Total Settlement: $2.3 Billion
Civil: $1 Billion
Criminal: $1.3 Billion (Pfizer: $1.195, Pharmacia & Upjohn Company: $105 million)
Six whistleblowers revealed that Pfizer and its subsidiaries paid kickbacks and engaged in off-label marketing campaigns that improperly promoted numerous drugs. To resolve these allegations, Pfizer agreed to pay $2.3 billion in the then-largest healthcare fraud settlement in history, including a $1.195 billion criminal fine—at the time, the largest ever imposed in the United States for any matter. Pfizer’s alleged fraudulent conduct involved the unlawful promotion of its drugs Aricept, Bextra, Celebrex, Geodon, Lipitor, Lyrica, Norvasc, Relpax, Viagra, Zithromax, Zoloft, Zyrtec, and Zyvox.
Baron & Budd attorneys represented the relators in two of the six cases that led to this historic settlement:
- U.S. ex rel. Westlock v. Pfizer (D. Mass.): Baron & Budd attorneys represented one of two relators in this case, which alleged that Pfizer promoted its schizophrenia drug Geodon (1) for uses that were not approved by the FDA, (2) for improper patient populations, including children and adolescents, and (3) in higher doses than were approved by the FDA. Pfizer also allegedly hired “key opinion leaders” to give promotional talks to physicians about unapproved uses and dosages of Geodon. Pfizer agreed to pay $301 million to settle these allegations.
- U.S. ex rel. Farber et al. v. Pfizer (D. Mass.): Baron & Budd attorneys represented the relators in one of three cases alleging that Pfizer promoted its pain medication Lyrica for a variety of conditions that were not approved by the FDA. Pfizer also allegedly paid kickbacks to healthcare professionals in exchange for their prescribing of Lyrica, and misled healthcare providers as to the effectiveness of the drug and claimed it was superior to its competitor drugs Neurontin and Gabapentin. Pfizer agreed to pay $50 million to resolve these allegations.
Press Release: http://www.justice.gov/opa/pr/justice-department-announces-largest-health-care-fraud-settlement-its-history
Total Settlement: $1.5 Billion
Civil: $800 Million
Criminal: $700 Million
Baron & Budd attorneys represented a relator in one of four cases alleging that Abbot Laboratories engaged in a multifaceted scheme of aggressive off-label promotion for its anti-epileptic drug Depakote. These cases and the government’s investigation led to an $800 million civil settlement, as well as a criminal guilty plea and a $700 million criminal penalty. According to the whistleblowers, Abbott trained its sales representatives to promote Depakote to control agitation and aggression in elderly dementia patients and to treat schizophrenia, neither of which were uses approved by the FDA. Abbott Laboratories allegedly targeted nursing homes for these off-label uses and paid kickbacks to long-term care institutional pharmacy providers, including Omnicare and PharMerica, in the guise of rebates based on increases in the use of Depakote in nursing homes serviced by the providers.
Press Release: http://www.justice.gov/opa/pr/abbott-labs-pay-15-billion-resolve-criminal-civil-investigations-label-promotion-depakote
Total Settlement: $1.4 billion
Civil: $700 million
Criminal: $647 million
FTC: $50 million
In order to profit illegally from the opioid epidemic in this country, Reckitt Benckiser allegedly marketed its opioid product Suboxone to physicians throughout the country as less subject to diversion and less likely to be abused than its competitors’ drugs. Baron & Budd represented a relator in one of six cases that collectively led to the largest recovery in a case concerning an opioid drug in United States history.
Press Release: https://www.justice.gov/opa/pr/justice-department-obtains-14-billion-reckitt-benckiser-group-largest-recovery-case
Total Settlement: $762 Million
Civil: $612 Million
Criminal: $150 Million
In order to increase sales and reap the resulting profits, Amgen allegedly illegally marketed drugs at off-label doses that the FDA had specifically considered and rejected, and for off-label treatments that the FDA had never approved. Baron & Budd attorneys represented a relator in one of twelve cases settled against Amgen arising from the sale and promotion of its drugs Aranesp, Enbrel, Epogen, Neulasta, Neupogen, and Sensipar. At the time of the settlement in 2012, this was the single largest criminal and civil False Claims Act settlement involving a biotechnology company in U.S. history.
