Under the Food, Drug and Cosmetic Act (FDCA), a company in its application to the FDA must specify each intended use of a biological product.  After the FDA approves the product as safe and effective for a specified use, any promotion by the manufacturer for other uses – known as “off-label” uses – renders the product misbranded.  According to the criminal information, Allergan made it a top corporate priority to maximize sales of Botox® for such off-label uses.

The criminal information alleges that Allergan exploited its on-label cervical dystonia (CD) indication to grow off-label pain and headache (HA) sales.  In 2003, Allergan developed the “CD/HA Initiative” as a “rescue strategy” in the event of negative results from its clinical trials to ensure continued expansion into the pain and headache markets.  As part of this initiative, Allergan claimed that cervical dystonia was “underdiagnosed” and that doctors could diagnose cervical dystonia based on headache and pain symptoms, even when the doctor “doesn’t see any cervical dystonia.”

Allergan’s off-label marketing tactics also included calling on doctors who typically treat patients with off-label conditions.  In 2003, Allergan doubled the size of its reimbursement team to assist doctors in obtaining payment for off-label Botox® injections.  Allergan held workshops to teach doctors and their office staffs how to bill for off-label uses, conducted detailed audits of doctors’ billing records to demonstrate how they could make money by injecting Botox®, and operated the Botox® Reimbursement Hotline, which provided a wide array of free on-demand services to doctors for off-label uses.  Allergan also lobbied government health care programs to expand coverage for off-label uses, directed physician workshops and dinners focused on off-label uses, paid doctors to attend “advisory boards” promoting off-label uses, and created a purportedly independent online neurotoxin education organization to stimulate increased use of Botox® for off-label indications.

“The FDA had approved therapeutic uses of Botox for only four rare conditions, yet Allergan made it a top corporate priority to maximize sales of far more lucrative off-label uses that were not approved by FDA,” said Sally Yates, U.S. Attorney for the Northern District of Georgia. 

“The FDA exists to assure that drugs marketed to the American people are safe and effective” said Dr. Margaret Hamburg, Commissioner, Food and Drug Administration. “The ‘off-label’ promotion of drugs threatens public health and the role of the FDA, which has served our country well and has protected Americans from unsafe and ineffective drugs.”

This settlement is part of the government’s emphasis on combating health care fraud.  One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $3.1 billion since January 2009 in cases involving fraud against federal health care programs.  The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $4 billion.

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Under its contract with the General Services Administration (“GSA”), Learning Tree sells information technology training courses to the federal government in multi-course packages known as “vouchers” or “passports.” To prevent the United States from paying for training services that are not actually rendered, the contract specifically requires that Learning Tree invoice the government only after services are provided.

The settlement resolves allegations that Learning Tree knowingly invoiced federal agencies in advance for multi-course training packages before employees of the purchasing agencies had attended the full number of courses available under each. The government further alleged that upon expiration of the training packages, Learning Tree retained federal funds that the company received in connection with unused courses without providing a refund or credit. As a result, Learning Tree received federal funds for training courses that were not, in fact, provided.

“Government contractors must deal fairly and honestly with the United States,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “When federal funds are being misused, we will take action to protect the taxpayers.”

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Guidant pleaded guilty to withholding information from the FDA regarding catastrophic failures in three of its devices: the Ventak Prizm 2 DR (Model 1861) and the Contak Renewal (Models H135 and H155). Specifically, Guidant admitted to: (1) making a materially false statement in a required submission to the FDA with regard to the Ventak Prizm 2DR device; and (2) failing to notify the FDA of a “correction” to the Contak Renewal devices, which the company made to reduce a risk to health caused by the devices. As a result of these offenses, the agreement calls for Guidant to pay a combined criminal penalty in excess of $296 million.

“The guilty plea today should serve as a reminder and deterrent to those who would break the laws requiring honesty and cooperation with government regulators whose mission is to protect the health and safety of the public,” said Frank J. Magill, Acting U.S. Attorney in this case for the District of Minnesota . “The health care laws are as important as ever. When medical device and pharmaceutical companies fail to live up to their legal obligations, serious criminal consequences will follow.”

Today’s entry of a guilty plea by Guidant LLC and the proposed resolution would represent the largest criminal penalty ever imposed on a device manufacturer for violating the Food Drug and Cosmetic Act,” said Commissioner of Food and Drugs Margaret A. Hamburg, M.D. “The FDA will continue to commit enforcement resources to seeking this type of criminal resolution and stiff sanctions when device manufacturers fail to adhere to the statutory and regulatory requirements that exist to ensure the safety and efficacy of their products.”

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

“Health care decisions must be based solely upon what is best for the individual patient and not on which pharmaceutical company is paying the doctor the biggest kickback,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland.

The lawsuit was initiated by a whistleblower, Debra Parks, through the qui tam provisions of the False Claims Act, which allows private citizens to expose fraudulent behavior with government money and share in any recovery. Of the $42.5 million recovered in the case, Ms. Parks will receive $5.33 million.

If you are seeing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

On October 30, 2009, the U.S. Department of Justice reported that McAllen Hospitals has agreed to pay $27.5 million to resolve claims that it violated the False Claims Act. Between 1999 and 2006, the Texas-based company, which conducts business as South Texas Health System, induced doctors to refer patients to their hospitals through fraudulent payments disguised as contracts.

Bruce Moilan, a former employee of McAllen Hospitals, will receive $5.5 million from the proceeds of the settlement. Under the False Claims Act, whistleblowers such as Mr. Moilan can bring suits on behalf of the government and are entitled to a share of any settlements.

