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 Drug Price Fraud Whistleblower Lawyer and Inflated Average Wholesale Price Lawyer Handles Drug Price Fraud Whistleblower Lawsuits, Inflated Average Wholesale Price Fraud Whistleblower Lawsuits, Medicare Fraudulent Drug Price Fraud Whistleblower Lawsuits, Drug Price Kickback Whistleblower Lawsuits, Pharmaceutical False Price Information Whistleblower Lawsuits, and Drug Representative Whistleblower Lawsuits by Texas Inflated Average Wholesale Price Lawyer and Drug Price Fraud Whistleblower Lawyer Jason S. Coomer

Drug price fraud lawsuits, average wholesale price fraud lawsuits, and drug price fixing lawsuits are types of qui tam whistle-blower claims where a drug company or pharmacy uses inflated drug prices and inflated drug spreads to increase their profits and/or market share.  Pharmaceutical Executives, Drug Representatives, and other health care professionals are encouraged to blow the whistle on these types of fraudulent drug pricing schemes.

To confidentially have a whistle-blower case reviewed or for more information on a potential Drug Price Fraud Whistle-blower Lawsuit, feel free to contact Average Wholesale Price Drug Pricing Fraud Whistle-blower Lawyer Jason Coomer via e-mail message or use our submission form to discuss a potential pharmaceutical Medicare drug price fraud whistleblower lawsuit, Medicaid drug price fraud whistleblower lawsuit, or other government health program fraudulent drug pricing scheme whistleblower Lawsuit. 

Whistle-blowers That Are The First to Properly File Drug Price Fraud Lawsuits Can Receive Large Financial Rewards For Exposing The Drug Company False Drug Pricing

Pharmaceutical Companies and Drug Companies that engage in schemes to report false and inflated prices for pharmaceutical products, knowing that federal healthcare programs rely on those reported prices to set payment rates are committing Drug Price Fraud and can be held liable for these illegal actions.  The difference between the resulting inflated government payments and the actual price paid by healthcare providers for a drug is referred to as the “spread.” The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government.

Pharmaceutical Executives that commit drug pricing fraud, cooperate with other drug executives that are committing drug price fraud, or fail to report fraudulent drug price schemes can be held liable for criminal and civil prosecution.  In fact, the government is cracking done on drug price fraud schemes and is actively encouraging drug price fraud whistleblowers to step forward to report fraudulent drug pricing schemes that are costing government health care programs like Medicaid, Medicare, Tricare, and the Veteran's Administration millions of dollars.  Pharmaceutical Sales Executives, Pharmacists, Drug Representatives, and other health care professionals that properly blow the whistle on fraudulent drug pricing schemes can receive a significant recovery on money recovered by being the first to file on Drug Price Medicare fraud, Drug Price Medicaid fraud, Drug Price Tricare fraud, and/or Drug Price VA.

Pharmaceutical executives and representatives who are the original source of specialized knowledge of drug pricing fraud can recover large economic rewards for properly reporting fraudulent drug pricing schemes.  A successful false claims act qui tam claim can not only result in a significant recovery for the drug representative whistleblower, pharmaceutical executive whistleblower, or pharmaceutical accounting whistleblower, but can result in uncovering Medicare price fraud, Medicaid price fraud, Tricare price fraud, and/or VA price fraud that could result in millions or billions of dollars being recovered or saved by taxpayers.

There are several keys to a successful Drug Price Fraud False Claims Act Qui Tam Whistleblower Lawsuit including 1) obtaining original and specialized information of the fraud, 2) being the first to file regarding the specific fraud, and 3) protecting the whistleblower for retaliation. 

Fraudulent Drug Pricing Schemes in the News including Pharmaceutical Company Drug Price Fraud Whistleblower Lawsuit Information, Drug Company False Drug Pricing Whistleblower Lawsuit Information, Pharmaceutical Executive Whistleblower Lawsuit Information, Medicaid False Drug Pricing Lawsuit Information, and Medicare False Drug Pricing Lawsuit Information

It is important for the pharmaceutical representative whistleblowers, medical device sales representative whistleblowers, drug marketing representative whistleblowers, and other drug executive whistleblowers to blow the whistle on drug fraud pricing schemes.  Below are some press releases on success Drug Price Fraud Lawsuits that have been in the news.


FOR IMMEDIATE RELEASE TUESDAY, DECEMBER 21, 2010 WWW.USDOJ.GOV/USAO/MA E-MAIL: USAMA.MEDIA@USDOJ.GOV

PHARMACEUTICAL MANUFACTURER TO PAY $280 MILLION TO SETTLE FALSE CLAIMS ACT CASE

Related Settlements this Month now Total More Than $701 million

BOSTON, Mass. – The Justice Department announced today that Dey Inc., Dey Pharma L.P. (formerly known as Dey, L.P.), and Dey L.P. Inc. have agreed to pay $280 million to settle False Claims Act allegations. This settlement resolves claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products, knowing that federal healthcare programs relied on those reported prices to set payment rates. The actual sales prices for the Dey products were far less than what Dey reported.

The United States alleged that Dey reported false prices for the following drugs: Albuterol Sulfate, Albuterol MDI, Cromolyn Sodium, and Ipratropium Bromide. The difference between the resulting inflated government payments and the actual price paid by healthcare providers for a drug is referred to as the “spread.” The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government. The government alleges that Dey The difference between the resulting inflated government payments and the actual price paid by healthcare providers for a drug is referred to as the “spread.” The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government.

