Archive for January, 2011

Fire in the Hole – Cephalon Cited for Inappropriate Marketing, Use of Fire-Eaters as Entertainment

Friday, January 28th, 2011

Cephalon was recently given a rebuke by the Association of British Pharmaceutical Industry (“ABPI”) for providing “inappropriate hospitality” to thirteen healthcare professionals during a convention in Lisbon, Portugal in 2009.  The ABPI reacted to an anonymous complaint filed by a perturbed Cephalon employee, who witnessed the company’s largesse in marketing its fentanyl products.

The ABPI was moved to admonish Cephalon thanks, in part, to an official feedback document distributed to Cephalon employees, and which included commentary like “took them clubbing” and “we then went to a few bars and to a club until 3am – a few good photos to prove it!!!”  The ABPI also uncovered evidence that Cephalon employees had marketed a fentanyl product known as Effentora, prior to receiving the authorization to do so. 

Ultimately, the ABPI concluded that Cephalon’s conduct amounted to a “general party atmosphere” and a breach of appropriate standards that threatened to bring discredit to the industry overall.  The ABPI report noted that bar bills from the event ran quite high, and the company even furnished live entertainment, including fire-eaters, for the healthcare professionals being wooed by Cephalon.

 For more information see:  http://www.pharmalot.com/2011/01/cephalon-goes-clubbing-and-pays-for-fire-eaters/

Glaxo Doubles Down on Avandia

Friday, January 28th, 2011

Last week, pharmaceutical manufacturer GlaxoSmithKline announced that it would take a $3.4 billion charge to cover the legal fallout from investigations into its controversial Avandia diabetes pill.  In total, Glaxo has taken over $6 billion in charges to cover ongoing legal problems related to Avandia, which was banned in Europe last fall. 

 The drug has been under intense scrutiny since 2007, when a published analysis revealed a link between Avandia and an increased risk of heart attacks.  The $3.4 billion charge recognized by Glaxo – sufficient to wipe out all of the company’s earnings for the fourth quarter of 2010 – is intended to cover in excess of 13,000 products liability lawsuits as well as an investigation by the United States Attorney’s Office in Denver, Colorado into Glaxo’s sales and marketing practices of Avandia.  The charge greatly exceeds Avandia’s sales, which amounted to $1.2 billion last year and which have been in decline since the drug’s potentially deadly side effects    were made public.

 For more information see:  http://www.pharmalot.com/2011/01/now-glaxo-takes-a-34-billion-charge-for-avandia/

Return to Sender? $32 Million Postal Service Sponsorship Could Serve as Measure of Damages in Floyd Landis’s False Claims Act Suit

Friday, January 28th, 2011

 Last week, ESPN reported, based on documents uncovered through a Freedom of Information Act (“FOIA”) request, that Tailwind Sports, a San Francisco-based sports management company, was paid nearly $32 million between 2001 and 2004 to run Lance Armstrong’s United States Postal Service (“USPS”) cycling team.  The figure is significant to the False Claims Act suit filed by former Armstrong teammate Floyd Landis, which alleges that Tailwind lied to the USPS regarding the cycling team’s systematic use of performance-enhancing drugs.  Under the False Claims Act, a finding of liability carries with it an award of treble damages, meaning that Landis’s suit could result in nearly $100 million in damages for Tailwind, Armstrong (who became a co-owner of the company shortly after it was established), and Tailwind’s founder, financier Thom Weisel.

Landis essentially alleges that Tailwind engaged in a fundamental form of financial fraud – misrepresenting the truth to the USPS in order to obtain money.  If Landis can prove that Tailwind attempted to hide pervasive doping on the cycling team in order to receive $32 million for running and managing the team, “the company may very well have exposure under the False Claims Act,” said Paul Scott, a former Department of Justice trial attorney who now specializes in False Claims Act litigation.

Armstrong, of course, has steadfastly denied the use of performance-enhancing drugs.  Landis is currently awaiting the government’s decision as to whether it will intervene and take the lead in pursuing the claims against Tailwind, Armstrong and Weisel.

 For more information see:  http://blogs.sfweekly.com/thesnitch/2011/01/usps_paid_sf_lance_armstrong_f.php#

New York Residential Housing Fraud Halted by False Claims Act Suit

Friday, January 28th, 2011

On January 18, 2011, the Young Adult Institute (“YAI”) and five of its current and former officers were ordered to pay $18 million in civil damages to settle a lawsuit brought under the False Claims Act.  YAI is the largest operator of residential facilities and other programs for developmentally disabled individuals in New York State. 

