Articles Posted in Pharmaceutical fraud

IMG_0265-1-300x200Dr. Michael Lee Cummings, of Albany Kentucky, was sentenced to 30 months in prison, as well as three years of supervised release and a $400,000 fine after pleading guilty to 13 counts of illegally prescribing controlled substances. The investigation of Cummings began in 2015 after it was found that many of his patients had died in overdose-related deaths.

Cummings ran a family practice in Albany, Kentucky for several years. Yet, from 2009 to 2014, Cummings was the in the top 1% of primary care prescribers of opioids in all of Kentucky. These opioids primarily included Oxycodone, hydrocodone, and benzodiazepines. Throughout these years, Cumming prescribed hundreds of thousands of opioids without a legitimate medical purpose. According to the Department of Justice, Cummings prescribed enough opioids in one year alone to provide every man, woman, and child in Albany with 230 hydrocodone pills, 134 Oxycodone pills, and 178 benzodiazepine pills.

In 2015, a Kentucky Board of Medical Licensure expert discovered that many of Cumming’s patients were being treated below an acceptable standard of care. That same year, the Clinton County Coroner found that many of the individuals who suffered overdose deaths were former patients of Cummings.

Pharmaceutical drugmaker Novartis announced it has set aside $700 million for a possible settlement of a Department of Justice lawsuit in which it is charged that the company paid hundreds of millions of dollars in kickbacks to doctors to induce them into prescribing drugs to patients to boost their sales. It is not clear as to whether $700 million will be sufficient to resolve the long running case in which the wrongdoing alleged took place between 2002 and 2011 and involves assertions of hundreds of millions in kickbacks to prescribers in the form of lavish meals and entertainment.

The Department of Justice has filed a complaint in the U.S. District Court for the Southern District of New York following a lawsuit originally filed under the whistleblower provisions of the False Claims Act. The case was brought by a former Novartis sales representative, Oswald Bilotta.

In U.S. ex rel. Bilotta v. Novartis Pharmaceuticals, the government asserts Novartis paid hundreds of millions of dollars of kickbacks to prescribers.The government further alleged Novartis sponsored “sham” educational programs at high-end restaurants between 2002 and 2011 that, in actuality, were intended to entertain doctors to induce them to prescribe Novartis drugs.

IMG_0299-300x200Heritage Pharmaceuticals Inc., a New Jersey-based company, has been ordered to pay more than $7 million after being charged with conspiring with its competitors to fix prices, rig bids, and allocate customers.

According to the Department of Justice, Heritage Pharmaceuticals Inc. was part of an antitrust conspiracy which involved several other companies and leaders in the pharmaceutical space. This conspiracy took place from 2014 to 2015 and had the shared goal of fixing the prices of a medication that is used to treat diabetes.

In addition to the $7 million that Heritage Pharmaceuticals Inc. will have to pay as part of a civil claim, they will also have to pay a $225,000 criminal penalty and cooperate with a criminal investigation that remains open. The $7 million fee will resolve allegations against the company that fall under the False Claims Act since it allegedly violated the Anti-Kickback Statute.

CEO and CFO Will Face Time in Prison Following Massive Pharmaceutical Scheme Resulting in Millions of Stolen Funds

Guaranteed Returns, a reverse pharmaceutical distributor, and the company’s senior management have been convicted in trial following allegations of wire fraud, mail fraud, obstruction of justice, theft of government property, money laundering, and false statements as part of a massive pharmaceutical scheme. 

Dean Volkes, the company’s CEO and sole owner, operated the reverse pharmaceutical distributor, which was responsible for returning expired prescriptions to various healthcare providers. These providers included hospitals, pharmacies, and even facilities owned by the Department of Defense, which allow certain prescriptions to be returned for a refund. Guaranteed Returns handled the return process on behalf of the healthcare providers’ clients, requiring a fee determined by each drugs’ refund value. 

opioid-300x200Opioid manufacturer Insys Therapeutics  will pay $225 million to resolve civil and criminal complaints stemming from  Insys’s payment of kickbacks and other unlawful marketing practices in connection with the marketing of Subsys. Insys’s drug Subsys is a sublingual fentanyl spray, a powerful, but highly addictive, opioid painkiller. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving, and tolerant to, around-the-clock opioid therapy.
Today, the U.S. Attorney’s Office for the District of Massachusetts filed an Information charging Insys and its operating subsidiary with five counts of mail fraud. According to the charging document, from August 2012 to June 2015, Insys began using “speaker programs” purportedly to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners. However, the programs were actually used as a vehicle to pay bribes and kickbacks to targeted practitioners in exchange for increased Subsys prescriptions to patients and for increased dosage of those prescriptions. One practitioner targeted by Insys was a physician’s assistant who practiced with a pain clinic in Somersworth, New Hampshire. During the first year that Subsys was on the market, the physician’s assistant did not write any Subsys prescriptions for his patients. In May 2013, the physician’s assistant joined Insys’s sham speaker program knowing that it was a way to receive kickbacks for writing Subsys prescriptions. After joining the sham speaker program, the physician’s assistant wrote approximately 672 Subsys prescriptions for his patients – many of which were medically unnecessary – and in turn, received $44,000 in kickbacks from Insys.