Press Release: https://www.justice.gov/opa/pr/amgen-inc-pleds-guilty-federal-charge-brooklyn-ny-pays-762-million-resolve-criminal
Total Settlement: $192.7 Million
Civil: $171.9 Million
Criminal: $20.8 Million
Endo’s drug Lidoderm was approved only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. Baron & Budd attorneys represented a relator in one of three cases alleging that Endo promoted Lidoderm to treat non-PHN related pain, including low back pain, diabetic neuropathy, and carpal tunnel syndrome—none of which were uses approved by the FDA.
Press Release: https://www.justice.gov/opa/pr/endo-pharmaceuticals-and-endo-health-solutions-pay-1927-million-resolve-criminal-and-civil
Total Settlement: $137.5 Million
Baron & Budd attorneys represented the relators in this case, in which Caremark Rx paid $137.5 million to settle allegations that its AdvancePCS unit cheated the government by taking kickbacks from drug companies supplying medicine to federal programs in exchange for preferring their products over their competitors’ drugs. The case was brought by three whistleblowers who were former employees of AdvancePCS and its predecessors.
Press Release: https://www.nytimes.com/2005/09/09/business/caremark-to-settle-whistleblower-suit.html?smid=em-share
Total Settlement: $125 Million
Civil: $102.06 Million
Criminal: $22.94 Million
Baron & Budd attorneys represented two relators in this case, in which Warner Chilcott agreed to plead guilty and pay a total of $125 million in civil and criminal penalties to resolve allegations that the company bribed healthcare providers to prescribe its drugs Actonel, Asacol, Atelvia, Doryx, Enablex, Estrace and Loestrin. Warner Chilcott allegedly paid these kickbacks in the form of “Medical Education Events,” which included dinners, lunches and receptions which often contained minimal (or no) educational component. In addition, Warner Chilcott allegedly caused the submission of false prior authorization requests for its drugs Atelvia and Actonel to overcome formulary restrictions that favored less expensive osteoporosis drugs. Notably, the government pursued not only corporate liability, but individual liability, charging several employees with offenses related to the fraudulent scheme.
Press Release: https://www.justice.gov/opa/pr/warner-chilcott-agrees-plead-guilty-felony-health-care-fraud-scheme-and-pay-125-million
Total Settlement: $90 Million
Baron & Budd worked closely with the Texas Attorney General’s Office, representing one of two relators who alleged that AstraZeneca LP marketed the drugs Seroquel IR and Seroquel XR for the unauthorized use in children and adolescent patients, despite dangerous risks for that vulnerable population. Astrazeneca also allegedly paid bribes to state hospital doctors to influence the use of Seroquel in the state hospital system. The whistleblowers further alleged that AstraZeneca’s sales representatives misrepresented the efficacy of the drugs and distorted the drugs’ harmful side effects in their conversations with healthcare providers.
“Children who are removed from abusive or neglectful homes and placed in foster care often experience some degree of trauma, which can lead to depression,” said Baron & Budd shareholder Scott Simmer. “It’s really appalling to think that a drug company could take advantage of vulnerable children to sell a drug that they should not be taking.”
Press Release: https://www.texasattorneygeneral.gov/news/releases/ag-paxton-recovers-110-million-texas-medicaid-fraud-settlements
Total Settlement: $45 Million
Criminal: $22.5 Million
Civil: $22.5 Million
Par Pharmaceutical pled guilty to unlawfully promoting Megace ES, a drug approved by the FDA to treat anorexia, cachexia, or other significant weight loss suffered by patients with AIDS. Not only did Megace’s label lack adequate directions for use in the treatment of non-AIDS-related geriatric wasting, but Par Pharmaceutical also improperly promoted the drug to elderly nursing home residents with weight loss, whether or not such patients suffered from AIDS, despite their awareness of the potential adverse effects in elderly patients. Baron & Budd attorneys represented the relators in one of three cases that led to this important settlement protecting a vulnerable population.