This is the fourth such settlement with pharmaceutical manufacturers that the Department of Justice has announced this month. On Dec.7, 2010, the Department announced settlements totaling $421.1 million involving similar allegations against three other manufacturers: Abbott Laboratories Inc., B. Braun Medical Inc., and Roxane Laboratories Inc.

“With this settlement, the Department of Justice has now recovered over $2 billion dollars from pharmaceutical manufacturers arising from similar unlawful drug pricing schemes. As the department alleged in its complaint against Dey, by offering customers one price and then falsely reporting inflated prices to the lists the government uses when calculating how much to pay for the drugs, pharmaceutical companies created an incentive for the purchase of their drugs by allowing buyers to pocket the difference between the actual price of the drug and the inflated government payment,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Taxpayer-funded kickback schemes like this not only cost federal health care programs millions of dollars, they threaten to undermine the integrity of the choices health care providers make for their patients.”

United States Attorney Carmen M. Ortiz of the District of Massachusetts said, “Our federally-funded health care programs pay for prescription drugs based in part on pricing information reported by pharmaceutical companies. When a company reports falsely inflated prices for the purpose of increasing its sales and profits, it undermines the integrity of our health care system. Drug companies must understand that they risk substantial liability if they report false drug pricing information.”

The settlement resolves a whistleblower action filed under the False Claims Act by Ven-A-Care of the Florida Keys Inc., a Florida home-infusion company, and its principals, entitled United States of America ex rel. Ven-a-Care of the Florida Keys Inc. v. Dey Laboratories, et al., Civil Action No. 05-11084-PBS (D. Mass.). The False Claims Act’s qui tam provisions allow private persons with knowledge of fraud to file suit on behalf of the United States and share in any recovery. As part of this settlement, the Ven-A-Care whistleblowers will receive a share of approximately $67.2 million.

“This settlement with Dey highlights the Office of the Inspector General’s decade-long commitment to protecting against artificially inflated drug prices,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Our analyses of drug price reporting practices – including the use of ‘Average Wholesale Price’ – have consistently identified excessive Medicare and Medicaid payments resulting from these practices.”

The case was investigated and litigated principally by Assistant United States Attorneys George B. Henderson, Barbara Healy Smith and James J. Fauci in Ortiz's Civil Division, with Trial Attorneys Laurie Oberembt, Justin Draycott, Rebecca Ford and Assistant Director Renee Brooker from the Fraud Section of the Justice Department's Civil Division. Mary Riordan of the Office of Counsel to the Inspector General, Office of Inspector General, and Leslie Stafford, Office of General Counsel, U.S. Department of Health and Human Services, provided assistance in the investigation, litigation and resolution of all three cases. Attorneys for Ven-a-Care of the Florida Keys, Inc. also provided significant assistance in the cases.

This resolution is part of the government’s emphasis on combatting health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.

This resolution is part of the government’s emphasis on combatting health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.


Assistant Attorney General Tony West Speaks at Press Conference Announcing Major Settlements with Pharmaceutical Manufacturers Washington, D.C. ~ Tuesday, December 7, 2010

Good morning and welcome. My name is Tony West, and I’m the Assistant Attorney General for the Civil Division of the Department of Justice. In that capacity I oversee much of the federal government’s civil litigation across the country. I am pleased this morning to be joined by three great colleagues and friends: Carmen Ortiz, the United States Attorney for the District of Massachusetts; Wifredo Ferrer, the United States Attorney for the Southern District of Florida; and Dan Levinson, the Inspector General of the Department of Health and Human Services.

Over the last two years, the Justice Department—in close collaboration with the Department of Health and Human Services—has made cracking down on health care fraud a top priority. Today, we announce the latest results of those efforts. We have reached significant settlements with three drug companies—Abbott Laboratories, Inc.; Roxane Laboratories, Inc.; and B. Braun Medical, Inc.—settlements that will collectively return more than $421 million to the Medicare and Medicaid programs. These settlements stem from lawsuits in which we’ve alleged that these companies engaged in a complicated and complex scheme to market their drugs through an unlawful pricing arrangement that amounted to kickbacks funded by taxpayer dollars.

Now before my colleagues and I describe the details of this elaborate scheme, let me note that these cases are the latest in a string of settlements, judgments, convictions and fines that are part of Attorney General Eric Holder’s aggressive effort to combat fraud in all its forms over the last two years. In fact, I’m pleased to announce, that since January 2009, the Civil Division, working closely with our U.S. Attorney partners around the country, has recovered more money lost to fraud than ever before—over $9 billion in civil and criminal cases involving fraud on American taxpayers and consumers; a staggering and unprecedented amount that represents the largest two-year fraud recovery in the Department’s history.

The cases that make up that record-breaking amount cover the full spectrum of Civil Division fraud cases: from the financial fraud cases like mortgage fraud that victimize homeowners who are already struggling to hold on to their homes; to procurement fraud cases involving substandard provisions supplied to our troops in Iraq and Afghanistan; to the investor fraud scams involving fake business opportunities that cheat honest small businesspeople out of their hard-earned investments. Together, these cases represent an aggressive, coordinated and sustained effort at the federal level to hold perpetrators of fraud accountable, be they large companies or individuals –and over the last two years we have done just that.

Over half of that record-breaking sum—more than $5 billion—is comprised of health care fraud cases like the settlements against Abbott, Roxane and B. Braun we are announcing today.

These three cases involve something called the AWP, or “Average Wholesale Price.” That’s the price companies report to published national pricing lists as the price of their drugs. The government uses these same price lists to pay health care providers who purchased those drugs for their Medicare and Medicaid patients.

