Archive for December, 2012

Grainger To Pay $70 Million To Resolve False Claims Act Allegations

Thursday, December 27th, 2012

Illinois-based hardware distributor, W.W. Grainger Inc., has agreed to pay $70 million to the United States to resolve allegations that it submitted false claims under contracts with the General Services Administration and the U.S. Postal Service.

For more information, please see:
http://www.justice.gov/opa/pr/2012/December/12-civ-1545.html

APTx Vehicle Systems To Pay $2 million To Resolve Procurement Fraud Allegations

Thursday, December 20th, 2012

British Iraq Contractor, APTx Vehicle Systems, agreed to pay $2 million to resolve allegations that it defrauded the U.S. by making false claims in a contract for the procurement of 51 vehicles for the Iraqi Police Authority.  Specifically, APTx falsely submitted shipping documents which indicated that it had produced and was able to ship the 51 vehicles, when in fact none of the vehicles had been built, none were owned by APTx, and none were ready to ship to Iraq.   The settlement arose from a qui tam suit brought by Ian Rycroft, an individual contracted to oversee the transportation of the vehicles. Rycroft’s estate will receive $540,000 as their share of the settlement.   In addition to the civil settlement, APTx will pay a criminal fine of $1 million.

For more information, please see:
http://www.corporatecrimereporter.com/news/200/britcotopleadguilty12102012/

Amgen To Pay $762 Million To Settle Off-Label Marketing Allegations

Thursday, December 20th, 2012

Amgen, one of the world’s largest biotechnology companies, agreed to pay $762 million to resolve criminal and civil allegations that it marketed its drug Aranesp for off-label uses.  Of the $762 million, $612 million will be used to settle a number of whistleblower suits brought under the qui tam provisions of the False Claims Act, with $136 million to be paid in criminal fines, and $14 million forfeited. Amgen’s general counsel, David Scott, entered a guilty plea to a misdemeanor count of misbranding Aranesp, in order to resolve allegations that Amgen promoted the drug to treat anemia in cancer patients who were not receiving chemotherapy.  The FDA only approved Aranesp for patients who were receiving chemotherapy, and a later study sponsored by Amgen showed that the use of Amgen in non-chemotherapy cancer patients increased the patients’ risk of death.  According the federal charges, Amgen sales employees were instructed to engage in “reactive” marketing where they would elicit questions from doctor’s on the off-label use of the drug and then provide studies, which the FDA deemed inadequate, on the efficacy of the off-label use.  Judge Sterling Johnson Jr. has not yet decided if he will accept Amgen’s agreement, but has indicated that he will make this decision soon.

For more information, please see:
www.nytimes.com/2012/12/19/business/amgen-agrees-to-pay-762-million-in-drug-case.html

Sanofi Agrees To Pay $109 Million To Resolve Kickback Allegations

Thursday, December 20th, 2012

Two subsidiaries of France-based drug manufacturer Sanofi, Sanofi-Aventis, Inc. and Sanofi-Aventis, LLC, agreed to pay $109 million to the U.S. to resolve allegations that it violated the federal False Claims Act by providing units of its knee injection, Hyalgan, to physicians for free in order to induce them to buy and prescribe Hyalgan in violation of the Anti-Kickback Statute.  Specifically, Sanofi sales representatives were trained to market the value of the free samples to physicians.  Sales representatives also made illegal kickback arrangements with physicians, in which they would provide a negotiated number of free samples in exchange for a specific purchase volume. Additionally, the settlement resolves allegations that Sanofi violated the False Claims Act by submitting false Average Sales Price (ASP) reports to the U.S. for Hyalgan which failed to account for the free units provided to physicians.   The allegations arose from a qui tam lawsuit filed under the federal False Claims by former sales representative Mark Giddarie.  As his share of the recovery, Giddarie will receive $18.5 million. 

For more information, please see:
www.justice.gov/opa/pr/2012/December/12-civ-1526.html

Pfizer To Pay $98 Million For Off-Label And Deceptive Marketing Of Drugs

Thursday, December 20th, 2012

Pfizer agreed to pay $55 million to the U.S. government for marketing its drug Protonix, approved to treat erosive esophagitis, for unapproved use.  According to the Justice Department, Pfizer promoted Protonix for all forms of gastroesophageal reflux disease even though it is only approved for short-term treatment of erosive esophagitis.  Additionally, the Justice Department alleged that the company used continuing medical education materials to promote the drug for off-label uses.   In a separate settlement, Pfizer also agreed to pay $42.9 million to 33 states to settle allegations that it deceptively marketed its drugs Zyvox and Lyrica.  According to the states, Pfizer marketed Lyrica, which is approved for neuropathic pain treatment, for off-label uses such as chronic back pain and migraines.  Additionally, the states alleged that Pfizer deceptively claimed that its antibiotic drug Zyvox was superior to others, despite a lack of medical evidence. 