Press Release: https://www.justice.gov/usao-nj/pr/par-pharmaceutical-companies-inc-pleads-guilty-admits-misbranding-megacer-es
Total Settlement: $36 Million
Baron & Budd represented the relator in this case which led to one of the largest-ever FCA settlements involving Small Business Administration fraud, including the second-largest FCA settlement against an individual in history. ADS Tactical, Inc (“ADS”), its principals, and its subsidiaries allegedly induced the federal government to award a number of small business set-aside contracts by misrepresenting its eligibility for those contracts and engaging in illegal bid-rigging schemes that inflated prices paid by the government.
Several of the key persons involved in the civil settlement also pled guilty to criminal charges. For example, Ron Villanueva and Samuel Caragan, who had worked for companies allegedly involved in the fraudulent scheme, pled guilty to charges related to their role in defrauding the government. Villanueva, a former Virginia state delegate, was sentenced to two and a half years in prison and ordered to pay $524,000 in restitution. Caragan was sentenced to four years of probation, including six months of home detention and ordered to pay over $240,000 in restitution. In addition, the co-founder and former CEO of one of those companies, Khalil “Kal” Naim, pled guilty to one count of aiding and abetting a false statement his wife made to help win federal contracts. Naim was sentenced to one month of incarceration and ordered to pay $479,641.23 in restitution.
Andrew Miller, one of the Baron & Budd counsel representing the relators, said: “[A]ll too frequently in FCA cases, we see corporations consider fraud settlements as simply a cost of doing business. It’s very reassuring for us and our clients to see that the Department of Justice is serious about holding individuals accountable as well.”
Below is an explanation of each settlement:
- Luke Hillier—$20 Million: The majority owner and former CEO of ADS, Luke Hillier, was held accountable for his alleged efforts to misrepresent the size of his companies in order to win small business set-aside contracts. Hiller agreed to pay $20 million, the second-largest FCA settlement ever collected against an individual and one of the first significant settlements following the issuance of the Department of Justice’s Yates Memorandum, which emphasized the need to pursue individual liability for those involved in corporate wrongdoing. The whistleblowers were awarded $3.6 million of this settlement.
- ADS—$16 Million: ADS agreed to pay $16 million for allegedly misrepresenting its eligibility requirements for multiple small business set-aside contracts by concealing the company’s affiliations with several businesses it controlled or owned. The relators were awarded $2.9 million from this settlement.
- The Affiliated Companies—$620,000: MJL Enterprises LLC, a military supplier of industrial official and medical equipment, agreed to pay $400,000 to settle allegations of its involvement in the scheme and that it had misrepresented itself as a service-disabled veteran-owned small business. SEK Solutions, a seller of weapon and industrial storage products, agreed to pay $140,000 for its similar alleged misrepresentation of its eligibility to bid on and receive certain set-aside contracts for qualified women-owned small businesses. The company also allegedly misrepresented itself as a socially or economically disadvantaged business under the Small Business Administration’s 8(a) Program. Karda Systems, a supplier of tactical gear, agreed to pay $80,000 to settle allegations that it also had misrepresented itself as a socially or economically disadvantaged business under the 8(a) Program.
- Charles Salle—$225,000: The former general counsel for ADS, Charles Salle, agreed to pay $225,000 for his alleged participation in the schemes described above.
Press Releases: https://www.justice.gov/opa/pr/former-ceo-virginia-based-defense-contractor-agrees-pay-20-million-settle-false-claims-act
Total Settlement: $33.5 Million
Criminal: $18.5 Million
Civil: $15 Million
Baron & Budd attorneys represented the relator in one of two cases against ISTA Pharmaceuticals, which allegedly promoted its drug Xibrom for uses that were not approved by the FDA and paid bribes to physicians to induce them to prescribe Xibrom. The government’s investigation also led to a guilty plea to conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the federal Anti-Kickback Statute.
Press Release: http://www.justice.gov/opa/pr/ista-pharmaceuticals-inc-pleads-guilty-federal-felony-charges-will-pay-335-million-resolve
Total Settlement: $28.125 Million
Baron & Budd attorneys represented a relator in one of two cases against Omnicare in connection with the Abbot Laboratories scheme that led to a combined $1.5 billion settlement. These cases alleged that Omnicare, an institutional pharmacy for nursing homes, solicited and received kickbacks from Abbott Laboratories in exchange for the promotion of Depakote, an anti-epileptic drug. Omnicare, disguising these kickbacks as “grants” and “educational funding” from Abbott, allegedly took advantage of its roles as institutional pharmacy at the expense of vulnerable patients in nursing homes. The government intervened in the case and settled with Omnicare for $28.125 million.
