Pharmaceutical Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against ISTA Pharmaceuticals Inc who is accused of conspiring to illegally introduce a misbranded drug, Xibrom, into interstate commerce.

ISTA pled guilty in the Western District of New York to criminal charges that the company conspired to illegally introduce a misbranded drug, Xibrom, into interstate commerce.  Under the Food, Drug and Cosmetic Act (FDCA), it is illegal for a drug company to introduce into interstate commerce any drug that the company intends will be used for uses not approved by the Food and Drug Administration (FDA).  Xibrom is an ophthalmic, nonsteroidal, anti-inflammatory drug that was approved by FDA to treat pain and inflammation following cataract surgery.  In order to expand sales of Xibrom outside of its approved use, ISTA conspired to introduce misbranded Xibrom into interstate commerce.  

Under the terms of the plea agreement, ISTA will pay a total of $18.5 million, including a criminal fine of $16,125,000 for the conspiracy to introduce misbranded Xibrom into interstate commerce, $500,000 for the conspiracy to violate the Anti-Kickback Statute, and $1,850,000 in asset forfeiture associated with the misbranding charge. 

ISTA also entered into a civil settlement agreement under which it agreed to pay $15 million to the federal government and states to resolve claims arising from its marketing of Xibrom, which caused false claims to be submitted to government health care programs.  The civil settlement resolved allegations that ISTA promoted the sale and use of Xibrom for certain uses that were not FDA-approved and not covered by the Federal health care programs, including prevention and treatment of cystoid macular edema, treatment of pain and inflammation associated with non-cataract eye surgery, and treatment of glaucoma.  The United States further alleged that ISTA's violations of the Anti-Kickback Statute resulted in false claims being submitted to federal health care programs.  The federal share of the civil settlement is $14,609,746.16, and the state Medicaid share of the civil settlement is $390,253.84.  Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims. 

The government's allegations stem from two lawsuits filed under the whistleblower provisions of the False Claims Act. The whistleblower will receive approximately $2.5 million of the government's reocvery.

A settlement has been reached in a whistleblower class action lawsuit brought against Genzyme Corp who is accused of marketing, and causing false claims to be submitted to federal and state health care programs for use of, a “slurry” version of its Seprafilm adhesion barrier.

The whistleblowers' share of the settlement has not been determined.

The government's case is based upon the filing of two different whistleblower cases, the first of which was filed in July 2009.  The complaint alleged that Genzyme sales representatives taught doctors and other staff to cut the Seprafilm sheets into small pieces, add saline and allow the pieces to dissolve until the desired consistency was reached.  This mixture was referred to as “slurry.”  Genzyme sales representatives traded recipes for slurry, and trained each other in how to create it.  The slurry was used in laparoscopic or “key hole” surgeries by inserting a catheter filled with the mixture into the body and squirting it into the abdominal cavity.  Seprafilm is FDA-approved for use in open abdominal surgery but not for minimally invasive surgeries, such as laparoscopic or key hole surgery.  Allegedly, as a result of this conduct, Genzyme knowingly caused hospitals and other purchasers of Seprafilm to submit false and fraudulent claims to federal health care programs for uses of Seprafilm that were not reimbursable.

A settlement has been reached in a whistleblower class action lawsuit brought against CareFusion Corp who is accused of paying kickbacks and promoting its products for uses that were not approved by the Food and Drug Administration.

The whistleblower's share in this case is $3.26 million.

The originally filed lawsuit began in September 2010.  The government's case against CareFusion alleged that,  under agreements entered into in 2008 by CareFusion’s predecessor, CareFusion paid $11.6 million in kickbacks to Dr. Charles Denham while Denham served as the co-chair of the Safe Practices Committee at the National Quality Forum.  National Quality Forum is a non-profit organization that reviews, endorses and recommends standardized health care performance measures and practices.  The government contends that the purpose of those payments was to induce Denham to recommend, promote and arrange for the purchase of ChloraPrep by health care providers.  ChloraPrep has been approved by the Food and Drug Administration for the preparation of a patient’s skin prior to surgery or injection. 

The complaint further made claims that, during the period between September 2009 and August 2011, CareFusion knowingly promoted the sale of ChloraPrep for uses that were not approved by the Food and Drug Administration, some of which were not medically accepted indications, and made unsubstantiated representations about the appropriate uses of ChloraPrep.

A settlement has been reached in a whistleblower class action lawsuit brought against AstraZeneca LP and Cephalon Inc who are accused of knowingly underpaing rebates owed under the Medicaid Drug Rebate Program

There are 2 separate settlements with AstraZeneca and Cephalon arising from this case.  They are $46.5 Million and $7.5 Million, respectively.  AstraZeneca will pay the United States roughly $26.7 million, plus interest to the United States. The remainder of those settlements will be paid to the states participating in the settlement. The whistleblower's share of the government's recovery has not been determined.

The whistleblower lawsuit was filed in October 2008.  The complaint alleged that the drug manufacturers underreported Average Manufacturer Prices (AMP) for a number of their drugs by improperly reducing the reported AMPs for service fees they paid to wholesalers.  As a result, the government contends that the companies underpaid quarterly rebates owed to the states and caused the United States to be overcharged for its payments to the states for the Medicaid program. 

This qui tam lawsuit has not concluded and makes similar allegations against other pharmacuetical manufacturers.  The litigation will continue.

A settlement has been reached in a whistleblower class action lawsuit brought against Wyeth Pharmaceuticals Inc who is accused of marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA). Rapamune is an “immunosuppressive” drug that prevents the body’s immune system from rejecting a transplanted organ. Wyeth was acquired by Pfizer Inc in 2009.

The settlement includes a criminal fine and forfeiture totaling $233.5 million.  Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million. 

The resolution also includes civil settlements with the federal government and the states totaling $257.4 million.  Of these amounts, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.    The whistleblowers’ share of the civil settlement has not been resolved.

The government complaint (stemming from the orignally filed whistleblower case in December of 2005) alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs.  These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label.  The government alleged that this conduct resulted in the submission of false claims to government health care programs. 

A settlement has been reached in a whistleblower class action lawsuit brought against Astellas Pharma US Inc who is accused of marketing and promoting the drug Mycamine for pediatric use, which was not a medically accepted indication and, therefore, not covered by federal health care programs. 

As part of the $7.3 million settlement, the federal government will receive $4.2 million, and state Medicaid programs will receive $3.1 million. The whistleblower will receive a $708,852 share of the government's amount.

The complaint was originally filed in March of 2010 and alleged specifically that, between 2005 and 2010, Astellas marketed and promoted the sale of Mycamine for pediatric use.  During this time period, the FDA approved Mycamine to treat adult patients suffering from serious and invasive infections caused by the fungus Candida, including infections in the esophagus, the blood and the abdomen, and to prevent Candida infections in adults undergoing stem cell transplants.  From 2005 through June 2013, however, Mycamine was not approved to treat pediatric patients for any use.      

A settlement has been reached in a whistleblower class action lawsuit brought against McKesson Corporation who is accused of improperly setting temperature monitors used in shipping vaccines under its contract with the Centers for Disease Control and Prevention (CDC).

McKesson Corporation agreed to pay the government $18 million.

Filed in 2012, a complaint was filed on behalf of a whistleblower that was a former employee of McKesson.  The government complaint alleged that, from approximately April 2007 to November 2007, McKesson failed to set the monitors to the appropriate range, and as a result, knowingly submitted false claims to the CDC for shipping and handling services that did not satisfy its contractual obligations.