Aspen Pharmacare a large pharma company in South Afruca was fined nearly $5.5 million by the Italian antitrust authorities for stopping its supplies of cancer drugs to strengthen its negotiation position to boost prices by as much as 1500 percent. ASpen bought drugs from GlazoSmithKline and then began negotiation with the Italian Medicines Agency on prices on drugs including Leukeran and Alkeran. The drugs temporarily disappeared from the market and Aspen was able to raise prices by 300-1500 percent. Patents on the drugs had expired according to the written ruling.

Aspen is apparently the only supplier of these kinds of cancer treatments in the Italian market. Regulators fined the company after complaints were raised from a consumer group, which had been contacted by patients complaining about shortages of the medicines. In this country, it has been suggested that pharma companies have also created shortages of badly needed medications to increase their bargaining power to set prices higher. Congress is looking into this matter.

Jeffrey Newman represents whistleblowers

In October 2012, Jose Antonio Elena Rodriguez, a 16-year-old Mexican boy, was walking on a road meters from the Arizona border when a U.S. Border Patrol agent on the U.S. side shot and killed him. A federal court will soon decide whether a foreign national bring claims under the U.S. Constitution for an incident that happened on foreign soil? There is an expanding effort by immigration advocates to define rights of aliens under our Constitution.

The U.S. government and Jose’s mother agree the shooting wasn’t justified and The Justice Department has charged the agent with second-degree murder. He has pleaded not guilty.

Justice Department lawyers argue extending the Fourth Amendment into sovereign Mexican territory “would cast a cloud of legal uncertainty over every action taken by the U.S. government abroad.” At minimum, the government argues, a foreign plaintiff must have a “significant voluntary connection” to the U.S.

An organization called Lower Drug Prices for Consumers has filed an interesting case against Allergan and Forest Labs involving Allergan/Forrest Labs U.S. Patent No. 6,545,040 that is listed in the FDA Orange Book as covering the drug Bystolic.  The basic false claims argument is that the market price of Bystolic is high because of the patent coverage but the patent is (allegedly) invalid.  If true, this means that Medicare, Medicaid, and the VA hospitals are all paying more than they should for the drug.  As stated by the complaint: “The current market price for Nebivolol (Bystolic) is a false price because the ‘040 patent is invalid.”

The interesting thing is that the whistleblower in this False Claims Act case appears to be a branch of the hedge fund Foxhill Capital. Foxhill’s Founder and Chief INvestment Officer is Neil Weiner  who touts his  “multi-cyclical experience based on more than 25 years managing hedge funds with expertise encompassing distressed, high yield, capital structure, convertible, and option strategies.” According to his site,  Prior to founding Foxhill in 2005, Neil was a Managing Member/Co-Portfolio Manager at Triage Capital Management from 2000 to 2005. He was instrumental in managing the $1 billion distressed/special situations fund, attracted institutional investors, creating a substantial growth in assets.  Prior to joining Triage, Neil was a Managing Director/Portfolio Manager at LibertyView Capital Management from 1992 to 2000.  Neil was responsible for the several funds with a focus on credit-related and volatility-related strategies and was also a member of the firm’s Executive Committee.   Previously, Neil was a sell-side equity analyst at Salomon Brothers.

The False Claims Act provides special incentives for whistleblowers to uncover fraud against the U.S. Government.  The Act authorizes the whistleblower to file a qui tam lawsuit on behalf of the Government and then receive a cut of any recovered damages. See 31 U.S.C. §§ 3729–3733.  The whistleblower here LDPFC appears to be a branch of the hedge fund Foxhill Capital.

 Wells Fargo has come under investigation by The California Department of Justice on allegations of criminal identity theft over its creation of millions of unauthorized accounts. This was learned from  a search warrant issued to the bank’s San Francisco headquarters this month. The warrant was obtained by the New York Times  and it included demands that the bank turn over a documents, including the identities of California customers who had unauthorized accounts opened in their names, information about fees related to those accounts, the names of the Wells Fargo employees who opened the accounts, the names of those employees’ managers and emails or other communication related to those accounts. Documents filed along with the search warrant argue that there is probable cause to believe Wells Fargo violated two sections of the state penal code concerning types of impersonation, the other outlawing the unauthorized use of personal information. Both violations can be charged as felonies, punishable by imprisonment for more than a year.

Along with investigations by Harris’ office and federal prosecutors, Wells Fargo is also under investigation by the federal Department of Labor, an outside law firm hired by the bank’s board and two congressional committees.


Jeffrey Newman represents whistleblowers

The Securities and Exchange Commission has fimed Ernst & Young, one of the Big 4 global audit firms ,  to pay $11.8 million—$1 million fines and $10.8 million in audit fee give-backs plus interest. The fine was for failing to recognize allegedly false financials issued by Weatherford  International from between 2007 and 2012 that inflated its earnings by more than $900 million in total, according to the SEC. The company allegedly misled investors about its earnings per share, effective tax rate and other key financial information. Two of its executives were also charged. The SEC collected a $140 million fine in September from Weatherford and its executives. EY paid total fines of $9.3 million to the SEC in September for audit partners that got too close to key clients at two public companies, the SEC alleged.