According to federal prosecutors, YAI falsely inflated the costs of certain residential facilities in order to allow the company to obtain additional Medicaid reimbursements to which it was not entitled.  The United States Attorney’s Office also alleged that YAI: (1) improperly shifted the costs of certain employees’ salaries and fringe benefits to residential facilities where the employees did not actually work; (2) improperly categorized unlicensed staff members as clinical social workers; and (3) improperly categorized its fundraising staff as administrative employees, all of which allowed YAI to receive inflated Medicaid payments.

Under the settlement, YAI and its current and former officers will pay $7.2 million to the United States, and $11.8 million to the state of New York.

For more information see:  http://www.courthousenews.com/2011/01/19/33413.htm

Government Recovery of $4 Billion from Federal Health Care Programs

Friday, January 28th, 2011

During the fiscal year 2010, the US government was able to recover more than $4 Billion stolen from federal health care programs such as Medicare and Medicaid.  Due to the fraud-fighting efforts of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) and Medicare Fraud Strike, this money was returned to the Medicare Health Insurance Trust Fund, the Treasury, and other government programs.

President Obama’s vigorous administration isn’t stopping while they’re ahead.  They will continue to combat fraud with the Affordable Care Act which allows them to do less “paying-and-chasing” of the claims.  Additionally, Health and Human Services has announced there are new rules and resources to help stop fraud from occurring.  Visit www.stopmedicarefraud.gov for more information on Obama’s effort to eradicate Medicare fraud.

 For more information please see:  http://blogs.usdoj.gov/blog/archives/1157

Lawsuits Stemmed from the Safety of Bullet Proof Vests

Friday, January 28th, 2011

 N.I. Teijin Shoji Co. Ltd., a fiber importer, agreed to a $1.5 million settlement for False Claims Act allegations. The company imported the fiber, Zylon, which was manufactured by Toyobo Co. Ltd. of Japan. It is alleged that Teijin Shoji was aware that the Zylon degraded quickly over time causing it to be unfit for use in the production of bullet proof vests. Also, Teijin Companies did not inform the US of the potential degradation problems or stop selling the fiber for the vests altogether. Instead, they actively marketed the product and minimized the degradation factor. In addition, Teijin previously purchased Zylon from a Canadian weaver and sold it to American body armor manufacturers. The Canadian weaver refused to sell the fiber for armor purposes for fear of being potentially liable. Teijin is not the only importer who has faced these allegations. The US has previously settled eight other companies for similar allegations in the Zylon body armor industry. To date, the government has received more than $59 million from the other lawsuits. Currently, Toyobo Co. is under investigation by the US government, and part of Teijin Companies settlement agreement requires them to actively cooperate with them.

For more information please see:  http://washingtondc.fbi.gov/dojpressrel/pressrel11/wfo012511.htm

Seven Hospitals in Six States to Pay U.S. More Than $6.3 Million to Resolve False Claims Act Allegations Related to Kyphoplasty

Monday, January 10th, 2011

Seven hospitals in Florida, Mississippi, Texas, South Carolina, North Carolina and Alabama have agreed to pay the United States a total of more than $6.3 million to settle allegations under the False Claims Act. Between 2000 and 2008 these hospitals performed kyphoplasty, a minimally invasive treatment for certain spinal fractures that is often performed on an outpatient basis. The government alleged that these hospitals performed kyphoplasty on an in-patient basis in order to increase their Medicare billings.

For more information, please visit: http://www.justice.gov/opa/pr/2011/January/11-civ-006.html

Qui Tam Litigation in the Western District of Pennsylvania: Open For Business CLE Program

Monday, January 10th, 2011

On Thursday, February 17, 2011, the Allegheny Bar Association’s Federal Court section will be presenting QUI TAM LITIGATION IN THE WESTERN DISTRICT OF PENNSYLVANIA: OPEN FOR BUSINESS.  Honored speakers and panelists at this wonderful event include United States Attorney David Hickton, The Honorable Nora Barry Fischer, AUSA Michael Comber, Tom Farrell, Tina Miller, Harry Litman, and our very own Marc Raspanti.  Please see the following registration flyer.  We hope to see you there.

To register: https://www.acbaservices.com/clereg1.lrx