Chemistry

A settlement has been reached to resolve False Claims Act allegations against NI Teijin Shoji Co Ltd, aka NI Teisho of Japan, and an American subsidiary, NI Teijin Shoji (USA) Inc. They are accused of importing and selling defective Zylon fiber which was used as the key ballistic material in bulletproof vests.

This settlement is part of a larger investigation of the body armor industry’s use of Zylon in body armor. The United States previously has settled with eight other participants in the Zylon body armor industry for more than $59 million. 

The Teijin companies imported the fiber on behalf of the Zylon manufacturer, Toyobo Co. Ltd. of Japan. The United States alleged that the Teijin companies were aware that the fiber degraded quickly over time and that this degradation rendered bulletproof vests containing woven Zylon unfit for use. The government further alleged that, despite this knowledge, the Teijin companies did not inform the United States of any degradation concerns or stop selling Zylon fiber for use in ballistic applications. Rather, Teijin personnel actively participated in the marketing of the Zylon fiber and downplayed the extent of the degradation problem. Furthermore, for a period of time in 2002, Teijin purchased Zylon fabric back from the Canadian weaver to whom it had sold the fiber for weaving, and sold it directly to American body armor manufacturers, after the weaver itself refused to sell the Zylon fabric due to its fears of potential liability.

A settlement has been reached in a whistleblower class action lawsuit brought against Dey Inc, Dey Pharma LP (formerly known as Dey, LP) and Dey LP Inc.  They are accused of  engaging in a scheme to report false and inflated prices for numerous pharmaceutical products.

The whistleblowers will receive a share of approximately $67.2 million.

The initial whistleblower complaint against Dey Inc was filed in the Southern District of Florida on August 13, 1997. Eventually the United States interevened in August 2006.  The United States alleged that Dey reported false prices for the following drugs: Albuterol Sulfate, Albuterol MDI, Cromolyn Sodium and Ipratropium Bromide. The difference between the resulting inflated government payments and the actual price paid by health care providers for a drug is referred to as the “spread.”  The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government.  The government alleges that Dey created artificially inflated spreads to market, promote and sell the drugs to existing and potential customers.  Because payment from the Medicare and Medicaid programs was based on the false inflated prices, the government alleged that Dey caused false and fraudulent claims to be submitted to federal health care programs and, as a result, the government paid millions of claims for far greater amounts than it would have if Dey had reported truthful prices.