The Department of Justice (DOJ) announced on December 27, 2012, that a specialty pharmacy, based in San Diego, California, has agreed to pay a $11.4 million settlement. That payment is to resolve allegations that the company used kickbacks to persuade doctors to write prescription for its products. The allegations came from a whistleblower lawsuit filed by a former employee.
Expensive Kickbacks Used on Doctors.
An article in Modern Healthcare states that the specialty pharmacy allegedly used tickets to sporting events, concerts, plays, spa outings, golf games and ski trips to bribe doctors to write prescriptions for its products. The company also had representatives schedule paid “preceptorships,” where the reps would follow doctors in their offices in an attempt to increase prescriptions written for their products.
The specialty pharmacy company agreed to a forfeiture of $1.4 million to resolve the anti-kickback statue allegations. It will also pay $9.9 million to resolve false claims allegations, according to the DOJ. Representatives with the DOJ said that by entering the deferred prosecution agreement the company was able to avoid criminal and civil liability for the kickback and false claims violations.
Whistleblower Gets Reward.
According to the DOJ, the settlement resolves a False Claims Act lawsuit that was filed by a former sales representative for the specialty pharmacy. As part of the resolution, that whistleblower will receive $1.7 million.
Whistleblowers stand to gain substantial amounts, sometimes as much as thirty percent (30%), of the amount the government recovers under the False Claims Act (31 U.S.C. Sect. 3730). Such awards encourage employees and contractors to come forward and report fraud. You can learn more on the False Claims Act on the DOJ website.
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What Do You Think?
What do you think of the settlement agreement? As a health professional are you tempted with kickbacks? Please leave any thoughtful comments below.
Department of Justice. “Victory Pharma Inc. of San Diego Pays $11.4 Million to Resolve Kickback Allegations in Connection with Promotion of Its Drugs.” Department of Justice. (December 27, 2012). From: http://www.justice.gov/opa/pr/2012/December/12-civ-1547.html
Kutscher, Beth. “$11.4 Million Settlement in Pharma Kickback Case.” Modern Healthcare. (December 27, 2012). From: ttp://www.modernhealthcare.com/article/20121227/NEWS/312279957/
About the Authors: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.
George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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