Now this was the honor system: companies were supposed to report the Average Wholesale Price they were actually charging for their drugs, but in fact, we allege, that’s not what they did. Instead, the AWP reported by these defendants—the same prices used by the government to pay providers—were greatly inflated. This allowed drug companies to create an incentive for the purchase of their drugs, since buyers could pay the drug companies one price and obtain government payment at an inflated price and pocket the difference—essentially a kickback scheme funded by taxpayer dollars. Not only did this practice cost our public healthcare programs millions of dollars, it also threatened to undermine the integrity of the choices health care providers made for their patients.

In fact, this practice within the pharmaceutical industry was widespread—so much so that instead of Average Wholesale Price, “AWP,” it was jokingly said, really stood for: “Ain’t What’s Paid.” Indeed, the only purchasers who paid the inflated, reported drug price were you, the American taxpayers.

Now, this was a very complicated and hard-fought case that required years of tireless, persistent and dedicated work by our lawyers, paralegals and investigators here in the Civil Division, in the U.S. Attorneys Offices for Massachusetts and the Southern District of Florida and in the HHS Office of Inspector General, especially over the last three years. Without them, this important victory for our public healthcare programs would not have occurred. It’s a reminder of the high commitment to public service our federal civil servants embody.

And now it’s my pleasure to introduce the United States Attorney for the District of Massachusetts, Carmen Ortiz.


TAP PHARMACEUTICAL PRODUCTS INC. AND SEVEN OTHERS CHARGED WITH HEALTH CARE CRIMES; COMPANY AGREES TO PAY $875 MILLION TO SETTLE CHARGES

Boston, MA... United States Attorney Michael J. Sullivan, Department of Health and Human Services Inspector General Janet Rehnquist, Assistant Inspector General for Investigations and Director of the Department of Defense Criminal Investigation Service Carol Levy, and Special Agent in Charge of the Federal Bureau of Investigation in New England Charles S. Prouty, announced today that:

(1) TAP Pharmaceutical Products Inc. ("TAP"), a major American pharmaceutical manufacturer, has agreed to pay $875,000,000 to resolve criminal charges and civil liabilities in connection with its fraudulent drug pricing and marketing conduct with regard to Lupron, a drug sold by TAP primarily for treatment of advanced prostate cancer in men. The global agreement includes:

(a) TAP has agreed to plead guilty to a conspiracy to violate the PrescriptionDrug Marketing Act and to pay a $290,000,000 criminal fine, the largest criminal fine ever in a health care fraud prosecution. The plea agreement between the United States and TAP specifically states that TAP's criminal conduct caused losses of $145,000,000.

(b) TAP has agreed to settle its federal civil False Claims Act liabilities and to pay the U.S. Government $559,483,560 for filing false and fraudulent claims with the Medicare and Medicaid programs as a result of TAP's fraudulent drug pricing schemes and sales and marketing misconduct.

(c) TAP has agreed to settle its civil liabilities to the fifty states and the District of Columbia and to pay them $25,516,440 for filing false and fraudulent claims with the states, as a result of TAP's drug pricing and marketing misconduct, and from TAP's failure to provide the state Medicaid programs TAP's best price for those drugs as required by law.

(d) TAP has agreed to comply with the terms of a sweeping corporate integrity agreement which, among other things, significantly changes the manner in which TAP supervises its marketing and sales staff, and ensures that TAP will report to the Medicare and Medicaid programs the true average sale price for drugs reimbursed by those programs.

(2) A federal grand jury returned an indictment unsealed today, charging one physician and six TAP managers with conspiracy to pay kickbacks to doctors and other customers, conspiracy to defraud the state Medicaid programs on TAP's obligation to sell products to those programs at its best price, and conspiracy to violate the Prescription Drug Marketing Act by causing free samples to be illegally billed to the Medicare program. The indictment charges that the TAP defendants offered to give things of value, including free drugs, so-called educational grants, trips to resorts, free consulting services, medical equipment, and forgiveness of debt, to physicians and other customers to obtain their referrals of prescriptions for Lupron to Medicare program beneficiaries, in violation of the anti-kickback statute. The indictment also charges that the TAP defendants aided and abetted, and caused the billings to hundreds of elderly Medicare program beneficiaries and to the Medicare program directly, for thousands of free samples of Lupron, used in the treatment of prostate cancer, in violation of the Prescription Drug Marketing Act.

The seven individuals charged in the indictment unsealed today are:

(1) ALAN MACKENZIE, age 49, of 27068 Wellington Court, Barrington, Illinois, and formerly Vice President of Sales for TAP.

(2) JANICE SWIRSKI, age 40, of 6 Bellingham Drive, Chestnut Hill, Massachusetts, and formerly a National Account Manager with TAP.

(3) HENRY VAN MOURICK, age 43, of 23 Golfwood Court, Roseville, California, and currently a District Manager employed by TAP.

(4) DONNA TOM, age 37, of 141 East 56th Street, New York, New York, and formerly a District Manager employed by TAP.

(5) KIMBERLEE CHASE, age 35, of 108 Dedham Street, Dover, Massachusetts, and formerly a District Manager employed by TAP.

(6) DAVID GUIDO, age 30, of 131 New London Road, Colchester, Connecticut, and currently a Hospital Account Executive employed by TAP.

(7) DR. JOHN ROMANO, age 48, of 110 Long Pond Road, Plymouth, Massachusetts, an urologist with a practice in Plymouth, Massachusetts.

