Litigation Round-up


BioScrip agreed to pay $15 million to settle a False Claims Act (FCA) suit alleging that it received kickbacks from Novartis Pharmaceuticals related to its distribution of Exjade through its legacy specialty pharmacy operations.  The Department of Justice (DOJ) alleged that Novartis directed BioScrip to increase patient refills on Exjade and, over the next several years as BioScrip increased its Exjade refill levels, Novartis in turn granted it higher rebates for each Exjade shipment and referred a greater percentage of undesignated patients from the Exjade Patient Assistance and Support Services Network.  The government’s investigation of Novartis continues (see “Investigations” below).

The DOJ announced in January that CareFusion agreed to pay $40.1 million to settle allegations that it violated the FCA by paying kickbacks and promoting its products for uses that were not approved by the Food and Drug Administration (FDA).  According to the government, CareFusion paid $11.6 million in kickbacks to the co-chair of the Safe Practices Committee at the National Quality Forum, a non-profit organization that reviews, endorses and recommends standardized health care performance measures and practices, for the purpose of inducing him to recommend, promote and arrange for the purchase of CareFusion’s product ChloraPrep.  This settlement resolves a whistleblower suit filed by a former vice president of regulatory affairs.

Johnson & Johnson subsidiary Janssen Pharmaceuticals agreed last week to pay $5.9 million to Montana’s attorney general to settle allegations that the company promoted its antipsychotic drug Risperdal as safe despite knowing it posed risks of health problems including diabetes.  Of the $5.9 million settlement, approximately $1.5 million will fund a new program in the state to prevent prescription drug abuse and another $1.5 million will fund mental health services and programs in Montana.  Johnson & Johnson and Janssen previously reached a settlement in Nov. 2013 with the DOJ for $2.2 billion to resolve civil and criminal allegations related to Risperdal, among other things.

The DOJ and state of Illinois announced earlier this week that they have reached a $27.6 million settlement with Teva Pharmaceuticals USA Inc. and its subsidiary IVAX to resolve allegations that Teva violated the Anti-Kickback Statute and FCA for paying kickbacks to a Chicago psychiatrist in exchange for prescribing Teva’s antipsychotic drug clozapine.  The kickbacks included speaker honoraria, consulting fees, sporting event tickets, vacations and meals.  The U.S. Attorney for the Northern District of Illinois filed an indictment against the Chicago psychiatrist in Nov. 2012, alleging that he submitted over 190,000 false claims to federal health care programs for clozapine.


In addition to the two complaints filed against Novartis on April 23 and April 26, 2013, including the complaint related to BioScrip discussed in “Settlements” above, the DOJ has filed a third complaint alleging that Novartis paid kickbacks to CVS and other specialty pharmacies to induce them to recommend that patients order Novartis drugs Exjade, Gleevec, Tasigna, TOBI and Myfortic.

A FCA suit against Pfizer was unsealed in January following the DOJ’s decision not to intervene in the whistleblower complaint.  The whistleblower, Health Support Awareness, alleged that Pfizer’s deceptive marketing of Lipitor resulted in false claims submissions to federal health care programs, including a deceptive television marketing campaign that advertised steadily decreasing cholesterol levels and urged consumers with cholesterol levels above those amounts to discuss Lipitor with their doctors.

FCA suit against Celgene was unsealed in February following the DOJ’s decision not to intervene in the whistleblower complaint.  The whistleblower, a former sales representative, alleged that Celgene paid kickbacks to health care professionals in the form of speaker honoraria and other consultant payments and promoted its cancer drugs Thalomid and Revlimid for uses not approved by the FDA.

Medical device company Endo Health Solutions Inc. recently announced in a SEC filing that it has received subpoenas from several states, including California, to investigate its pelvic mesh products.

Additional Resources

For more information about these and other government investigations and settlements related to pharmaceutical, biotechnology and medical device manufacturers, Cooley’s Government Settlements and Government Investigations Trackers may be located by clicking on “Resources” in the upper right corner of the blog or by looking under “Trackers” on the right side of the blog.

Posted by Cooley

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