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 . . .
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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 . . .
Court Rejects Pfizer’s Attempt to Gut HHS-OIG Guidance on Co-Pay Assistance
In a 32-page decision issued late yesterday, Southern District of New York Judge Mary Kay Vyskocil granted summary judgment for the government in a case where pharmaceutical giant Pfizer challenged an HHS-OIG Advisory Opinion finding that Pfizer could violate the anti-kickback statute (AKS) if it went ahead with a proposal to provide co-pay assistance for . . .
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United States Indicts Spinal Device Company and Two of Its Executives for Paying Kickbacks to Spine Surgeons
On September 7, 2021, the U.S. Attorney’s Office in Boston announced a grand jury indictment of medical device company SpineFrontier, Inc., and two of its executives, Kingsley Chin and Aditya Humad, for violating the anti-kickback statute by allegedly paying surgeons bogus “consulting” fees to induce the surgeons to use SpineFrontier products in their surgeries. According to the . . .
D.C. Circuit Upholds Application of Overpayment Rule to UnitedHealthcare Medicare Advantage Plan
In a precedential opinion that likely have a significant impact on several large pending cases, the United States Court of Appeals for the D.C. Circuit today upheld application of the so-called Overpayment Rule, 42 C.F.R. § 422.326, to Medicare Advantage organizations. See UnitedHealthcare Insurance Co. v. Becerra, No. 18-5326 (D.C. Cir. Aug. 13, 2021) (“UHC”). Medicare Advantage . . .
Harvard Scientist Agrees to Pay $215,000 to Resolve Allegations that He Made False Statements to Get NIH Grants; Scientist Also Agrees Not to Deny Government’s Allegations
Dr. Sam W. Lee, formerly a Principal Investigator at Harvard Medical School and Massachusetts General Hospital (MGH), has agreed to pay $215,000 to resolve allegations that he submitted false information to get a grant from the National Institutes of Health (NIH) to do research involving “DNA damage response and carcinogenesis.” According to a settlement agreement finalized on . . .