Pharmaceutical industry

A settlement has been reached in a whistleblower class action lawsuit brought against Abbott Laboratories Inc., B. Braun Medical Inc. and Roxane Laboratories Inc. n/k/a Boehringer Ingelheim Roxane Inc. They are accused of that engaging in a scheme to report false and inflated prices for numerous pharmaceutical products.

The whistleblowers will receive approximately $88.4 million.

This whistleblower case stemmed from numerous cases filed against these pharmaceutical companies, one case goes all the way back to 1997.  The United States allged that Abbott, Roxane and Braun 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 the defendants caused false claims to be submitted to federal healthcare programs, and as a result, the government paid millions of claims for far greater amounts than it would have if Abbott, B. Braun and Roxane had reported truthful prices. 

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 gets reimbursed by the government.

A settlement has been reached in a whistleblower class action lawsuit brought against Novartis Vaccines & Diagnostics Inc and Novartis Pharmaceuticals Corporation. They are accused of causing false claims to be submitted to federal health care programs.

According to the settlement, the United States will receive $43.5 million to resolve the federal claims, and the states will receive $29 million to settle their respective claims. The whistleblowers will receive $7.825 million of the federal share of the settlement announced today.

The original lawsuit was filed in October 2006.  The United States alleged that, between Jan. 1, 2001 and July 31, 2006, Novartis and its predecessor, Chiron Corporation, caused false claims to be submitted to federal health care programs for certain off-label uses of the cystic fibrosis drug TOBI.

The Food and Drug Administration (FDA) approved TOBI, an inhaled antibiotic, for the treatment of certain cystic fibrosis patients. The United States alleges that Chiron, and then Novartis, marketed TOBI for unapproved uses, such as diseases other than cystic fibrosis, and for cystic fibrosis patients who did not meet the parameters of the FDA-approved indication and for which TOBI was not a medically accepted use. The government alleges that this conduct caused the submission of false claims to federal health care programs.

A settlement has been reached in a whistleblower class action lawsuit brought against Sanofi-Aventis U.S. Inc. and Sanofi-Aventis U.S. LLC (Sanofi US).  They are accused of giving physicians free units of Hyalgan, a knee injection, in violation of the Anti-Kickback Statute, to induce them to purchase and prescribe the product and submitting false average sales price (ASP) reports for Hyalgan that failed to account for free units distributed contingent on Hyalgan purchases. 

The whistleblower will receive a $18.5 million share of the government’s recovery.

The whistleblower case was originally filed in 2010.  The government's allegations were that Sanofi US  provided its sales representatives with thousands of free “sample” Hyalgan units and trained its sales representatives to market the “value add” of these units to physicians. In practice, the United States alleges, Sanofi US sales representatives often entered into illegal sampling arrangements with physicians, using the free units as kickbacks and promising to provide negotiated numbers of them in order to lower Hyalgan’s effective price. The government contends that there were numerous such arrangements, including:

• A Southern California-based Sanofi US sales representative who allegedly provided 25 Hyalgan samples to a physician practice for every 100 Hyalgan units purchased, and who supplemented these kickbacks by regularly treating the entire practice to lavish dinners at Sanofi US’s expense and with Sanofi US’s approval.
• A New York-based Sanofi US sales representative who allegedly provided 12 Hyalgan samples to a physician practice for every 50 Hyalgan units purchased, and whose manager supplemented these kickbacks by treating the practice, along with friends and family members, to a lavish dinner in Manhattan at Sanofi US’s expense and with Sanofi US’s approval.
• A Central Texas-based Sanofi US sales representative who allegedly promised a physician practice 125 free Hyalgan syringes in exchange for a purchase of 500 Hyalgan units and was lauded by Sanofi US’s Texas sales team for “[u]tiliz[ing] samples to provide value for the office.”

The United States contends that price was important to physicians because Hyalgan and its direct competitor were reimbursed at the same, fixed rate by Medicare and other insurers. Thus, the less expensive option afforded a greater reimbursement “spread,” or profit, to physicians’ practices. According to the government’s allegations, Sanofi US chose not to compete by lowering the actual invoiced price of Hyalgan, for fear of setting off a price war with its competitor that would lead to a “downward spiral” in prices and reimbursements. Instead, the government alleges, Sanofi US surreptitiously lowered the effective price of Hyalgan by promising the free units to doctors who agreed to purchase the product. The government alleges that Medicare and other federal health care programs paid millions of dollars in kickback-tainted claims for Hyalgan.