Last year, Grant Thornton was fined $3 million for ignoring red flags and fraud risks while conducting deficient audits of two publicly traded companies.

The SEC said Fronckiewicz and Adams repeatedly engaging in improper professional conduct during the audits and quarterly reviews, relying on Weatherford’s unsubstantiated explanations for post-year end accounting adjustments each year instead of verifying the information. Fronckiewicz and his team failed to find out why the company was experiencing a huge unexplained income tax receivable that grew to over $400 million by year-end 2010, the SEC said.

Omnicare Inc., the nation’s largest nursing home pharmacy,will pay $28.125 million to settle allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription anti-epilpetic drug, Depakote, for nursing home patients.

Nursing homes rely on consultant pharmacists, such as those employed by Omnicare, to review their residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents.   According to the government’s complaint, Abbott allegedly made payments to Omnicare described as “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend Depakote.  For example, Omnicare allegedly solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its “Re*View” program.  Although Omnicare claimed that Re*View was a “health management” and “educational” program, the complaint alleges that it was simply a means by which Omnicare solicited kickbacks from pharmaceutical manufacturers in exchange for increasing the utilization of their drugs on elderly nursing home residents.  In internal documents, Omnicare allegedly referred to Re*View as its “one extra script per patient” program.  The complaint also alleges that Omnicare entered into agreements with Abbott by which Omnicare was entitled to increasing levels of rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident.  Finally, the complaint alleges that Abbott funded Omnicare management meetings on Amelia Island, Florida, offered tickets to sporting events to Omnicare management and made other payments to local Omnicare pharmacies.

In May 2012, the United States, numerous states and Abbottentered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including Omnicare and PharMerica Corp.  In October 2015, PharMerica agreed to pay $9.25 million to the United States and numerous states to resolve civil liability under the False Claims Act for the alleged kickbacks from Abbott.

Forcerank The operator of a mobile phone app that allowed users to make “fantasy stock” picks has been charged with illegally offering security-based swaps.

The Forcerank app is a“fantasy sports for stocks,” offering contestsfor players ranking a group of stocks or exchange traded funds based on expected performance over the upcoming week. But the  U.S. Securities and Exchange Commission says the games violated provisions of the Dodd-Frank financial reforms that were intended to ensure information about a swap offering is fully transparent to retail investors and swaps are limited to platforms subject to the highest level of regulation.

The  SEC rejected Forcerank LLC’s claims that its games were merely a “skill-based contest,” finding the company failed to file a registration statement for what constituted a security-based swap offering and failed to sell its contracts through a regulated exchange.

Two  radiologists have filed a federal whistleblower lawsuit accusing Bozemen Health Deaconess Hospital of illegally conspiring to maintain its monopoly on radiology services, leading to fraudulent bills being submitted to Medicare and Medicaid.

Frank Rembert and Michael Page allege that Intercity Radiology — which contracted with the hospital in 2002 wanted to open an outpatient imaging center, to competed with the hospital for patients. The center would have offered lower prices, better office hours and faster service in a more convenient location, the lawsuit says. The lawsuit accuses the hospital of creating a joint venture with Intercity Radiology and agreed to refer patients to the joint venture in exchange for millions of dollars in kickbacks. The hospital owned 77.5 percent of the joint venture, called Advanced Medical Imaging, the lawsuit said. The hospital’s partnership with Intercity Radiology included a clause that prevented its employees from participating in any other outpatient imaging center.

The resulted in millions of dollars in fraudulent claims being paid to the hospital and AMI by Medicare, Medicaid and other federal health care programs, according to the lawsuit.

Recently I wrote about how a 2003 law passed by Congress prohibits Medicare from negotiating with drug makers on the price of the medications purchase. Medicaid does it. Because the response to this was significant, I have more to say on the topic.

  1. Medicare Part D premiums will increase 13 percent and in addition, Part D plans are increasingly placing high priced meds on special tiers requiring patients to pay as much as 33 percent of the cost of meds.
  2. Health and Human Services has much more negotiating power than the Part D plans;

GoFundMe has created an internet web page to pay legal fees and costs for any person who leaks tapes of Donald Trump saying disparaging or offensive comments during the time he worked on NBC’s reality series, The Apprentice.

“Someone out there is likely in possession of a piece of evidence that could be used to substantiate what many folks have always believed,” the GoFundMe page states. “This country needs that person to come forward and ensure that we all know the truth that is out there.”

The page has been named the “Trump Sunlight Campaign,” because “sunlight after all, is said to be the best disinfectant.”