On March 7, 2022, the government announced one of the biggest settlements ever involving the Medicaid Drug Rebate Program: Mallinckrodt, which just emerged from bankruptcy, has agreed to pay $233.7 million over seven years to resolve allegations that it schemed to avoid paying inflationary rebates to the Medicaid program for its drug, Acthar Gel. Mallinckrodt . . .
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$48.5 Million False Claims Act Settlement with Entities that Fraudulently Obtained Set-Aside Contracts Highlights Possibility for Further Whistleblower Action
On February 23, 2022, two United States Attorney’s Offices, in Albany, NY, and Spokane, WA, jointly announced a record $48.5 million False Claims Act settlement with TriMark, a large foodservice equipment supplier, two TriMark subsidiaries, and one of its executives to resolve allegations that they obtained government set-aside contracts under the false auspices of three small businesses . . .
Recent DOJ Settlement Shows Potential for Whistleblower Cases against Health Care Businesses that Employ “Excluded” Individuals
On February 23, 2022, the United States Attorney’s Office in Connecticut announced that it had entered into a $310,874 False Claims Act settlement with a psychiatry practice and its owner for knowingly employing an “excluded” physician as the practice’s clinical director. Although the settlement appears to be the result of an investigation the government initiated itself, the . . .
Brockton Urology Clinic Settles Case and Admits It Took Apparent Kickbacks. What About the Payer of the Kickbacks?
Late yesterday, February 15, 2022, the U.S. Attorney’s Office in Boston announced that Brockton Urology Clinic LLC (Brockton Urology), a physician practice located in North Easton, Massachusetts, agreed to pay $100,000 to resolve False Claims Act allegations that it took money from a hospital to run a clinical program that never existed. Specifically, according to the admitted . . .
DOJ’s $3.8 Million Settlement with Catholic Medical Center Alleges that Provision of Free “Call Coverage Services” Violates Anti-Kickback Statute
On February 9, 2022, the New Hampshire U.S. Attorney’s Office announced that Catholic Medical Center (CMC), a hospital in Manchester, New Hampshire, agreed to pay $3.8 million to resolve allegations that it violated the anti-kickback statute (AKS) and False Claims Act by arranging for a cardiologist to receive “call coverage services at no charge” in exchange for . . .
Cardinal Health’s $13 Million Settlement with DOJ Illustrates Perils of “Upfront Discounts”
Today, the Boston U.S. Attorney’s Office announced that Cardinal Health (Cardinal), one of the nation’s largest drug wholesalers, has agreed to pay $13,125,000 to resolve allegations that its specialty drug distribution unit paid kickbacks to certain medical practices by giving them “upfront discounts” that were not associated with specific sales and thus did not function as discounts . . .
House Report on Drug Pricing Shows Continuing Potential for Whistleblower Suits Involving Patient Assistance Programs
A new Congressional report exposes ongoing abuses by pharmaceutical companies that seek to cover up the effects of high drug prices by financing co-pay foundations. On December 10, 2021, the United States House of Representatives Committee on Oversight and Reform issued a lengthy report on drug pricing. The report includes detailed findings on how “[d]rug companies often . . .
Latest Department of Justice Settlement with Specialty Pharmacies Reflects Ongoing Crackdown on Prior Authorization Fraud and Waiver of Medicare Co-Pays
In its recent settlement with pharmaceutical company kaléo, Inc., the Department of Justice foreshadowed that it also would be pursuing cases against specialty pharmacies that sold and dispensed Evzio, a kaléo drug. Evzio, a naloxone anti-overdose auto-injector, cost over $4000, while Narcan, which was approved for the same purpose, cost only about $150. Thus, insurers, . . .
Pharmaceutical Manufacturer Kaléo Agrees to Pay $12.7 Million to Resolve Allegations that It Paid Kickbacks to Physician Practices and Knowingly Reaped the Benefit of Fraudulent Prior Authorizations Submitted by Specialty Pharmacies
In a first-of-its-kind case, the U.S. Attorney’s Office in Boston announced today that kaléo, Inc., the manufacturer of Evzio, an expensive naloxone drug, has agreed to pay $12.7 million to resolve allegations that, among other things, kaléo encouraged doctors to send Evzio prescriptions to particular pharmacies that then submitted fraudulent prior authorization requests to payers . . .
Medical Device Company Arthrex Pays $16 Million to Resolve Whistleblower Allegations that the Company Paid Kickbacks to a Physician via “Royalty” Payments
On November 8, 2021, the United States Attorney’s Office in Boston announced that Arthrex Inc., a large, privately-held medical device company, agreed to pay $16 million to resolve a False Claims Act qui tam case alleging that Arthrex used the guise of royalties to pay millions of dollars in kickbacks to a prominent Colorado orthopedic surgeon, Peter . . .