Eli Lilly Settles For Largest Criminal Fine in US History

On January 15, 2009, the Department of Justice reported that Eli Lilly and Company has agreed to plead guilty and pay $1.415 billion to resolve civil and criminal allegations.  The resolution includes a criminal fine of $515 million, the largest criminal fine ever imposed on an individual corporation in a United States criminal prosecution. The pharmaceutical giant will also pay as much as $800 million in a civil settlement with the federal government and multiple states.

Eli Lilly has agreed to the resolution in order to resolve allegations that it promoted its drug, Zyprexa, for uses not approved by the Food and Drug Administration. The Food, Drug, and Cosmetic Act (FDCA) mandates that companies specify the planned uses of a product in its “new drug” application to the FDA. The FDA then determines whether or not the drug is safe and effective for its intended use. After its approval, a drug may not be marketed or promoted for non-specified, or off-label, uses.

Zyprexa, originally approved in 1996 as a treatment for manifestations of psychotic disorders and in 2000 for the short-term treatment of schizophrenia, was promoted by Eli Lilly for unapproved uses included the treatment for dementia, including Alzheimer’s dementia, in elderly people. The information contained in the agreements the Eli Lilly has signed allege that the company knowingly promoted Zyprexa for off-label uses, and trained its sales force to disregard the law. It also claims that Eli Lilly marketed Zyprexa to primary care physicians, despite Zyprexa having virtually no approved use in the primary care market. Through false marketing, Eli Lilly caused false claims for payment to be submitted to Medicaid, TRICARE, and the Federal Employee Health Benefits Program, none of which provide coverage for off-label uses.

“Off-label promotion of pharmaceutical drugs is a serious crime because it undermines the FDA’s role in protecting the American public by determining that a drug is safe and effective for a particular use before it is marketed,” said Gregory G. Katsas, Assistant Attorney General for the Civil Division. “This settlement demonstrates the Department’s ongoing diligence in prosecuting cases involving violations of the Food, Drug, and Cosmetic Act, and recovering taxpayer dollars used to pay for drugs sold as a result of off-label marketing campaigns.”

“The illegal scheme used by Eli Lilly significantly impacted the integrity of TRICARE, the Department of Defense’s healthcare system,” said Ed Bradley, Special Agent-in-Charge, Defense Criminal Investigative Service. “This illegal activity increases patients’ costs, threatens their safety and negatively affects the delivery of healthcare services to the over nine million military members, retirees and their families who rely on this system. Today’s charges and settlement demonstrate the ongoing commitment of the Defense Criminal Investigative Service and its partners in law enforcement to investigate and prosecute those that abuse the government’s healthcare programs at the expense of the taxpayers and patients.”

The global resolution includes the following agreements:

A plea agreement signed by Eli Lilly admitting guilt to the criminal charge of misbranding. Specifically, Eli Lilly admits that between Sept. 1999 and March 31, 2001, the company promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer’s dementia. Eli Lilly has agreed to pay a $515 million criminal fine and to forfeit an additional $100 million in assets.

A civil settlement between Eli Lilly, the United States and various States, in which Eli Lilly will pay up to $800 million to the federal government and the states to resolve False Claims Act claims and related state claims by Medicaid and other federal programs and agencies including TRICARE, the Federal Employees Health Benefits Program, Department of Veterans Affairs, Bureau of Prisons and the Public Health Service Entities. The federal government will receive $438,171,544 from the civil settlement. The state Medicaid programs and the District of Columbia will share up to $361,828,456 of the civil settlement, depending on the number of states that participate in the settlement.

The qui tam relators will receive $78,870,877 from the federal share of the settlement amount.

A Corporate Integrity Agreement (CIA) between Eli Lilly and the Office of Inspector General of the Department of Health and Human Services. The five-year CIA requires, among other things, that a Board of Directors committee annually review the company’s compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that Eli Lilly send doctors a letter notifying them about the global settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging. Eli Lilly is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of the CIA and subject to monetary penalties for less significant breaches.