Prior to yesterday's indictment, four other physicians have been charged and have pleaded guilty in this investigation: Dr. Rodney Mannion, a urologist practicing in LaPorte and Michigan City, Indiana, was charged on February 28, 2000 with healthcare fraud. Dr. Mannion pleaded guilty to that charge on April 25, 2000. Dr. Jacob Zamstein, a urologist practicing in Bloomfield, Connecticut, was charged on November 3, 2000 with healthcare fraud and pleaded guilty on December 27, 2000. Dr. Joseph Spinella, a urologist practicing in Bristol, Connecticut, was charged on December 8, 2000 with healthcare fraud and pleaded guilty on March 29, 2001. Dr. Joel Olstein, a urologist practicing in Lewiston, Maine, was charged on April 11, 2001 with healthcare fraud and pleaded guilty on July 18, 2001.

Lupron is marketed by TAP primarily for the treatment of prostate cancer. Lupron is identical in effectiveness to the drug Zolodex, produced by a competitor, which was also available for prescription in the 1990s. While Medicare does not pay for most drugs needed by Medicare beneficiaries, Medicare does cover drugs, such as Lupron, that must be injected under the supervision of a physician. Medicare paid for 80% of either the urologist's charge for Lupron or the average wholesale price reported by TAP, whichever was lower, and the patient was responsible for the remaining 20% as a copayment.

As part of its civil allegations, the Government alleged that throughout the1990s, TAP set and controlled the price at which the Medicare program reimbursed physicians for the prescription of Lupron by reporting its average wholesale price ("AWP"). The AWP reported by TAP was significantly higher than the average sales price TAP offered physicians and other customers for the drug. The Government alleged that TAP marketed the spread between its discounted prices paid by physicians and the significantly higher Medicare reimbursement based on AWP as an inducement to physicians to obtain their Lupron business. The Government further alleged that TAP concealed the true discounted prices paid by physicians from Medicare, and falsely advised physicians to report the higher AWP rather than their real discounted price for the drug. The Government further alleged that TAP set its AWPs of Lupron at levels far higher than the price for which wholesalers or distributors actually sold the drug, resulting in falsely inflated prices that were neither the physician's actual cost nor the true wholesaler's average price.

"The Medicare and Medicaid drug programs are bulwarks against the financial hardship that can be caused by the need for life-saving medical treatments," said Robert D. McCallum, Jr., Assistant Attorney General for the Justice Department's Civil Division. "These programs cannot afford abuses that enrich doctors or drug companies at the expense of taxpayers and patients. This settlement agreement and the compliance steps that TAP has agreed to take will reinforce the government's long-standing objective of paying Medicare and Medicaid providers for the reasonable costs of the drugs they administer."

"The urologists and the TAP employees who knowingly participated in this broad conspiracy took advantage of older Americans suffering from prostate cancer. The indictment unsealed today alleges that TAP employees sought to influence the doctors' decisions about what drug to prescribe to patients by giving them kickbacks and bribes, from free samples to free consulting services to expensive trips to golf and ski resorts to so-called educational grants," said U.S. Attorney Sullivan. "In all instances where the kickbacks worked to ensure the prescription of TAP's product Lupron, the Medicare Program and the elderly Americans suffering from prostate cancer paid more for their care than if the doctor had prescribed the competitor's product."

"Medicare beneficiaries and all American patients need to get the right pharmaceuticals, based on medical criteria, and at a fair price. This is crucial both to ensure good quality health care and to use our resources effectively. Today's settlement is a clear message that the federal government will protect the best interests of beneficiaries and taxpayers," said HHS Secretary Tommy G. Thompson.

"This prosecution has resulted in the largest criminal and civil recoveries in any health care fraud case in the country. The fraud schemes used by TAP Pharmaceuticals and others impacts significantly on the integrity of TRICARE, the Department of Defense's healthcare system," stated DCIS Special Agent in Charge Edward Bradley. "Healthcare fraud increases patients' costs and negatively effects the delivery of health care services to over 8 million military members, retirees, and their dependents."

The indictment unsealed today against the seven individuals alleges that inducements to physicians included free products; free consulting services; trips to expensive golf and ski resorts; money disguised as "educational grants," but in fact was used and intended to be used for many purposes, including cocktail party bar tabs, office Christmas parties, medical equipment, travel expenses for urologists and their staff to attend conferences; and discounts on Lupron sold to treat endometriosis in women to effect a lower price on Lupron used in the treatment of men with prostate cancer.

The investigation commenced in the District of Massachusetts in 1997 after a urologist employed by Tufts Associated Health Maintenance Organization ("Tufts HMO") in Waltham, Dr. Joseph Gerstein, reported to law enforcement authorities that he had been offered an educational grant if he would reverse a decision he had made on behalf of Tufts that it would only cover the less expensive drug Zoladex. As charged in the indictment, SWIRSKI and CHASE met with Dr. Gerstein after he began working with the FBI and the Office of Inspector General, and during those meetings, offered him $65,000 in educational grants that he could use for any purpose "whatever," together with discounts on other products, if he would reverse Tufts' decision not to include Lupron on its formulary for treating patients that it insured who were suffering from prostate cancer. The investigation was also triggered by a civil False Claims Act suit filed in 1996 by Douglas Durand, after he had quit his employment at TAP as Vice President of Sales, after just one year because of his concerns about the illegal marketing conduct of some of TAP's employees.

The civil False Claims Act provides that where persons submit, cause others to submit, or conspire to submit, false or fraudulent claims to the United States Government, including its federal health care programs, the Government is entitled to recover treble damages and $5,500 to $11,000 for each false or fraudulent claim submitted. Private individuals, like Dr. Gerstein and Douglas Durand, are allowed to file whistleblower suits under the False Claims Act to bring the government information about wrongdoing, and if the government is successful in resolving or litigating their claims, to share in the recovery by receiving generally 15% to 25% of the amount recovered. As a part of today's resolution, those two individuals together with Tufts Associated HMO will share as whistleblowers, pursuant to the Congressional directive in the False Claims Act, 17% of the civil recovery, or an amount of approximately $95 million.