Press Release: https://www.justice.gov/opa/pr/nation-s-largest-nursing-home-pharmacy-pay-over-28-million-settle-kickback-allegations
Total Settlement: $22.75 Million
Baron & Budd attorneys represented two relators in a case brought under the California Insurance Frauds Prevention Act (CIFPA), which allows private citizens to sue those who commit fraud against private insurance companies in California and receive a share of the recovery. Warner Chilcott paid $22.75 million to settle allegations that it paid kickbacks and falsified prior authorization forms to increase the number of prescriptions written for several of its drugs. This was the first successful settlement under CIFPA involving fraud by a pharmaceutical manufacturer against private health plans. The relators received 49 percent of the recovery.
The ability to target private insurance fraud—not just fraud against the government, as the False Claims Act and its state counterparts do—makes CIFPA a uniquely powerful tool for whistleblowers. “This case really should get the attention of state insurance commissioners around the country. To put things in perspective, the federal False Claims settlement returned a net of around $2.3 million to California’s Medicaid program, but this settlement will bring in a net of $11.8 million to the state’s general fund,” said Baron & Budd shareholder Scott Simmer. “Most importantly, drug companies have received a clear message not to engage in drug marketing fraud in the state of California.”
Press Release: https://web.archive.org/web/20161104094957/http://www.insurance.ca.gov/0400-news/0100-press-releases/2015/release117-15.cfm
- Texas ex rel. Foote et al. v. AstraZeneca et al. (353rd Judicial Dist., Travis County, Tex.)
Total Settlement: $20 Million
Baron & Budd attorneys represented the relators in one of three cases alleging that AstraZeneca took aggressive attempts to increase the sales of Crestor by promoting off-label uses of the cholesterol-lowering drug to Texas Medicaid patients. AstraZeneca sales representatives allegedly told healthcare providers that Crestor had a number of beneficial uses, even though these uses were not scientifically supported or approved by the FDA. The company’s sales representatives also allegedly obscured the life-changing risk of diabetes that the use of Crestor posed for certain patients.
Press Release: https://www.texasattorneygeneral.gov/news/releases/ag-paxton-recovers-110-million-texas-medicaid-fraud-settlements
Total Settlement: $20 Million
Baron & Budd attorneys represented a relator in one of two federal cases involving Seroquel. Similar to the case leading to a $90 million settlement with the state of Texas, this case alleged that AstraZeneca used illegal promotional practices to sell its antipsychotic drugs Seroquel IR and Seroquel XR. The complaint alleged that AstraZeneca LP marketed the drugs for the unauthorized use in children and adolescent patients, despite dangerous risks for that vulnerable population. Astrazeneca also allegedly paid bribes to state hospital doctors to influence the use of Seroquel in the state hospital system. The whistleblowers further alleged that AstraZeneca’s sales representatives misrepresented the efficacy of the drugs and distorted the drugs’ harmful side effects in their conversations with healthcare providers.
Total Settlement: $15 Million
Baron & Budd attorneys represented a relator in a case that led to a separate $15 million settlement with the state of Louisiana, in connection with the Abbot Laboratories scheme that led to a combined $1.5 billion federal settlement. These cases alleged that Abbott trained its sales representatives to promote Depakote to control agitation and aggression in elderly dementia patients and to treat schizophrenia, neither of which were uses approved by the FDA. Abbott Laboratories allegedly targeted nursing homes for these off-label uses and paid kickbacks to long-term care institutional pharmacy providers, including Omnicare and PharMerica, in the guise of rebates based on increases in the use of Depakote in nursing homes serviced by the providers.
Total Settlement: $13.25 Million
Baron & Budd attorneys represented a relator in one of three cases that led to a $192.7 million federal settlement against Endo for the unlawful promotion of its drug Lidoderm for uses that were not approved by the FDA. Baron & Budd attorneys also represented a relator in this separate case under the Texas Medicaid Fraud Prevention Act, which recovered $13.25 million.
