The United States alleges that J&J paid kickbacks to Omnicare to induce the nursing home pharmacy company to purchase and recommend J&J drugs, including the anti-psychotic drug Risperdal, for use in nursing homes. According to the complaint, J&J understood that Omnicare’s pharmacists reviewed nursing home patients’ charts at least monthly and made recommendations to physicians on what drugs should be prescribed for those patients. The government further alleges that J&J knew that physicians accepted the Omnicare pharmacists’ recommendations more than 80 percent of the time, and that J&J viewed such pharmacists as an “extension of [J&J's] sales force.”

The United States alleges that, in order to induce Omnicare and its pharmacists to recommend J&J drugs, the company paid kickbacks to Omnicare in numerous ways. First, the complaint alleges that J&J entered into agreements with Omnicare by which Omnicare was entitled to increasing levels of rebates from Johnson & Johnson so long as Omnicare implemented specific programs to increase the prescriptions of J&J drugs. Second, the complaint alleges that J&J paid Omnicare millions of dollars for “data,” much of which Omnicare never provided. According to the complaint, the true purpose of these payments was to induce Omnicare to recommend J&J drugs. Third, the complaint alleges that J&J made various other substantial kickback payments to Omnicare, calling the payments “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend J&J drugs, according to the release.

For the full release, go to: http://www.justice.gov/opa/pr/2010/January/10-civ-042.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

South Texas Health System, a McAllen, Texas-based hospital group, has agreed to pay the United States $27.5 million to settle claims that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute between 1999 and 2006. The hospital group, owned by Pennsylvania-based Universal Health Services Inc., allegedly paid illegal compensation to doctors in order to induce them to refer patients to hospitals within the group, the U.S. Department of Justice (DOJ) announced October 30, 2009.

The settlement involved allegations that the defendants had entered into financial relationships with several doctors in McAllen in order to induce them to refer patients to the defendants’ hospitals. The government alleged that these payments were disguised through a series of sham contracts, including medical directorships and lease agreements.

The settlement resolves allegations raised against both the parent and the subsidiary in a qui tam or whistleblower lawsuit, according to the DOJ.

For the full press release, go to: http://www.justice.gov/opa/pr/2009/October/09-civ-1175.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA

To review the draft guidance, go to: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064809f1ed1.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

To review the draft guidance, go to: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064809f1ed1.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

According to the FBI’s press release, the allegations are that all the defendants participated in an illegal, off-label marketing scheme to promote medical devices used during invasive surgeries. In particular, the defendants are alleged to have promoted devices used to stimulate bone growth in long bones and the spine, which have highly restrictive FDA approval, for off-label, more widespread uses.

For the full press release, go to: http://boston.fbi.gov/dojpressrel/pressrel09/bs102809.htm.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

By agreeing to participate in the Medicaid Rebate Program and signing these rebate agreements, the four companies agreed to pay quarterly rebates to Medicaid that were based upon the amount of money that health care program paid for each company’s drugs. The precise amount of a rebate is determined in part by whether a drug is considered an “innovator” drug or a “non-innovator” drug. The rebate that must be paid for innovator drugs is higher than the rebate for non-innovator drugs.

Each of the companies agreed to pay a settlement to resolve allegations that it had sold innovator drugs that were manufactured by other companies and had classified those drugs as non-innovator drugs for Medicaid rebate purposes. As a result of the improper classification of these drugs, the companies underpaid their rebate obligations under the Medicaid Rebate Program. The drugs include Mylan’s nifedipine extended release tablets, UDL’s Selegiline HCL, AstraZeneca’s Albuterol, Ortho McNeil’s Dermatop and others.

For the full release, go to: http://www.usdoj.gov/opa/pr/2009/October/09-civ-1120.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

According to GAO’s summary of the report, the government agency found tens of thousands of Medicaid beneficiaries and providers involved in potential fraudulent purchases of controlled substances, abusive purchases of controlled substances, or both through the Medicaid program. The report looked specifically at California, Illinois, New York, North Carolina, and Texas.

Key findings include:

• About 65,000 Medicaid beneficiaries in the five selected states acquired the same type of controlled substances from six or more different medical practitioners during fiscal years 2006 and 2007 with the majority of beneficiaries visiting from 6 to 10 medical practitioners. Such activities, known as doctor shopping, resulted in about $63 million in Medicaid payments and do not include medical costs (e.g., office visits) related to getting the prescriptions.
• Medicaid paid over $2 million in controlled substance prescriptions during fiscal years 2006 and 2007 that were written or filled by 65 medical practitioners and pharmacies barred, excluded, or both from federal health care programs, including Medicaid, for such offenses as illegally selling controlled substances.
• Pharmacies filled controlled substance prescriptions of over 1,800 beneficiaries who were dead at that time.

For the full report and GAO recommendations, go to http://www.gao.gov/new.items/d09957.pdf.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

Pharmacia & Upjohn Company has agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns.

In addition, Pfizer has agreed to pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs – Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug – and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs. The civil settlement also resolves allegations that Pfizer paid kickbacks to healthcare providers to induce them to prescribe these, as well as other, drugs.

Additional whistleblower lawsuits filed under the qui tam provisions of the False Claims Act are pending, according to a September 2 press release by the United States Department of Justice.

For the full press release, go to: http://www.usdoj.gov/opa/pr/2009/September/09-aag-900.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

Between October 2002 to June 2006, prosecutors “allege the pharmacy billed Missouri and Illinois Medicaid for more drugs than it purchased, charged for brand name medicine when it dispensed generic, and billed without proper medical authorization,” according to the Chicago Tribune article.

For the full article, go to: http://www.chicagotribune.com/news/chi-ap-mo-medicaidfraud,0,6683688.story.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.

While Mylan has not publically acknowledged serious problems at its generic drug manufacturing facility, the Pittsburgh Post-Gazette has obtained internal reports alleging that employees at the Morgantown, W. Va. plant have violated government-mandated quality control procedures. According to the Post-Gazette, “… workers were routinely overriding computer-generated warnings about potential problems with medications… .”

Current Good Manufacturing Violations may render pharmaceuticals to be adulterated and may also be the basis of False Claims Act violations. In particular, falsification in CGMP record-keeping may be false records or statements that cause false claims for such adulterated pharmaceuticals to be submitted to Government payors.

Mylan is the world’s third largest generic drug company and the plant in Morgantown produces about 19 billion doses of medicine each year to treat diabetes, hypertension, depression, cancer, epilepsy and other conditions, according to the article.

It is unclear whether the multiple and serious FDA violations in the report resulted in tainted medications.

For the full article, go to: http://www.post-gazette.com/pg/09207/986516-28.stm.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.