 to settle a qui tam action alleging Medicare fraud, the Department of Justice announced Sept. 27.
Dr. Steven H. Stern and his practice, Kentuckiana Center for Better Bone and Joint Health, falsely billed Medicare for Infliximab infusions, according to a former KCB employee who filed the whistleblower lawsuit in 2007.
Stern and KCB were accused of splitting vials of the rheumatoid arthritis drug across multiple patients, then billing Medicare as if a whole vial was used for each patient. Overbilling occurred from December 2003 through December 2006, according to the qui tam complaint.
The whistleblower’s share of the settlement is $70,000. In addition to the government payment, the agreement directs Stern to pay $13, 635 for legal fees and expenses incurred by the whistleblower.
Although just announced, a spokeswoman for the U.S. Attorney for the Western District of Kentucky told BNA Sept. 29 that the settlement was paid August 26.
“This case illustrates the importance and value of whistleblower lawsuits under the False Claims Act,” U.S. Attorney David J. Hale said. “Because this employee stepped forward to report suspected double-billing of Medicare, we have been able to stop a practice that we believe was costing taxpayers hundreds of thousands of dollars.”

Federal Jury Awards Walgreens Pharmacist $1.2 Million in Medicare Billing Fraud Case

A federal jury in California Aug. 19 awarded a fired Walgreens pharmacist more than $1.2 million—mostly in punitive damages—after finding that his complaints the pharmacy chain was engaged in fraudulent Medicare billing practices were a “motivating factor” in his termination (Mitri v. Walgreen Co. Inc., E.D. Cal., No. 1:10-cv-538-AWI-SKO, damage award 8/19/11).
The jury, in two separate phases, awarded Sami Mitri, who began working as a pharmacist for Walgreen Co. in the Fresno, Calif., area in 1996, past and future economic losses totaling $88,000, and punitive damages of $1.16 million.
The panel also answered affirmatively that his complaints regarding the billing practices constituted a motivating factor in the company’s decision to terminate him, and decided that Walgreens would not have fired Mitri if the company had not considered those billing fraud complaints.
The jury also found that the company’s conduct constituted “malice, oppression or fraud,” and that the conduct was committed by one or more officers, directors, or managing agents of the pharmacy chain.
Read more here.

J&J Says Agreement Reached in Criminal Risperdal Promotion Case

Johnson & Johnson said in an Aug. 9 securities filing that it has reached an agreement with the government on resolving criminal charges related to the promotion of the antipsychotic drug Risperdal.
In a 10-Q filing with securities regulators, the company said that discussions “have been ongoing in an effort to resolve criminal penalties under the Food Drug and Cosmetic Act related to the promotion” of Risperdal (risperidone).
The company said an agreement in principle “on key issues relevant to a disposition of criminal charges pursuant to a single misdemeanor violation” of the food and drug law has been reached, but “certain issues remain open before a settlement can be finalized.”
Read more here.

Connecticut Hospital Settles Charges of Overbilling Medicare for Prostate Drug

A Connecticut hospital said Aug. 10 it has entered into a civil settlement agreement with the federal government under which it will pay $516,527 to resolve allegations that it improperly charged Medicare for patient injections of the drug Lupron.
Federal prosecutors allege that St. Francis Hospital and Medical Center in Hartford improperly billed Medicare in violation of the False Claims Act for injections of leuprolide acetate, known by the brand name Lupron or Lupron Depot. The Department of Justice also announced the settlement Aug. 10.
Read more here.

DOJ Intervenes in Suit Over Clinic’s Alleged Improper Billing for Sleep Disorder Tests

TAMPA, Fla.—The Department of Justice June 14 announced it has intervened in a whistleblower lawsuit alleging a Florida sleep clinic violated the False Claims Act by billing Medicare and TRICARE for tests performed by uncertified technicians
In an intervenor’s complaint filed in Tampa in U.S. District Court for the Middle District of Florida, the government named as defendants Bay Area Sleep Associates LLC, which operates as SomnoMedics LLC, and its owner, Edward Killmer Jr.
The defendants operate 10 sleep laboratories throughout central Florida, the complaint noted.
The qui tam case alleges the defendants violated the False Claims Act by hiring unlicensed technicians to perform sleep tests, knowing that Medicare reimbursement regulations required diagnostic testing services at independent diagnostic testing facilities such as SomnoMedics be performed by a technician licensed or certified by a state or national credentialing body, DOJ said in a statement.
Read more here.

Prosecutors See Case Shift From Pharma To Devices, Park Doctrine Cases Coming

Prosecutors told a conference audience June 7 that U.S. enforcement trends show a shifting from pharmaceutical drugs to biologics, biotechnology, and medical devices and that the Food and Drug Administration and the Department of Justice are actively pursuing cases involving the individual liability of executives.
Read more here.

Alleged Kickbacks for Using Medical Devices Set Stage for FCA Suit Against Manufacturer

Blackstone Medical Inc., the maker of devices used in spinal surgeries, is not entitled to dismissal of a former employee’s whistleblower suit alleging that kickbacks the company paid to doctors for using its products resulted in fraudulent Medicare claims in violation of the False Claims Act, the U.S. Court of Appeals for the First Circuit determined June 1 (United States ex rel. Hutcheson v. Blackstone Medical Inc., 1st Cir., No. 10-1505, 6/1/11).
Read more here.

Maker of Epilepsy Drug Pleads Guilty In Off-Label Case, Resolves FCA Charges

The U.S. subsidiary of Belgian pharmaceutical manufacturer UCB SA has pleaded guilty to the off-label promotion of its epilepsy drug Keppra and will pay more than $34 million to resolve criminal and civil liability, the Department of Justice said June 9 (United States v. UCB Inc., D.D.C., No. 1:11-375-RMU, guilty plea 6/9/11).
Read more here.
Page 13 of 14« First...1011121314