"The payment by TAP of nearly $900 million including the highest criminal fine ever imposed on any health care company, and the indictment of the six TAP employees sends a very strong signal to the pharmaceutical industry that it best police its employees' conduct and deal strongly with those who would gain sales at the expense of the health care programs for the poor and the elderly and the persons insured by those programs," said U.S. Attorney Sullivan.

As part of a condition for doing business in the future with providers who are members of the Medicare and Medicaid programs, TAP agreed to enter into an extensive Corporate Integrity Agreement. That agreement provides for significant training of TAP's sales and marketing employees and changes in supervision and controls. It also requires TAP to report to the Medicare and Medicaid programs accurate pricing information showing TAP's true average sales price.

"In recent years, the pharmaceutical industry has come under increasing scrutiny for its pricing, sales, and marketing practices. The OIG, together with other government agencies, will use all available enforcement authorities, where appropriate, to address these practices," said HHS Inspector General Janet Rehnquist.

The entire amount of the $290 million criminal fine paid by TAP will go to the Department of Justice's Crime Victims Fund. The Fund was established in 1984 by the Victims of Crime Act ("VOCA") and serves as a major funding source for victim services throughout the country. Each year, millions of dollars are deposited into this fund from criminal fines, forfeited bail bonds, penalty fees, and special assessments collected by U.S. Attorney's Offices, U.S. Courts, and the Bureau of Prisons. State assistance programs use VOCA funds to provide or contract for services to victims of rape, drunk driving, child abuse, domestic violence, homicide, and other crimes. Victims of federal, as well as state crimes, are eligible to receive VOCA-funded services.

The investigation is continuing.

The investigation has been conducted by the agents from the Federal Bureau of Investigation, the Office of Investigations for the Office of Inspector General for the Department of Health and Human Services, the Food and Drug Administration's Office of Criminal Investigations and the Department of Defense's Defense Criminal Investigation Service. On the criminal side, the investigation and prosecution are being handled by Assistant U.S. Attorney Michael K. Loucks, Health Care Fraud Chief. On the civil side, the investigation and prosecution are being handled by Assistant U.S. Attorney Susan Winkler, assisted by Department of Justice Trial Attorney T. Reed Stephens. The Corporate Integrity Agreement was negotiated by Office of General Counsel, Office of Inspector General Assistant Counsel Mary Riordan.


Pharmaceutical Manufacturer to Pay $280 Million
to Settle False Claims Act Case

Department of Justice Office of Public Affairs FOR IMMEDIATE RELEASE Monday, December 20, 2010

WASHINGTON – Dey Inc., Dey Pharma L.P. (formerly known as Dey, L.P.) and Dey L.P. Inc. have agreed to pay $280 million to settle False Claims Act allegations, the Department of Justice announced today.   This settlement resolves claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products, knowing that federal health care programs relied on those reported prices to set payment rates.   The actual sales prices for the Dey products were far less than what Dey reported.   

 

The United States alleged that Dey reported false prices for the following drugs:   Albuterol Sulfate, Albuterol MDI, Cromolyn Sodium and Ipratropium Bromide.   The difference between the resulting inflated government payments and the actual price paid by health care providers for a drug is referred to as the “spread.”  The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government.  The government alleges that Dey created artificially inflated spreads to market, promote and sell the drugs to existing and potential customers.  Because payment from the Medicare and Medicaid programs was based on the false inflated prices, the government alleged that Dey caused false and fraudulent claims to be submitted to federal health care programs and, as a result, the government paid millions of claims for far greater amounts than it would have if Dey had reported truthful prices.

 

This is the fourth such settlement with pharmaceutical manufacturers that the Department of Justice has announced this month.   On Dec.7, 2010, the Department announced settlements totaling $421.1 million involving similar allegations against three other manufacturers: Abbott Laboratories Inc., B. Braun Medical Inc. and Roxane Laboratories Inc.  

 

“With this settlement, the Department of Justice has now recovered over $2 billion dollars from pharmaceutical manufacturers arising from similar unlawful drug pricing schemes.  As the department alleged in its complaint against Dey, by offering customers one price and then falsely reporting inflated prices to the lists the government uses when calculating how much to pay for the drugs, pharmaceutical companies created an incentive for the purchase of their drugs by allowing buyers to pocket the difference between the actual price of the drug and the inflated government payment,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.  “ Taxpayer-funded kickback schemes like this not only cost federal health care programs millions of dollars, they threaten to undermine the integrity of the choices health care providers make for their patients.”  

  

United States Attorney Carmen M. Ortiz of the District of Massachusetts said, “Our federally-funded health care programs pay for prescription drugs based in part on pricing information reported by pharmaceutical companies.  When a company reports falsely inflated prices for the purpose of increasing its sales and profits, it undermines the integrity of our health care system.  Drug companies must understand that they risk substantial liability if they report false drug pricing information.”

 

The settlement resolves a whistleblower action filed under the False Claims Act by Ven-A-Care of the Florida Keys Inc., a Florida home-infusion company, and its principals, entitled United States of America ex rel. Ven-a-Care of the Florida Keys   Inc. v.   Dey Laboratories, et al., Civil Action No. 05-11084-PBS (D. Mass).   The False Claims Act’s qui tam provisions allow private persons with knowledge of fraud to file suit on behalf of the United States and share in any recovery.   As part of this settlement, the Ven-A-Care whistleblowers will receive a share of approximately $67.2 million.