“We often read headlines about cases where a drug does more harm than good, but as taxpayers paying for programs like Medicaid, we should be outraged at having to pay for a drug that does nothing at all to help the patient because that wastes precious resources,” said Baron & Budd shareholder Scott Simmer. “In this case, our clients alleged that Endo deliberately chose to suppress the findings of five clinical trials it had sponsored, all of which showed Lidoderm was no more effective than a placebo for treating various types of pain.”
Press Release: https://www.businesswire.com/news/home/20180801005877/en/Baron-Budd-Secures-13.25-Million-Settle-Texas
Total Settlement: $11.85 Million
When a patient is prescribed a drug, he or she is typically responsible only for a small fraction of the cost of the drug, called the copayment. The patient’s insurance provider typically pays for the bulk of the cost of the drug. Pharmaceutical companies often take advantage of this to their benefit, increasing the prices of their drugs to hundreds of thousands of dollars a year, then funneling money to patients to cover their copayments. When drug companies cover the copayments of patients using government healthcare plans such as Medicare and Medicaid, they are committing fraud. Although the practice might seem charitable, it is really just a way to keep drug prices artificially high and stick you, the taxpayer, with the bill.
Baron & Budd represented a relator who alleged exactly this sort of scheme. Specifically, the complaint alleged that two drug manufacturers, Sanofi and Genzyme, used patient assistance programs to cover the copayments for patients using government healthcare plans, leaving taxpayers to cover the bulk of the artificially inflated cost of the drugs at issue—hundreds of thousands of dollars per year for each patient.
“This case and settlement are proof that whistleblowers are essential in fighting fraud against the government and taxpayers,” said Baron & Budd shareholder Scott Simmer. “These drug companies need to be held accountable for wasting taxpayer dollars and defrauding government programs under the guise of a charitable organization.”
Press Release: https://www.justice.gov/usao-ma/pr/sanofi-agrees-pay-1185-million-resolve-allegations-it-paid-kickbacks-through-co-pay
Total Settlement: $11 Million
Baron & Budd attorneys represented a relator in one of three cases alleging that, in order to profit illegally from the opioid epidemic in this country, Reckitt Benckiser marketed its opioid product Suboxone to physicians throughout the country as less subject to diversion and less likely to be abused than its competitors’ drugs. In a separate federal settlement, Baron & Budd represented a relator in one of six cases that collectively led to the largest recovery in a case concerning an opioid drug in United States history—$1.4 billion.
These cases were brought under the California Insurance Frauds Prevention Act (CIFPA), which allows private citizens to sue those who commit fraud against private insurance companies in California and receive a share of the recovery. Reckitt Benckiser paid $11 million to resolve claims under this statute.
The ability to target private insurance fraud—not just fraud against the government, as the False Claims Act and its state counterparts do—makes CIFPA a uniquely powerful tool for whistleblowers.
Press Release: https://www.becomeawhistleblower.com/news/california-insurance-fraud-prevention-act/
Total Settlement: $9.25 Million
Baron & Budd attorneys represented a relator in one of two cases against PharMerica, an alleged participant in Abbott’s kickback scheme involving the drug Depakote that led to a $1.5 billion settlement. In this offshoot case, PharMerica, an institutional pharmacy for nursing homes, allegedly solicited and received kickbacks from Abbott Laboratories in exchange for the promotion of Depakote, an anti-epileptic drug. PharMerica, disguising these kickbacks as “grants” and “educational funding” from Abbott, allegedly took advantage of its roles as institutional pharmacy at the expense of vulnerable patients in nursing homes. The government intervened in the case and settled with PharMerica for $9.25 million
“The important lesson from the PharMerica settlement is that both parties — the payor and the payee — may be liable under the Anti-Kickback Act,” said Baron & Budd shareholder Scott Simmer. “The most appalling thing about this case is that it shows how the trust of some of the most vulnerable Americans — the elderly — can be violated.”
Press Release: https://www.justice.gov/opa/pr/nations-second-largest-nursing-home-pharmacy-pay-925-million-settle-kickback-allegations
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