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Drug company accused of illegal kickbacks, settles with DOJ

The Department of Justice (DOJ) accused a large drug company of paying kickbacks to medical professionals to encourage the physicians and nurse practitioners to prescribe their medications. The DOJ’s has accused the company of using kickbacks to encourage the prescription of a powerful, opioid pain medication approved by the Food and Drug Administration for cancer patients for the treatment of persistent pain for non-covered uses.

What led to the allegations of illegal kickbacks? The DOJ is cracking down on the abuse of permissible activities to fuel fraudulent kickbacks. In this case, the government accused the drug manufacturer of using sham speaker programs and paying medical professionals thousands of dollars for seminars that never happened or only involved the drug company’s staff or people with no legitimate reason to attend the session to support allegations of violations of the Anti-Kickback statute by knowingly causing Medicare, Medicaid and other federal benefit programs to pay millions for non-covered use of this dangerous medication.

The DOJ also used evidence of the drug company’s use of lavish meals and entertainment to further entice physicians and nurse practitioners to prescribe their medication as additional support of violation of the statute.

Is the settlement agreement the end? In this case, the settlement with the DOJ is just the beginning. The drug company still faces claims from state and consumer protection groups. Former officers and employees of the drug company also face allegations of criminal wrongdoing.

Facing allegations of a kickback violation from the DOJ? There are two lessons anyone facing similar allegations can learn from this case. First, the government continues to crackdown on the abuse of permissible activities like the use of lavish meals and entertainment as a form of illegal kickback. Second, it is possible for additional claims to arise. Those facing allegations can reduce the risk of additional claims and better ensure their rights are protected by seeking legal counsel.  

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