 

“This settlement with Dey highlights the Office of the Inspector General’s decade-long commitment to protecting against artificially inflated drug prices,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services.  “Our analyses of drug price reporting practices – including the use of ‘Average Wholesale Price’ – have consistently identified excessive Medicare and Medicaid payments resulting from these practices.”

 

The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts and the Office of Inspector General of the Department of Health and Human Services.

 

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.  

 


BAYER TO PAY $14 MILLION TO SETTLE CLAIMS FOR CAUSING PROVIDERS TO SUBMIT FRAUDULENT CLAIMS TO 45 STATE MEDICAID PROGRAMS

WASHINGTON, D.C.- Bayer Corporation has agreed to pay a total of $14 million to the

United States and 45 states to settle allegations under the federal False Claims Act that the company caused physicians and other health care providers to submit fraudulently inflated reimbursement claims to the state and federally funded Medicaid program, the Justice Department announced today. Bayer reached the agreement with the Justice Department, the United States Attorney's Office for the Southern District of Florida in Miami, the Office of Inspector General for the Department of Health and Human Services, and a team of state negotiators from Maine, Nevada, New York and Washington representing the National Association of Medicaid Fraud Control Units.

The government's investigation of the allegations, contained in a qui tam or whistleblower lawsuit, in which the government plans to intervene against Bayer, revealed that the pharmaceutical company beginning in the early 1990's falsely inflated the reported drug prices . referred to by the industry as the Average Wholesale Price (AWP), the Direct Price and the Wholesale Acquisition Cost . used by state governments to set reimbursement rates for the Medicaid program. By setting an extremely high AWP and, subsequently, selling the product to doctors at a dramatic discount, Bayer induced physicians to purchase its products rather than those of competitors by enabling doctors to profit from reimbursement paid to them by the government.

The Bayer AWPs, at issue in the investigation, involved several of Bayer's biologic products such as Kogenate, Koate-HP, and Gamimmune, which are widely used in treating hemophilia and immune deficiency diseases.

The investigation further revealed that the practice in which Bayer selectively engaged, commonly referred to by drug manufacturers as "marketing the spread," also has the effect of discouraging market competition from manufacturers that do not inflate AWPs as a way of inducing doctors to purchase their products.

In addition to the monetary settlement, Bayer has reached a five year agreement with the Department of Health and Human Services' Office of Inspector General that the company's conduct will be monitored by the government under a corporate integrity agreement. Under the compliance agreement, Bayer will provide the state and federal governments with the average selling prices of its drugs in order to facilitate the government's setting of fair reimbursement rates for the company's products and, potentially, the products of any competitors attempting to take advantage of Bayer's cooperation.

The parties also are settling allegations that Bayer knowingly underpaid the Medicaid program for rebates owed by it to the states. The Medicaid Rebate program requires drug companies to pay quarterly rebates to states in a way intended to account for discounts given by them to customers. Bayer was required to report to the Health Care Financing Administration the best price it offered to any commercial, for-profit customer and pay a quarterly rebate based, in part, upon that best price. Bayer understated the extent of the discounts given to certain customers thereby allowing the company to underpay the rebates its owed.

Ven-A-Care of the Florida Keys Inc., the qui tam relator or whistleblower which filed the suit on behalf of the United States, will receive 20 percent of the federal government's share of the recovery. Bayer's headquarters are located in Leverkusen, Germany.


ASTRAZENECA PHARMACEUTICALS LP PLEADS GUILTY TO HEALTHCARE CRIME; COMPANY AGREES TO PAY $355 MILLION TO SETTLE CHARGES

The United States Attorney’s Office for the District of Delaware, the Department of Health and Human Services Acting Principal Deputy Inspector General Dara Corrigan, Terrell L. Vermillion, Director, Office of Criminal Investigations, Food & Drug Administration, and SAIC Edward T. Bradley of the Northeast Field Office for the Defense Criminal Investigative Service announced that AstraZeneca Pharmaceuticals LP (“AstraZeneca”), a major pharmaceutical manufacturer headquartered in Wilmington, Delaware, today pleaded guilty in federal district court in Wilmington, Delaware to a healthcare crime and agreed to pay $355,000,000 to resolve criminal charges and civil liabilities in connection with its drug pricing and marketing practices with regard to Zoladex, a drug sold by AstraZeneca Pharmaceuticals LP and used primarily for the treatment of prostate cancer. The general components of the global agreement are as follows:

AstraZeneca pleaded guilty to conspiring to violate the Prescription Drug Marketing Act (“PDMA”) by causing to be submitted claims for payment for the prescription of Zoladex which had been provided as free samples to urologists. This criminal conduct caused losses of $39,920,098 to Medicare, Medicaid and other federally funded insurance programs. As part of the plea agreement, AstraZeneca agreed to pay a $63,872,156 criminal fine;

AstraZeneca agreed to settle its federal civil False Claim Act liabilities and to pay the U.S. government $266,127,844 to resolve allegations that the company caused false and fraudulent claims to be filed with the Medicare, TriCare, Department of Defense and Railroad Retirement Board Medicare programs as a result of AstraZeneca’s fraudulent drug pricing schemes and sales and marketing misconduct;

AstraZeneca agreed to settle its civil liabilities to the Medicaid program by paying to the United States and the states a total of $24,900,000 to resolve allegations that it caused false and fraudulent claims to be filed with the states as a result of its drug pricing and marketing misconduct and that it failed to provide the state Medicaid programs AstraZeneca’s best price for those drugs as required by law. The National Association of Medicaid Fraud Control Units has reached an agreement in principle to settle the state portion of these liabilities on behalf of the state Attorneys General; and

AstraZeneca has agreed to comply with the terms of a corporate integrity agreement which ensures, among other things, that AstraZeneca will report to the Medicare and Medicaid programs the average sale price for drugs reimbursed by those programs and will promote, through internal training and other programs and policies, marketing and sales practices that are in full compliance with the law.

