Sunday, September 30, 2007

Medical Implant Device Manufacturers Settle Federal Investigation

Four manufacturers of medical implant devices have reached a $311 million settlement with the federal government to settle allegations of offering kickbacks to surgeons using their products.

The four companies allegedly used consulting agreements with orthopedic surgeons as inducements to use a particular company’s artificial hip and knee reconstruction and replacement products.  Surgeons who had such agreements were typically paid tens to hundreds of thousands of dollars per year, and were also enticed with other perks such as trips.

A fifth company that was implicated in the lawsuit was offered a Non-Prosecution Agreement (NPA) for their voluntary cooperation in the investigation.

The companies named in the settlement were Zimmer, Inc.; Depuy Orthopaedics, Inc.; Smith & Nephew Inc.; and Biomet Orthopedics, Inc.

Click here to read the Department of Justice press release Five Companies in Hip and Knee Replacement Industry Avoid Prosecution by Agreeing to Compliance Rules and Monitoring.

Saturday, September 29, 2007

Bristol-Myers Squibb Settles Kickback Scheme for Over $515 Million

Bristol-Myers Squibb and its subsidiary, Apothecon, have agreed to settle several allegations involving their drug marketing and pricing practices.  The lawsuits alleged that between 2000 and 2003, Bristol-Myers Squibb offered kickbacks to physicians and other healthcare providers to get them to promote Bristol-Myers Squibb drugs. 

Additionally, from 2002 to 2005 the company promoted the sale and use of Abilify for pediatric use and for dementia-related psychosis.  The FDA had not approved the drug for these uses, making it an “off-label” use.  Companies are not allowed to promote drugs for off-label use.

It was also alleged that the company set and maintained inflated prices for its oncology and other generic drugs, knowing that they would be reimbursed through Medicare and other federal programs at these inflated prices.

This settlement resolves in part or in whole allegations brought about by seven qui tam actions brought under the False Claims Act. 

Click here to read more about the Bristol-Myers Squibb Qui Tam Settlement.

Monday, September 24, 2007

New York State Sues Merck & Co. in State's First False Claims Act

Attorney General Andrew M. Cuomo and New York City Mayor Michael Bloomberg have filed a joint lawsuit against Merck & Co. using the state’s new False Claims Act.  In the suit, Merck is accused of deliberately suppressing and concealing information about the seriousness of the cardiovascular risks associated with its drug, Vioxx.  The suit claims that had doctors been properly informed, many Vioxx prescriptions would never have been written.

Vioxx was touted as an arthritis drug, but its users experienced adverse effects that included increased heart attacks and strokes.  Court documents have showed that Merck researchers tailored clinical trials of Vioxx to minimize negative outcomes, and the company aggressively marketed the product downplaying the cardiovascular risks.

The lawsuit alleges that were doctors properly informed of the risks associated with Vioxx, they would not have prescribed the medication, and thus Medicaid and EPIC would not have paid for its dispensation.

This is the first case for New York State’s recently enacted False Claims Act.  The act allows damages and penalties to be tripled for the amount Merck caused them to expend in the Medicaid and EPIC programs to pay for drugs prescribed under false pretenses.  Damages will be determined at trial.

Click here to read the press release from Andrew Cuomo’s office about New York State’s False Claims Act Takes Aim at Merck.

Sunday, September 23, 2007

Novation Faces Suit Alleging Kickbacks

Cynthia Fitzgerald of Plano, TX has filed a lawsuit against her former employer, Novation, claiming that the corporation offered kickbacks to hospitals to secure major contracts.  This allegation reaches far, ultimately resulting in Medicare fraud.  Suppliers, such as Novation, often overcharge hospitals, regaining their kickback money.  Hospitals compensate for this by filing, often fraudulently, for reimbursement from Medicare and Medicaid for the supplies that they are purchasing.

Novation, which is the nation’s largest group purchasing organization for hospitals, serves 2,200 community owned hospitals and 100 teaching hospitals.

Ms. Fitzgerald worked for Novation from July 1998 to Februry 1999 as a senior product manager for medical products.  She alleges that she was fired after alerting her bosses to illegal payments to the company.

Novation claims that the allegations are without merit.

Click here to read the full Dallas News article by Jason Roberson, Novation ex-worker files suit alleging kickbacks.

Thursday, September 13, 2007

Senators Introduce Updates to False Claims Act

Senators Chuck Grassley (R-Iowa) and Dick Durbin (D-Illinois) are sponsoring new legislation called the False Claims Act Correction Act of 2007.  It is supported by Judiciary Committee Chairman Patrick Leahy (D-Vermont) and Ranking Member Arlen Specter (R-Pennsylvania). 

The new legislation aims to improve conditions for whistleblowers who want to report fraud against the federal government using the False Claims Act, which has recovered over $20 billion for the U.S. Treasury.

The legislation makes a variety of corrections to the False Claims Act, including the removal of the requirement that all false claims be presented directly to a government employee. 

Companion legislation is being brought forward to the U.S. House of Representatives by Representative Howard Berman.

Click here to read more about the False Claims Act Correction Act of 2007.

Printer Friendly Page