Archive for the ‘State False Claims Acts’ Category

Wyeth Pharmaceuticals Settles Off-label Marketing Allegations for $490.9 Million

Wyeth Pharmaceuticals Inc., (Wyeth) acquired by Pfizer Inc. in 2009, entered a $490.9 million settlement with the United States government that resolved criminal and civil liability arising from the off-label marketing of it immunosuppressive drug Rapamune.

Under the Federal Food, Drug and Cosmetic Act (FDCA), when a pharmaceutical company developes a product it must indicate the specific use of the product in its new drug approval application submitted to the U.S. Food and Drug Administration (FDA).  Once the FDA approves the product for the specific use, a company may not market the drug for any other uses, unless if recieves FDA approval for such new use. The FDA, in 1999, approved Wyeth’s Rapamune for the limited use in renal (kidney) transplant patients and required the drug’s label to include a warning against certain uses.

Under the government’s criminal information, it alleged that Wyeth trained its national Rapamune sales force to promote the drug for use with non-renal transplant patients. Or in other words to promote the use of Rapamune for uses other than its specific FDA approved use.  According to the information Wyeth also supplied its sales force with training materials regarding the off-label use of Rapamune and how to use such materials in presentations to transplant physicians.  Wyeth provided its sales force with financial incentives to target all transplant patients with the goal of increasing Rapamune sales. Sanford Coats, U.S. Attorney for the Western District of Oklahoma characterized Wyeth’s training of its sales forceon the off-label promotions of Rapamune as “a systemic, corporate effort to seek profit over safety.”

Wyeth pleaded guilty to the criminal information that charged it with a misbranding violation under the FDCA.  Wyeth was charged with a criminal fine and forfeiture of $233.5 million.  Wyeth concurrently settled civil allegations with the federal and state governments totalling $257.4 million.  The government under the civil settlement alleged that from 1998 through 2009, Wyeth promoted Rapamune for unapproved uses, some which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs.  The unapproved uses included promoting Rapamune for non-renal transplants, converting patients from other immunosuppressant drugs to Rapamune, and using Rapamune in combination with other immunosuppressive agents not included on Rapamune’s FDA approved label.  This conduct resulted in false claims being submitted to the federal and state health care programs.  Wyeth in settling these allegations will pay the federal government $230, 112, 596 and the state governments will recieve $27,287,404.

This civil settlement resovles two qui tam cases filed which included these allegations.  The first action was filed by former Rapamune sales representative Marlene Sandler, and pharmacist Scott Paris.  The second qui tam was filed by former Rapamune sales reprsentative Mark Campbell.  At the time of the Department of Justice’s announcement on July 30, 2013, the whistleblowers had not resovled the amount of their share of the total settlement.

 

Posted in False Claims, Federal False Claims Act, Healthcare Fraud, Off-Label Marketing, Qui Tam, Settlements, State False Claims ActsNo Comments

Tennessee Nursing Home Managers Agree to Pay $2.7 Million to Settle False Claims Act Allegations

Grace Healthcare LLC and its affiliate Grace Ancillary Service LLC (collectively referred to as Grace) located in Chattanooga, Tennessee agreed to pay $2.7 million to resolve allegations that the companies violated the False Claims Act by knowingly submitting or causing to be submitted false claims for medically unreasonable and unnecessary rehabilitation therapy to the Federal Medicare program and the state TennCare/Medicaid program.  The therapy services included physical, occupational, and speech therapy.

The settlement resolves the qui tam action brought under The False Claims Act by a former Grace employee that alleged that in ten nursing homes between 2007 through June 2011 Grace pressured therapists to increase the amount of therapy they provided to residents regardless of the medical necessity of such services in order to meet targets for Medicare revenue.  These targets were established without regard to the patients’ actual need for therapy and could only be achieved by billing for a large amount of therapy for each patient.  Grace Ancillary Service LLC provided the therapy in some of the skilled nursing facilities owned and/or managed by Grace Healthcare LLC in Tennessee and elsewhere.

The whistleblower will receive $405,000 of the government’s recovery in accordance with the False Claims Act provisions.

Posted in False Claims, Federal False Claims Act, Healthcare Fraud, Mens Rea, Settlements, State False Claims Acts, Whistleblower Lawsuit, Worthless ServiceNo Comments

State False Claims Acts

District of Columbia Procurement Reform Amendment Act
California False Claims Act
Colorado Medical Assistance Act
Connecticut False Claims Act
Delaware False Claims and Reporting Act
Florida False Claims Act
Georgia False Medicaid Claims Act
Georgia Taxpayer Protection False Claims Act
Hawaii False Claims Act Against State
Hawaii False Claims Act Against Counties
Illinois False Claims Act
Illinois Whistleblower Reward and Protection Act
Indiana False Claims and Whistleblower Protection Act
Iowa False Claims Act
Louisiana Medical Assistance Programs Integrity Law
Maryland False Claims Act of 2010
Massachusetts False Claims Act
Michigan Medicaid False Claim Act
Minnesota False Claims Against the State
Montana False Claims Act
Nevada False Claims Act
New Hampshire False Claims Act
New Jersey False Claims Act
New Mexico Fraud Against Taxpayers Act
New Mexico Medicaid False Claims Act
New York False Claims Act
North Carolina False Claims Act
Oklahoma Medicaid False Claims Act
Rhode Island False Claims Act
Tennessee False Claims Act
Tennessee Medicaid False Claims Act
Texas Medicaid False Claims Act
Virginia Fraud Against Taxpayers Act
Washington Medicaid Fraud Bill
Wisconsin False Claims Act

Posted in State False Claims ActsNo Comments

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