Zoladex is marketed by AstraZeneca primarily for the treatment of prostate cancer, as is the drug Lupron which is produced by TAP Pharmaceuticals, Inc. (“TAP”). In October 2001, TAP agreed to pay $875,000,000 to resolve civil and criminal liabilities in connection with its pricing and marketing of Lupron.

While Medicare does not pay for most drugs needed by Medicare beneficiaries, Medicare covers some drugs, such as Zoladex, that must be injected under the supervision of a physician.

In documents filed with this case, the United States alleged that from January 1991 through December 31, 2002, Astra Zeneca engaged in the following conduct involving the marketing, sale and pricing of Zoladex for the treatment of prostate cancer:

(i) Employees of AstraZeneca provided thousands of free samples of Zoladex to physicians knowing and expecting that certain of those physicians would prescribe and administer the free drug samples to their patients and thereafter bill those free samples to the patients and to Medicare, Medicaid, and other federally funded insurance programs;

(ii) In order to induce certain physicians, physicians’ practices, and others to purchase Zoladex, AstraZeneca offered and paid illegal remuneration in various forms including free Zoladex, unrestricted educational grants, business assistance grants and services, travel and entertainment, consulting services, and honoraria;

(iii)Also in order to induce physicians to purchase Zoladex, AstraZeneca marketed a “Return-to-Practice” program to physicians. This Return-to-Practice program consisted of inflating the Average Wholesale Price (“AWP”) used by Medicare and others for reimbursement of the drug , deeply discounting the price paid by physicians to AstraZeneca for the drug (“the discounted price”), and marketing the spread between the AWP and the discounted price to physicians as additional profit to be returned to the physician’s practice from Medicare reimbursements for Zoladex;

(iv) AstraZeneca set the AWP for Zoladex at levels far higher than the majority of its physician customers actually paid for the drug. As a result, AstraZeneca’s customers received reimbursement from Medicare and state Medicaid programs and others at levels significantly higher than the physicians’ actual costs or the wholesalers’ average price; and

(v) AstraZeneca misreported and underpaid its Medicaid rebates for Zoladex used for treatment of prostate cancer, i.e., the amounts that it owed to the states under the federal Medicaid Rebate Program. AstraZeneca was generally required on a quarterly basis to rebate to each state Medicaid program the difference between the Average Manufacturer Price (“AMP”) and its “Best Price”. AstraZeneca falsely reported the Best Price for Zoladex used for treatment of prostate cancer because AstraZeneca calculated its Best Prices for Zoladex without accounting for off-invoice price concessions provided in various forms including cash discounts in the form of grants, services and free goods contingent on any purchase requirement.

The investigation commenced after the filing of a civil False Claim Act suit by Douglas Durand who was employed as the Vice President of Sales for TAP Pharmaceutical Products, Inc. The civil False Claims Act allows for private individuals like Durand to file a whistleblower suit to bring the government information about wrongdoing. Where persons submit, cause others to submit, or conspire to submit false or fraudulent claims to the United States government, the government is entitled to recover treble damages and $5,500 to $11,000 for each false or fraudulent claim. If the government is successful in resolving or litigating its claims, the whistleblower may share in the recovery by receiving from 15 to 25% of the amount recovered. As part of this settlement, Durand will receive a 17% share of the civil recovery pursuant to the False Claims Act whistleblower provisions. This amounts to approximately $47.5 million.

Prior to today’s guilty plea by AstraZeneca, three physicians have been charged, and two have pleaded guilty, for their role in conspiring to bill for Zoladex samples. Dr. Saad Antoun, a urologist practicing in Holmdel, New Jersey, was charged on January 15, 2002, and pleaded guilty to conspiracy on September 18, 2002. Dr. Stanley Hopkins, a urologist practicing in Boca Raton, Florida, was charged on September 30, 2002, and pleaded guilty to conspiracy on December 17, 2002. Dr. Robert Berkman, a urologist practicing in Columbus, Ohio, was charged on May 19, 2003.

“This prosecution of a pharmaceutical company demonstrates our resolve to protect federal health insurance programs when they are abused to enrich drug companies and doctors. We will pursue those whose criminal conduct imposes enormous expense on trust funds that the taxpayers fund to protect and preserve the health of our elderly, our poor, our military, and its dependents.” said Associate Attorney General Robert D. McCallum, Jr. of the United States Department of Justice.

"The public has been well served by the investigators who uncovered the extent of this scheme and brought it to an end," said Commissioner of Food and Drugs Mark B. McClellan, M.D., Ph.D. "FDA will not tolerate criminal conduct that exploits patients, plunders the national treasury, and adds to the cost of health care."

“Today's settlement shows that the federal government is holding the pharmaceutical industry strictly accountable for improper conduct as well as those who conduct business with them,” Department of Health and Human Services Acting Principal Deputy Inspector General Dara Corrigan stated. “The Office of Inspector General, along with our partners, will not tolerate this type of behavior, and we will continue to investigate allegations of illegal conduct concerning the pharmaceutical industry.”

