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.

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

Our courageous clients alleged that Allergan implemented a sophisticated marketing plan with the purpose of inducing physicians to prescribe Botox® Therapeutic for various off-label uses which were neither FDA-approved nor demonstrated to be safe and effective. According to the complaint, Allergan marketed Botox® Therapeutic as safe and effective for certain off-label uses, such as overactive bladder, adult spasticity, and headaches. The Complaint also alleged that Allergan regularly provided illegal kickbacks to physicians who prescribed Botox® Therapeutic for off-label use.

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

Under this agreement, the proceeds from the settlement will be split between the federal government and various states. The settlement resolves a lawsuit brought by a whistleblower under the qui tam or whistleblower provisions of the False Claims Act, according to a DOJ press release.

For the full press release, go to: http://www.justice.gov/opa/pr/2010/March/10-civ-269.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

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.

The Department of Justice has filed a civil complaint against Forest Laboratories alleging that the pharmaceutical company intentionally concealed a clinical study containing negative results involving the drugs Celexa and Lexapro.  According to the complaint, several top executives at the company did not disclose the results of the study that showed that the drugs were not effective and could even pose risks to children.  In spite of this information, from 2001-2004 the company promoted clinical trials showing the effectiveness of the drugs while concealing the existence of the negative study to anyone including its own medical advisors or sales reps.  Further, the complaint alleges that Forest Laboratories paid pharmaceutical kickbacks including paying for vacations and other benefits to physicians to promote the drugs’ use by physicians.

Celexa and Lexapro are popular antidepressants approved by the FDA only for adults.  They are two versions of the same drug, Citalopram. Lexapro is Forest Labs’ blockbuster drug with sales of $2.8 billion in 2008.The company however actively improperly marketed these drugs for children even though in 2008 they sought approval from the FDA to use the drug to treat depression in adolescents.  While antidepressants approved for adults are used by physicians to treat children, Celexa and Lexapro now carry a prominent “black box” warning that these drugs could cause suicidal thinking or behavior in some children.

It appears that the Government has joined a whistleblower lawsuit filed by two former Forest Labs employees.  This follows what has clearly been a long-running federal investigation triggered by the filing of a qui tam lawsuit.

To read more click on http://www.nytimes.com/2009/02/26/business/26drug.html?emc=eta1

or if you think that you have a Medicare Fraud case click on http://www.whistleblowerfirm.com/medicare-fraud/

The government’s investigation of the pharmaceutical fraud began as the result of a whistleblower lawsuit under the False Claims Act by a former sales representative for Orphan. Orphan engaged in a scheme to expand the market for Xyrum by marketing and promoting the drug to physicians for “off-label” use which included using a psychiatrist in promotional speaking engagements. The psychiatrist with the approval of Orphan sales personnel also showed physicians how to obtain reimbursement from Medicare and Medicaid for these unapproved uses. The criminal prosecution arose out of a criminal misbranding scheme by which physicians would write presciptions for Xyrum that were not reimburseable for Medicare and Medicaid.

“Pharmaceuticals manufactured under strict standards can still injure or kill if used for unapproved purposes. Here, the risk was not from willful abuse by users; it was from a concerted campaign by the manufacturer to push a drug for off-label uses. This posed a serious health risk and constitutes a serious crime,” said FBI Assistant Director-in-Charge, New York Field Office, Mark J. Mershon.
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In response to questions from Sen. Charles Grassley (R-IA) on his nomination to be permanent deputy attorney general, McNulty writes that the Justice Department has joined over 150 drug-pricing whistleblower, or qui tam, cases. Dozens of attorneys have been assigned to the cases, most of which are still under investigation. Also, the department is developing databases accessible by government personnel working on the cases.

“Indeed, the Civil Division has hosted two conferences (and is currently planning a third conference) for its attorneys, assistant United States attorneys from around the country, FDA personnel, state representatives and HHS attorneys and investigators to coordinate and move these cases along,” McNulty writes.

Of the $1.4 billion recovered in fiscal year 2005 from False Claims Act settlements and judgments, health care fraud accounted for $1.1 billion, according to the Justice Department.HHS reaped the biggest recoveries, which was largely attributed to its Medicare and Medicaid Programs. The Justice Department has recovered $500 million so far in this fiscal year.

Companies have been settling suits out of court for hundreds of millions of dollars because losing a criminal case against the government would mean being excluded from participating in Medicare. Industry lawyers say federal prosecutors are targeting drug companies primarily because they have lots of money.

Medicare is expensive and most of the money recovered from going after drug companies goes right back into the program. If the government intervenes in a qui tam action, the person who filed the suit can recover between 15 to 25 percent of any settlement or judgment attributable to the fraud identified by the whistleblower, according to the Justice Department. The whistleblower’s share is 30 percent if the government does not intervene. In fiscal year 2005, whistleblowers were awarded $166 million.

However, whistleblowers historically have had little success without the government joining their cases, according to Laurence Freedman of Patton Boggs. Freedman says the government picks the good cases so those it passes over may not be as strong. Even if some passed-over cases do have merit, judges may be predisposed to thinking they are not important because the government is not involved.

Also, health care fraud cases are complex and expensive to litigate, according to James Sheehan, associate U.S. attorney for the Eastern District of Pennsylvania. Federal prosecutors now have a lot of experience with such cases and the government has deep pockets to pay for the expert witnesses who explain such complicated matters as pharmaceutical science and the inner workings of FDA.