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.

Dental Management Company Preyed On Vulnerable Children; Will Return $24 Million To Taxpayers

The United States announced on January 20, 2010, the settlement of False Claims Act allegations against FORBA Holdings LLC, a dental management company that provides business management and administrative services to 69 clinics nationwide known as “Small Smiles Centers.”

Under the agreement, FORBA will pay the United States and participating states $24 million, plus interest, to resolve allegations that it caused bills to be submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid, which is funded jointly by the federal and state governments. These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.

FORBA has further agreed to put in place various remedial measures designed to prevent similar unlawful conduct from occurring in the future. The government’s investigation of individual dentists is ongoing, and FORBA is cooperating with that investigation by providing information about dentists who may have violated professional standards.

“We will not tolerate Medicaid providers who prey on vulnerable children and seek unjust enrichment at taxpayers’ expense,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “This settlement reaffirms our commitment to protect the health and well-being of Medicaid beneficiaries and to ensure the integrity of this essential health care program.”

The government’s investigation was initiated by three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery. As part of today’s resolution, the three whistleblowers will receive payments totaling more than $2.4 million from the federal share of the settlement.

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.

Oklahoma Hospital To Pay $13 Million To Resolve False Claims Act Allegations

On December 22, 2009, the Department of Justice released the settlement of a False Claims Act case involving St. John Health System of Tulsa, Oklahoma. The health provider has agreed to pay the United States $13,229,348.88 to settle allegations that it submitted false claims to Medicare and Medicaid.

Specifically, the United States determined that St. John made payments to 23 individual physicians or physician groups to induce referrals for medical services. Federal law prohibits healthcare providers from billing federal health care programs for referrals from doctors with whom they have a financial relationship, unless that relationship falls within certain exceptions.

St. John’s fraudulent financial relationships were disclosed in a report filed by the health provider to the Department of Health and Human Service’s Office of Inspector General. The report suggested that the agreements with physicians may have violated federal law.

“The resolution of this matter yielded a substantial recovery for taxpayers, and it underscores our commitment to ensure that services reimbursable by federal health care programs are based on the best interests of patients rather than the personal financial interests of referring physicians,” said Tony West, Assistant Attorney General for the Department’s Civil Division.

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.

Three Health Agencies Sued For Using Unqualified ‘Home Health Aides’

On December 17, 2009, the office of the New York Attorney General announced a $24 million settlement to a False Claims Act lawsuit involving three home health agencies. The agencies utilized hundreds of “home health aides” with little or no required training. These aides were sent to the homes of New York’s elderly, frail and indigent to provide sensitive medical care they were not qualified to administer. As a result, Medicaid was billed millions of dollars for illegitimate services.

Under the terms of the settlement, B&H Health Care Services, Inc., known as Nursing Personnel Home Care, Excellent Home Care Services, LLC, and Extended Nursing Personnel CHHA, LLC, will return $23,963,100 to Medicaid–a program jointly funded by the state and federal governments. Of this amount, the State of New York will receive a total of $14,377,860.

The settlements were initiated by lawsuits filed under the whistleblower provisions of the False Claims Act, which allow private citizens to file suit on behalf of the United States for fraud and share in any recovery. Maurice Keshner will receive approximately $1,693,343 from New York’s recovery from Nursing Personnel. Deborah Yannicelli will receive approximately $994,080 from New York’s recovery from Extended and Excellent. The Act also provides protection against job retaliation for whistleblowing.

Medicaid requires home health aides – who primarily care for elderly patients, administer medication, and provide services such as catheter care, colostomy care and wound care – to successfully complete a training program licensed by the Department of Health or the State Education Department. All such aides must receive a minimum of 75 hours of training, including sixteen hours of supervised practical training conducted by a registered nurse.
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.

Next Page »