Nolan & Auerbach, P.A. announces another successful whistleblower recovery by their courageous clients, whose cases continue to return hundreds of millions of dollars to the US Treasury for America’s healthcare programs. Two weeks ago, the firm represented two of the whistleblowers in a $600 million overall settlement with Allergan, Inc. This latest settlement marks the unsealing of its client’s case against pharmaceutical manufacturer Forest Laboratories, Inc., and its subsidiary Forest Pharmaceuticals, Inc., which have agreed to pay $42.5 million to resolve allegations that they illegally sold the drug Levothroid, even though the FDA had never proven the drug to be safe or effective at that time. These companies are the latest to settle allegations raised in a multi-defendant lawsuit, claiming that several drug companies have illegally marketed and sold unapproved drugs to Medicaid providers. This settlement also settles two other qui tam actions, which, in total, resulted in the $149 million recovery. In addition, Forest has agreed to pay a $150 million criminal fine, to forego $14 million in disputed payments and to plead guilty to a misdemeanor charge of introducing this misbranded drug into interstate commerce.
This is the third settlement this year by Nolan & Auerbach, P.A. involving unapproved drugs. Under the federal Food, Drug & Cosmetic Act, 21 U.S.C. § 301 et seq., every drug must be approved by the FDA for safety and effectiveness before it can be marketed to the public. However, the FDA acknowledged that there are thousands of unapproved drugs illegally on the market, posing serious health risks to patients, particularly Medicaid recipients, many of whom are elderly or disabled, and who have extensive healthcare needs.
The whistleblowers alleged that from August 2001 through December 2005, Forest repeatedly misrepresented to CMS that its drug Levothroid met the definition of a Covered Outpatient Drug. Forest made these false representations or omissions after the FDA had announced that all oral levothyroxine sodium products, including Levothroid, needed to obtain proper FDA approval for safety and efficacy.
According to the whistleblower lawsuit, Forest nearly doubled its illegal sales of Levothroid after the FDA required the phased-down distribution of all unapproved oral levothryoxine sodium products, including Levothroid. All the while, Forest submitted quarterly reports to CMS, falsely stating that Levothroid qualified as a Covered Outpatient Drug.