As part of the agreement, South Texas Health Systems will enter into a 5-year Corporate Integrity Agreement that requires it to establish procedures for tracking and evaluating financial arrangements between its health care facilities and their referral sources. The agreement also requires specific training for South Texas Health System representatives involved with financial arrangements, an independent third-party’s annual review of the health system’s compliance with certain Corporate Integrity Agreement obligations involving financial arrangements, and a report to the Office of Inspector General by the independent third-party reflecting the results of the review.

“Improper financial arrangements like these can increase the cost of health care by shifting provider attention to the quantity of treatments, rather than keeping it focused on the quality of care,” said Department of Health and Human Services Inspector General Daniel R. Levinson. “The CIA is important because it requires South Texas Health System to put systems in place to prevent this conduct from happening in the future.”

The Indiana hospitals include St. Francis Hospital in Beech Grove, Deaconess Hospital in Evansville and St. John’s Hospital System in Anderson. The hospitals have agreed to pay the United States $3,158,629, $2,110,034 and $826,256, respectively.

The Alabama hospitals include St. Vincent’s East Hospital and St. Vincent’s Birmingham Hospital, both located in Birmingham, and Providence Hospital, located in Mobile. These facilities have agreed to pay the United States $1,459,395, $422,748 and $381,713, respectively.

The settlements resolve allegations that, from 2002 to 2008, the six hospitals overcharged Medicare each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as an out-patient surgery, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.

This lawsuit was filed in 2008 in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates under the qui tam or whistleblower provisions of the False Claim Act. Under those provisions, a private party, known as “relator,” can file an action on behalf of the United States and receive a portion of any recovery. Mr. Patrick, of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates is a former regional sales manager for Kyphon in Birmingham, Ala. The relators will receive approximately $1.4 million as their share of the settlement proceeds.

The settlements with these Indiana and Alabama facilities follow the government’s June 2009 settlement with three Minnesota hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure.

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

So far, eight of the 12 states with cases have settled with Eli Lilly on the same terms, with differing monetary values according to state population. These states include West Virginia, Connecticut, Minnesota, Montana, New Mexico, Louisiana, Utah and Idaho. The four states yet to reach agreements are Arkansas, Mississippi, Pennsylvania and South Carolina.

Eli Lilly has already settled consumer protection claims with 33 other states for $62 million, and also agreed to pay $1.4 billion to settle federal civil and criminal claims stemming from the alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that received approximately $362 million, collectively.

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

The investigation was initiated by a lawsuit called a qui tam action filed under the False Claims Act by two whistleblowers. Under the provisions of the False Claims Act, whistleblowers who qualify under the statute are eligible to receive up to 25 percent of the settlement recovery in cases the Government pursues. Under the civil settlement announced today, the whistleblowers will receive a total share of $172,805.

The details of the case are as follows: From October 2001 through September 2005, PGS had a contract with DynMcDermott Petroleum Operations Company (DM) to provide security services at installations that DM operates and manages on behalf of the Department of Energy. Under its contract, PGS was reimbursed for all costs, including costs of providing health insurance to its employees, by the Department of Energy. The Government alleged that, from April 2002 through the end of its contract, PGS improperly billed for costs of health insurance under its parent company’s self-insurance program without first obtaining approval for these costs in accordance with its contract. The Government alleged that, as a result of PGS’s failure to seek approval for its self-insurance healthcare costs, the United States, through its management contractor DM, was overcharged. The settlement resolves PGS’s potential liability under the False Claims Act arising from the United States’ investigation.

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

John wasn’t the lone ranger in speaking truth to power, and getting nailed for it.  David Farber had four children under six years of age.  Mark Westlock ended up without work for years.  Casey Schildhuer dealt with brain cancer to go along with his ordeal.  Together the efforts of one Pennsylvania doctor and  five Pfizer employees exposed the Medicare, Medicaid and Tri-Care fraud relating to drug sales of Lipitor (cholesterol drug), Celebrex and Bextra (anti-inflammatory drugs), Zithromax and Zyvox (antibiotics), Geodon (anti-psychotic), Norvasc (anti-hypertensive), Viagra (erectile dysfunction), Zyrtec (anti-histamine), Lyrica (anti-epileptic), Relpax (anti-migraine) and Depo-Provera (birth control).

The result was the announcement last week of the $2.3 billion healthcare fraud settlement  Pfizer agreed to pay to our federal and state governments.  The day of the announcement, Pfizer’s stock dropped a whopping $ .14 off its $16.24 price.  Pfizer also just announced that it was buying rival drug maker Wyeth for $68 billion.   The press releases I saw never bothered mentioning that Pfizer had paid a $430 million healthcare fraud settlement back in May, 2004.  It was smaller than the February, 2008 $650 million Merck health fraud settlement, and the Bristol Meyers Squib settlement for $515 million in September, 2007, but larger than the AstraZenica settlement for $335 million in June, 2003 and the Bayer Corporation settlement for $257 million in January, 2001.  These are just a sampling of the fraud settlement by the American drug industry.

Our Federal and State False Claims Acts are extremely important to nail these corporate welfare cheaters financially.  Women with little kids around this country are routinely sent to jail for collecting a couple hundred dollars more a month than they should have in welfare fraud.  Will any of these drug executives go to jail?  Extremely unlikely.

And what about all of the American citizens who are over-prescribed these drugs by doctors?  Where is the justice for them?

Remember, please, that President George Bush and the Republican Congress a few years ago made it illegal for our Medicare to negotiate with the drug corporations for better prices.  Opensecrets.org reports that Pfizer spent $13.2 million on politicians since 1990, with 70% of it to Republicans.

This fraud and politician buying is one of the main reasons why we continue to get ruthlessly gouged on drugs, and our health insurance premiums have risen so drastically.  Without a strong public plan, how can anyone realistically think we have a prayer at stopping the rip-offs?

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.