"Today's plea and settlement demonstrates our strong commitment to protecting the American public from corporate greed, in whatever form that it may occur", said SAC Bradley. "This commitment extends to all participants in the many healthcare systems in this country, including our brave service men and women and their dependents. This case sends a strong message to the pharmaceutical industry that fraudulent activity, such as the scheme perpetrated by AstraZeneca, will not be tolerated and will be investigated and prosecuted to the full extent of the law."

The entire amount of the nearly $64 million criminal fine paid by AstraZeneca will go to the Department of Justice’s Crime Victims Fund. The Fund was established in 1984 by the Victims of Crime Act (“VOCA”) and serves as a major funding source for victim services throughout the country. Victims of federal as well as state crimes are eligible to receive VOCA-funded services, and state Assistance programs use VOCA funds to provide or contract for services to victims of rape, drunk driving, child abuse, domestic violence, homicide, and other crimes.

The investigation has been conducted by the Office of Inspector General for the U.S. Department of Health and Human Services, the Office of Criminal Investigations for the Food and Drug Administration, the Defense Criminal Investigative Service and the Federal Bureau of Investigation. On the criminal side, the investigation and prosecution are being handled by Assistant U.S. Attorney Beth Moskow-Schnoll. On the civil side, the investigation and prosecution are being handled by Assistant U.S. Attorney Virginia Gibson.

Original and Specialized Information of Fraud is Essential for Pharmaceutical Representative Whistleblower Lawsuits, Medical Device Sales Representative Whistleblower Lawsuits, Drug Marketing Whistleblower Lawsuits, and Medicare Marketing Fraud Lawsuits

As insiders it is common for pharmaceutical representative whistleblowers, medical device sales representative whistleblowers, drug marketing representative whistleblowers, and other marketing executives to specialized knowledge of drug price fraud schemes and fraudulent pricing schemes.  As such, it is important for the pharmaceutical representative whistleblower, medical device sales representative whistleblower, drug marketing representative whistleblower, or other marketing executive whistleblower that is interested in self protection and blowing the whistle on drug price fraud to obtain and preserve evidence of the drug pricing fraud.  Whether this evidence is in e-mail messages, memos, marketing plans, marketing materials, recordings, or other documents, it is important for the whistleblower to have evidence of the marketing fraud.  It is also often helpful to have fellow whistleblowers that can help build the Medicare Drug Price Fraud Lawsuit or Medicaid Drug Price Fraud Lawsuit.

Being the First to File on the Fraud is Essential for Recovery Under the False Claims Act and can Prevent Potential Criminal Liability in Pharmaceutical Representative Medicare Fraud, Medical Device Sales Representative Medicare Drug Price Fraud, Mediciad Drug Pricing Fraud, and other Medicaid Drug Fraud Lawsuits

It is also essential to not delay in coming forward with a False Claim Act Drug Price Fraud Lawsuit as the first whistleblower to file is eligible to be a relator and make a large recovery for exposing the fraud.  Additionally, when the fraudulent scheme is exposed, the people that kept the fraud secret can sometimes be found liable for criminal activity for not exposing the fraud that was being committed and further be held liable for continuing criminal activity.

Pharmaceutical Representative Whistleblower Protection, Pharmaceutical Executive Whistleblower Protection, Drug Marketing Whistleblower Protection, and Fraud False Claims Act Whistleblower Protections

It is also important to understand potential whistleblower protections under the False Claims Act and to discuss with an attorney how to prepare for potential retaliation or aggressive attacks by the employer or contractor.  For more information on this topic please go to the following web page on False Claims Act Lawsuit Whistleblower Protections

Pharmaceutical Company Drug Price Fraud Whistleblower Lawsuit Information, Drug Company False Drug Pricing Whistleblower Lawsuit Information, Pharmaceutical Executive Whistleblower Lawsuit Information, Medicaid False Drug Pricing Lawsuit Information, and Medicare False Drug Pricing Lawsuit Information

It is important that Accountants, Drug Executives, and Health Care Professions blow the whistle on Pharmaceutical Companies and Drug Companies that engage in schemes to report false and inflated prices for pharmaceutical products, knowing that federal healthcare programs rely on those reported prices to set payment rates are committing Drug Price Fraud.  These large drug companies are defrauding the United States Government out of millions or billions of dollars.  As a Texas Drug Price Fraud Lawyer, he works with other powerful qui tam lawyers that handle large Health Care Government Fraud cases.  He works with San Antonio Drug Price Fraud Lawyers, Dallas Fraudulent Drug Price Scheme Fraud Lawyers, Houston Medicare Drug Price Fraud Lawyers, and other Texas Health Care Drug Price Fraud Lawyers as well as with Health Care Average Wholesale Price and Drug Price Fraud Lawyers throughout the nation to blow the whistle on fraud that hurts the United States. 

If you are a drug marketing representative, drug marketing executive, medical device marketing representative, medical device marketing executive, medical doctor, or other pharmaceutical or medical device professional with original source knowledge of drug price fraud, it is important that you are the first to step forward to blow the whistle on the fraud.  If you are a pharmaceutical executive drug price fraud whistleblower that is aware of fraudulent drug price fixing, drug kickbacks, Medicaid drug price fraud, or other Medicare drug price fraud by a pharmaceutical marketing department, health care provider, or drug company, feel free to contact Medicare and Medicaid Drug Price Fraud Whistleblower Lawyer Jason Coomer via e-mail message or our submission form about a potential Medicare drug price fraud whistleblower lawsuit, Medicaid drug fraud whistleblower lawsuit, or other pharmaceutical executive drug fraud whistleblower qui tam lawsuit. 

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