Pfizer Inc. (Pfizer) agreed to pay a record-breaking criminal recovery of $1.3 billion dollars in addition to $1 billion in civil recoveries to settle multiple fraud cases filed by relators under the False Claims Act whistleblower provisions. The whistleblowers alleged that Pfizer caused the submission of false claims to the federal and states governments. Pfizer also entered into a Corporate Integrity Agreement with HHS-OIG. Pfizer did so to settle claims that, among other things, the company misbranded one of its pain killer drugs, promoted the off label use of numerous drugs, and paid kickbacks to doctors to induce or reward the prescription of Pfizer drugs.
As part of the settlement, Pfizer subsidiary Pharmacia & Upjohn Company, Inc. (“Pharmacia”) entered a guilty plea to a federal criminal indictment charging that the company “misbranded” the painkiller Bextra (valdecoxib) by promoting the drug for variety of conditions and at dosages other than those for which its use was approved by the Food and Drug Administration. Bextra was withdrawn from the market in 2005 after concerns about its safety profile, especially for cardiovascular risks, in long term users of the drug.
Attorneys Bob Thomas and Suzanne Durrell represented a whistleblower whose claims against Pfizer were settled as part of this record breaking agreement. Our client’s qui tam complaint alleged nationwide misconduct in which Pfizer paid illegal remuneration for speaker programs, mentorships, preceptorships, so-called “journal clubs”, and gifts (including entertainment, cash, travel and meals) to health care professionals to induce them to promote and prescribe several drugs, including Lipitor®, Norvasc®, Viagra®, Zithromax®, and Zyrtec®, in violation of the Medicare and Medicaid Anti-Kickback Act and the False Claims Act. He also alleged that Pfizer had retaliated against him by firing him without good cause after he complained internally about Pfizer’s marketing practices.
A number of other such suits were filed by other whistleblowers. The government was able to substantiate allegations made in a number of the lawsuits and Pfizer agreed to pay the combined $2.3 billion record-breaking criminal and civil recovery of $1.3 billion dollars in addition to $1 billion to settle the civil cases.
Serono, Inc., the Swiss manufacturer of the AIDS treatment drug Serostim®, reached a then record settlement with the Department of Justice and several state Attorneys General, agreeing to pay $704 million and plead guilty to scheming to boost sagging sales by, among other things, offering kickbacks to doctors to write prescriptions. As part of the plea, Serono Laboratories was barred from participating in federal health care programs for five years, paid a criminal fine of $136.9 million, and paid $567 million to resolve its civil liabilities under the False Claims Act. Serono also entered into a Corporate Integrity Agreement with HHS-OIG.
Serostim, which contains the human growth hormone Somatropin, was approved by the U.S. Food and Drug Administration (FDA) in 1996 to treat AIDS wasting, an often-fatal condition involving severe weight loss. At about the time the FDA approved the drug, protease inhibitor drugs came on the market. Those drugs, when used in combinations or “cocktails,” sharply curtailed the AIDS virus in patients, making them less prone to AIDS wasting.
Serono offered doctors free trips to the south of France in return for agreeing to write up to 30 new prescriptions for Serostim, which cost $21,000 for a 12-week treatment regimen. The company also conspired to introduce a new test for AIDS wasting, despite not having FDA approval. The test diagnosed AIDS wasting even in the absence of weight loss, with the United States estimating that 85 percent of the resulting Serostim prescriptions were unnecessary.
International Nephrology Network (INN), a subsidiary of AmerisourceBergen Corporation, paid $15 million to the United States and the States to settle its civil False Claims Act liability in connection with its role in systematically promoting “overfill billing” for the drug Aranesp® with co-defendant Amgen Inc. This settlement was announced on the same day as the record $762 million Amgen settlement (see related Amgen settlement).
As with Amgen, relator and her team of attorneys litigated the case against INN for over two years while the government continued its civil and criminal investigation. During discovery, documents and deposition testimony confirmed that INN, in conspiracy with Amgen, had used overfill to entice physicians to choose Aranesp based on the promise of increased Medicare and Medicaid reimbursement for the overfill. Like Amgen, INN settled on the eve of trial of relator’s case in Boston.