For more information, please see:
www.firstwordplus.com/Fws.do?src=corp_site&articleid=C28C22842E2245539247803D3DAE56AD

SEC To Corporations: Get Out Of The Way!

Thursday, December 20th, 2012

In a recent interview with the American Lawyer, Sean McKessey, the SEC’s Office of the Whistleblower chief, warned companies and lawyers to not try to impede or intimidate potential whistleblowers from making tips to the SEC.   Specifically, Mr. McKessey warned that attorneys should not seek to draft policies and agreements which would prevent a company’s employee from reporting alleged fraud to the SEC.  Mr. McKessey plainly stated: If you’re dissuading or prohibiting individuals from reporting to us, you’re violating the rules.”

The SEC received over 3,000 whistleblower tips and awarded its first whistleblower award during the 2012 fiscal year, the first year of the program. 

For more information, please see:
www.jdsupra.com/legalnews/sec-whistleblower-chief-companies-and-t-07795/

$5 Billion Recovered Through False Claims Act In 2012

Wednesday, December 5th, 2012

The Department of Justice announced that it recovered a record $5 billion from companies that defrauded the government through the False Claims Act in 2012, $3.3 billion of which came from cases filed by qui tam whistleblowers.   The government has recovered $13.3 billion under the False Claims Act since 2009, the largest four year total in history.  Of the $5 billion in recovery, approximately $3 billion came from healthcare fraud cases and $1.4 billion from housing and mortgage fraud cases.

For more information, please see:
http://www.justice.gov/opa/pr/2012/December/12-ag-1439.html

Department Of Health & Human Services Expects To Recover $6.9 Billion In Fiscal Year 2012

Tuesday, December 4th, 2012

The Office of Inspector General (OIG) of the Department of Health & Human Services has announced that it expects to recover approximately $6.9 billion in fiscal year 2012.  Of this amount, $923.8 million is attributable to audit receivables and $6 billion to investigative receivables.  OIG also reported that approximately $8.5 billion has been saved as a result of legislative, regulatory or administrative actions which were taken in connection with the agency’s recommendations.  These savings generally relate to monies which are made available for better use through reductions in federal spending.  In addition to monetary recoveries and/or savings, OIG excluded 3,131 individuals and entities from participating in federal programs during the 2012 fiscal year.  778 criminal actions were reported against individuals or entities that engaged in crimes against Health & Human Services programs. 367 civil actions, including false claims and unjust enrichment lawsuits, civil monetary penalties settlements, and administrative recoveries related to provider self-disclosure matters were also reported. 

Other accomplishments made by OIG for fiscal year 2012 include:

– Efforts by the Medicare Fraud Strike Force resulted in charges being filed against 305 individuals or entities, 181 convictions and $151 million in investigative receivables.  The strike force activities involve joint operations by federal, state and local law enforcement agencies and are a key component of the Health Care Fraud Prevention and Enforcement Action Team. 

– A nationwide takedown occurred on May 2, 2012 involving $452 million in false billings – the largest amount of Medicare false billings in a single takedown.  The operation involved more than 200 OIG special agents, forensic examiners and analysts working in  7 cities and resulted in charges against 107 individuals including doctors, nurses, and other licensed medical professionals who were accused of participating in Medicare fraud schemes. 

– GlaxoSmithKline agreed to pay $3 billion to resolve violations relating to its marketing and promotion practices involving several drugs.  The settlements were related to charges that GlaxoSmithKline had promoted several drugs for off label uses; paid kickbacks for the prescription of certain drugs, made false and misleading statements about the safety of certain drugs and violated the requirements of the Medicaid drug rebate program.  In addition to the monetary payment, GlaxoSmithKline entered into a 5 year Corporate Integrity Agreement with OIG.  GlaxoSmithKline entered into separate Medicaid related settlements with a number of states. 

– A report titled Questionable Billing by Community Mental Health Centers indicated approximately half of community mental health centers met or exceeded thresholds in 2010.  This indicated unusually high Medicare billing for at least one of nine questionable billing characteristics related to partial hospitalization programs which are intense, structured outpatient mental health treatment programs.  OIG determined that about 90 percent of the facilities with questionable billings were located in states that did not require community mental health centers to be licensed or certified. 

– OIG reported in Medicaid New York State Medicaid Fraud Control Unit:  2011 Onsite Review that the New York Medicaid Fraud Control Unit filed criminal charges against more than 400 defendants, obtained more than 400 convictions and was awarded more than $750 million between fiscal years 2008 and 2010.  OIG determined that several of the Unit’s practices were worthy of note including its approach to patient abuse and neglect cases, its use of a list of ongoing investigations to avoid conflict among investigating agencies and its use of technology. 

For more information, please see:
https://oig.hhs.gov/newsroom/news-releases/2012/sar-fall.asp