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Pharmaceutical Company To Pay $17.5M To Resolve Allegations Of Kickbacks

US WorldMeds LLC headquarters in Louisville, Kentucky.
US WorldMeds LLC headquarters in Louisville, Kentucky. Photo Credit: Google Maps

In a case that originated with the filing of whistleblower lawsuits in Connecticut, a pharmaceutical company has agreed to pay $17.5 million to resolve allegations of kickbacks to Medicare patients and physicians.

US WorldMeds LLC, based out of Louisville, has agreed to the settlement after it was determined they were paying kickbacks to improperly induce prescriptions of its drugs, Apokyn and Myobloc, U.S. Attorney John Durham announced this week.

Durham said that Congress included copay requirements in the Medicare program, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. 

Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering, directly or indirectly, any remuneration — which includes paying patients’ copay obligations — to induce Medicare patients to purchase the company’s drugs.

US WorldMeds substantially increased the price of Apokyn in January 2012, which resulted in an increase to Medicare patients’ copays.

It is alleged that from the time of the price increase through June 30, 2015, US WorldMeds illegally paid Medicare patients Apokyn copays through a third-party foundation. The United States alleged that those payments represented illegal inducements to patients in violation of the Anti-Kickback Statute and False Claims Acts.

US WorldMeds also allegedly paid kickbacks to two physicians to encourage them to prescribe Apokyn and Myoblock. Those doctors were paid “excessive speaking and consulting fees and provided impermissible entertainment, such as lavish meals, private plane ride and all-expense paid trips with their spouses, including some to the Kentucky Derby.

“Pharmaceutical companies and other healthcare providers that pay kickbacks to patients and physicians to improperly induce drug prescriptions drive up the costs of health care and divert critical resources from the Medicare program,” Durham said. “This case originated with the filing of whistleblower lawsuits currently pending in the District of Connecticut, and the whistleblowers will be handsomely rewarded for exposing this scheme. We encourage all individuals who are aware of fraud against the government to come forward. The Connecticut U.S. Attorney’s Office will continue to pursue companies and providers that defraud federal health care programs.”

The False Claims Act allegations were originally brought in lawsuits filed by whistleblowers. They will receive a $3.15 million as their share of the recovery.

“Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars,” Phillip Coyne, Special Agent in Charge of the Office of the Inspector General of the U.S. Department of Health and Human Services said.

“We will continue to hold pharmaceutical companies accountable for subverting the charitable donation process in order to circumvent safeguards designed to protect the integrity of the Medicare program. Simply put, OIG’s goal is to ensure that patients receive the appropriate treatments and therapies according to their medical needs, without the corrupt or profit-driven influence of drug manufacturers.”

Assistant Attorney General Jody Hunt added, “the Department of Justice is committed to ensuring that physicians’ and patients’ selection of medications is not influenced by improper financial considerations. “The nation’s health care programs and taxpayers deserve health care companies that play by the rules, including the Anti-Kickback Statute.”

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