Several co-counsel assisted in this litigation, which was styled as:
WellCare Health Plans (“WellCare”), a leading health management organization that provides or arranges for the provision of managed care services under government-sponsored health care programs, agreed to pay the United States and nine States $137.5 million to resolve its liabilities under the False Claims Act. WellCare also agreed to pay $80 million as part of a Deferred Prosecution Agreement with the United States, entered into a Corporate Integrity Agreement with HHS-OIG, and resolved its potential liabilities to the SEC by entering into a consent judgment and agreeing to pay a civil penalty of $10 million.
WellCare operates a variety of Medicaid and Medicare plans, including prescription drug plans, pursuant to contracts with the federal and state governments. Our whistleblower client alleged that WellCare knowingly violated the law, its contracts, several provisions of the federal and comparable state False Claims Acts, and the Medicare and Medicaid Anti-Kickback Statute. It did so, by:
Elan Corp. agreed to plead guilty to introducing misbranded drugs into interstate commerce, in violation of the federal Food Drug and Cosmetic Act, and pay criminal fines and forfeitures of just over $100 million. Elan also paid $102,890,517 plus interest, in civil damages for violations of the False Claims Act resulting from improper billings to federal and state health insurance programs such as Medicare and Medicaid. The Elan criminal and civil settlements combined exceeded $203 million. Elan also entered into a Corporate Integrity Agreement with the HHS- OIG.
This whistleblower case involved allegations of improper “off-label” marketing and billing of the anti-seizure drug Zonegran®, first by Irish pharmaceutical manufacturer Elan Corporation and then later by Japanese pharmaceutical company Eisai, Inc., which bought the rights to the drug from Elan in 2004. Eisai earlier agreed to pay $11 million in civil damages under the False Claims Act to the federal and state governments for the period of time the off-label marketing continued after it acquired the rights to the drug (see related Eisai settlement).
The relator’s False Claims Act qui tam complaint alleged that the defendant companies marketed Zonegran, which was approved by the U.S. Food and Drug Administration (FDA) only for reducing seizures, for weight loss and mood stabilization as well. The drug was not approved for either of those uses and thus marketing the drug for those indications constituted “off- label” marketing.
The increase in drug prescriptions resulting from this off-label marketing not only caused improper billings to the federal and state governments, but it also undercut the authority of the FDA, which determines the safety and efficacy of drug products and approves (and limits) their uses.
United States, et al. ex rel. Relator v. Elan Corporation, PLC, and Eisai Inc., Civil Action No. 04-11594-RWZ (D. Mass.)
Forest Pharmaceuticals, Inc. (Forest) paid more than $313 million to resolve its criminal and civil liability and entered into a Corporate Integrity Agreement with the HHS-OIG. The settlement included Forest pleading guilty, paying a criminal fine of $150 million, and forfeiting an additional $14 million in assets for charges relating to obstruction of justice, the illegal promotion of Celexa, an anti-depressant drug for use in treating children and adolescents, and the distribution of Levothroid, an unapproved new drug used to treat hypothyroidism. Forest also paid over $149 million to the United States and the states to resolve allegations under the False Claims Act that Forest caused false claims to be submitted to federal health care programs for the drugs Celexa®, Lexapro®, and Levothroid.
In his qui tam complaint, our whistleblower client alleged that Forest Pharmaceuticals, Inc., a subsidiary of New York City-based Forest Laboratories, Inc., and Forest Laboratories, violated federal and state False Claims Acts by engaging in off label marketing of the anti-depressant drugs Celexa and Lexapro for use in children and adolescents, and paying kickbacks to physicians that resulted in illegal billings to federal health care programs.
After a lengthy government investigation and the Department of Justice filing a complaint in intervention in our client’s case, Forest reached an agreement with the Department of Justice and several state Attorneys General to resolve its criminal and civil liabilities for a total of over $313 million.
The relator further alleged that Forest had illegally retaliated against him by firing him after he raised questions about Forest’s illegal behavior. The court ruled that his claim could proceed. See United States ex rel. Gobble et al. v. Forest Labs, et al., 729 F.Supp.2d 446 (D. Mass. 2010).
We were co-counsel with attorneys Marlan Wilbanks and Ty Bridges in this case which was styled as