As part of the criminal resolution, Insys agreed to a detailed statement of facts outlining its criminal conduct with respect to the illegal marketing of Subsys. Insys will enter into a five-year deferred prosecution agreement with the government, while Insys’s operating subsidiary will plead guilty to five counts of mail fraud pursuant to the plea agreement that will be filed in the District of Massachusetts. According to the terms of the criminal resolution, Insys will pay a criminal fine of $2 million and forfeiture of $28 million. The Court has not yet scheduled the plea hearing. Last month, five former Insys executives were convicted after trial of racketeering conspiracy in connection with the marketing of Subsys. In total, eight company executives have now been convicted in Boston for crimes relating to the illegal marketing of Subsys.

IMG_0004-300x200Nabil Fakih, a licensed pharmacist, Michigan Board of Pharmacy member, and owner of a Dearborn Heights drug store, was charged with healthcare and wire fraud and indicted by a grand jury. The Indictment accused Fakih of wrongfully taking millions of United States dollars from Medicare, Medicaid and Blue Cross Blue Shield (BCBS), dating back to 2011.

According to the indictment, Fakih is accused of falsely submitting claims on behalf of Dial Drugs. He was reported to be overbilling Medicaid and Medicare by $569,670 while overcharging BCBS by $558,079.

Fakih and others billed insurance companies for prescription drugs such as the antipsychotic medication, clozapine, and the sedative alprazolam. Claims for these drugs were on behalf of people who had died prior to the claimed date of delivery. This is according to government allegations.

The Securities and Exchange Commission today announced that Paris-based pharmaceutical company Sanofi has agreed to pay more than $25 million to resolve charges that its Kazakhstan and the Middle East subsidiaries made corrupt payments to win business.

According to the SEC’s order, the schemes spanned multiple countries and involved bribe payments to government procurement officials and healthcare providers in order to be awarded tenders and to increase prescriptions of its products. In Kazakhstan, distributors were used as part of a kickback scheme to generate funds from which bribes were paid to officials to ensure that Sanofi was awarded tenders at public institutions. The kickbacks were tracked in internal spreadsheets where they were coded as “marzipans.” In the Middle East, various pay-to-prescribe schemes were used to induce healthcare providers to increase their prescriptions of Sanofi products. The company said in its 2012 annual report, released in March 2013 it received information about potential improper payments linked to drug sales in two emerging markets. Sanofi said at the time it was looking into whether the payments were made, and if so, whether they violated the Foreign Corrupt Practices Act. The 1977 law forbids bribing foreign officials to win, or keep, a business advantage.

“Bribery in connection with pharmaceutical sales remains as a significant problem despite numerous prior enforcement actions involving the industry and life sciences more generally,” said Charles Cain, FCPA Unit Chief, SEC Enforcement Division. “While bribery risk can impact any industry, this matter illustrates that more work needs to be done to address the particular risks posed in the pharmaceutical industry.”

Pharmaceutical company AstraZeneca will  pay $110 million to the state of Texas to settle lawsuits alleging that the company falsely and misleadingly marketed two of its drugs in violation of the Texas Medicaid Fraud Prevention Act. AstraZeneca was accused of engaging in false and misleading marketing schemes at a time when the company was under the strict obligations of a 2010 federal “corporate integrity agreement” resulting from prior allegations of Medicaid fraud. The federal agreement prohibited Astra Zeneca from promoting its antipsychotic medication Seroquel and cholesterol-lowering statin drug Crestor for uses not approved by the FDA, but Texas alleged the company continued to do so anyway. Such illegal pharmaceutical promotion is commonly referred to as “off-label marketing.”

AstraZeneca allegedly promoted its  antipsychotic drug to Texas Medicaid providers, who primarily treated children and adolescents when those drugs were not approved as safe and effective for use in that vulnerable population. Attorney General Paxton’s office accused AstraZeneca of making hundreds of thousands of dollars in illegal payments to two former state hospital doctors to unduly influence the use of Seroquel in the state hospital system.

The company was also accused of a similar nationwide marketing fraud scheme involving Crestor, including allegations that AstraZeneca executed a plan of deception targeted directly at Texas Medicaid to expand the use of the statin beyond what the science supported, while downplaying a significant risk of diabetes in certain patients.

pharmacy-fraud-300x200Massive Pharmacy Fraud Scheme Involved Bribes for Patient Information

A Florida man was sentenced to 15 years in prison for pharmacy fraud that involved $100 million in scams. The wide-reaching scheme impacted private insurance companies, and Medicare and TRICARE.

The Pharmacy Fraud

addictionMost people are aware that there is a serious Opioid crisis in America. But how many people know that the company who makes OxyContin, the highly addictive painkiller, is owned by a single family who has reaped billions of dollars of profits?

To say that the Sackler family has an impressive roster of monuments to their wealth would be an understatement. The Sackler family has had entire museums, wings, labs, stairways, and courtyards erected in their name.

From buildings and monuments to philanthropy, the Sackler name is everywhere, but the family itself is hardly ever seen.  In 2015 Forbes magazine added the family to the list of America’s richest families.  The billionaire family is descended from Mortimer and Raymond Sackler, two psychiatrist brothers from Brooklyn. Consisting of about 20 members, Forbes cited their wealth at a low-ball of 14 billion dollars. The family never comments publicly on the source of all that wealth – and that’s not a surprise. Most of their wealth came from sales of the narcotic painkiller, OxyContin. Since 1966 when the drug began being sold by the American branch of the Sackler’s pharmaceutical empire, Purdue Pharma, more than 200,000 people have died from overdoses on OxyContin and other painkillers.