Gilead to Pay $202 Million to Settle DOJ Claims Over Speaker Program Kickbacks
Headlines that Matter for Companies and Executives in Regulated Industries
Gilead to Pay $202 Million to Settle DOJ Claims Over Speaker Program Kickbacks
Gilead Sciences, Inc. has agreed to pay $202 million to resolve allegations brought by the US Department of Justice (DOJ) that it violated the False Claims Act (FCA) and Anti-Kickback Statute (AKS) by using sham speaker programs to induce health care providers to prescribe its human immunodeficiency virus (HIV) medications. The settlement, announced by the US Attorney’s Office for the Southern District of New York, resolves claims that from 2011 to 2017, Gilead paid health care professionals to attend and speak at events that were often more than social gatherings, with little or no educational content. The government alleged that these events, frequently held at high-end restaurants and venues, were used to reward high-prescribing physicians, and encourage further prescriptions of Gilead’s HIV drugs, including Truvada, Descovy, and Biktarvy.
According to the DOJ, Gilead’s speaker programs were a vehicle for providing improper remuneration, in violation of the AKS, and resulted in the submission of false claims to federal health care programs paid by Medicare, Medicaid, TRICARE, and the AIDS Drug Assistance Program. The resolution underscores the DOJ’s continued scrutiny of speaker programs, particularly when meals, entertainment, or honoraria are untethered from substantive scientific exchange.
The DOJ’s press release can be found here.
Jury Renders $136 Million Verdict Against Omnicare and CVS Health for FCA Violations
A federal jury, in the Southern District of New York, returned a verdict against Omnicare, Inc. and its parent company, CVS Health Corporation, finding them liable for violations of the FCA. Following a four-week trial, the jury found that the nation’s “largest long-term care pharmacy,” Omnicare, fraudulently billed Medicaid, Medicare, and TRICARE for more than three million false claims — equivalent to $135,592,814 in damages. The alleged misconduct related to Omnicare “dispensing drugs without valid prescriptions’ to disabled and elderly people in assisted and long-term care facilities.” The government alleged that Omnicare “rolled over” prescriptions — automatically refilling medications at set intervals — long after prescribers had stopped treating certain patients or after prescriptions had expired, resulting in thousands of claims to Medicare Part D and Medicaid for drugs that lacked a lawful basis. The jury also found CVS Health Corporation liable for contributing to the submission of these false claims.
Pursuant to the FCA, the government is entitled to three times the assessed damages plus statutory penalties, amounting to over $400 million. According to the DOJ, the verdict is “one of the largest damages verdicts rendered by a jury in a False Claims Act case.”
The DOJ’s press release can be found here.
The case is captioned, United States of America ex rel. Uri Bassan et al. v. Omnicare Inc., No. 1:15-cv-4179 (SDNY).
DOJ Files Sweeping Complaint Alleging FCA and AKS Violations Against Nations’ Largest Health Insurance Companies
On May 1, the United States filed a complaint against the nation’s largest health insurance companies, including Aetna Inc. and affiliates, Elevance Health, Inc., and Humana Inc., as well as three insurance broker organizations, namely eHealth, Inc., GoHealth, Inc., and SelectQuote Inc. The 213-page complaint was filed in the District of Massachusetts and alleges a far-reaching scheme where the insurers funneled “hundreds of millions of dollars” of off-book payments to the broker-defendants. The DOJ claims that the illegal kickbacks were disguised as “marketing,” “co-op,” or “sponsorship” payments, and were meant to induce the broker-defendants to steer beneficiaries toward the paying insurer’s Part C Medicare Advantage plan, “box out” competitors, and reduce enrollment of younger Medicare patients with disabilities. The complaint seeks treble damages under the FCA and civil penalties for each false or fraudulent claim.
The DOJ’s press release can be found here, and the complaint, captioned United States ex rel. Shea v. eHealth, et al., No. 21-cv-11777 (D. Mass.), can be found here.
Second Circuit Affirms Health Clinic Manager’s Reindictment and Sentence in Kickback and Tax Fraud Case
The United States Court of Appeals for the Second Circuit affirmed the district court’s judgment in the case of United States v. Aleksandr Pikus, upholding his 108-month sentence for conspiracy to receive and pay health care kickbacks and conspiracy to defraud the Internal Revenue Service. Pikus, who was originally indicted in 2016 for his role in a multi-million-dollar health care fraud and kickback scheme involving Medicare and Medicaid, argued on appeal that the charges should have been dismissed with prejudice due to violations of the Speedy Trial Act. The Second Circuit, however, found no abuse of discretion in the district court’s decision to dismiss the original indictment without prejudice, and allow the government to reindict Pikus on the same charges.
The court emphasized the seriousness of the offenses, which involved fraudulent claims to Medicare and Medicaid and the “concealment of illegal kickbacks through shell companies and false tax returns.” The appellate court also noted that, while there were procedural delays and administrative failures, there was no evidence of “bad faith or a pattern of neglect” sufficient to warrant dismissal with prejudice.
The case is captioned, United States v. Pikus, No. 24-1262-cr (2nd Cir. Ct. of Appeals).
Contacts
- Related Industries
- Related Practices