Gilead Sciences recently was on the receiving end of two final judgments to the tune of $175.2 million. The judgments follow Gilead’s lawsuits against multiple defendants – including healthcare clinics, pharmacies, prescribers, and lab testing facilities – for allegedly abusing its preexposure prophylaxis access program.
According to Gilead’s complaint, the companies fraudulently enrolled patients into Gilead’s access program and then resold the company’s free PrEP drugs. The companies also allegedly performed fake wellness checks on patients and used their credentials to improperly write prescriptions. Some of the defendants also allegedly distributed medications without package seals as mandated by the United States Food and Drug Administration (FDA), safety instructions, or warnings, and asked pharmacists to violate label instructions and dispense returned drugs to another patient for a second reimbursement for the same bottle of prescription drugs.
Additionally, while the access program reimbursed the companies at wholesale acquisition price, some of the defendant clinics purchased the drugs at discounted 340B prices. Gilead alleged that it lost tens of millions of dollars through the fraud.
2023 Judgments
In March 2023, United States District Judge Aileen M. Cannon ruled that Baikal Marketing Group and its executives must pay $131.4 million as the result of a final default judgment, finding that Gilead plausibly alleged violations of both the federal and Florida RICO Acts. In Florida, a final default judgment can be filed against a party that does not adequately respond to a complaint.
Judge Cannon found that Gilead paid $43.8 million for more than 21,900 reimbursements through the conspiracy and as such, they are entitled to treble damages as permitted by law, resulting in the $131.4 million final judgment.
“We are pleased with the judge’s order, and it supports our efforts to continue to make sure our free drug program is available to the people who need it,” a Gilead spokesperson said. “Gilead will continue to monitor and take appropriate action to protect public safety and deter those who seek to exploit the integrity of the program.”
Judge Cannon also ordered Priority Health Medical Center and one of its executives, Nick Myrtil, to pay $43.8 million for similar allegations. These damages are not susceptible to treble damages as Judge Cannon found that the first amended complaint were improperly served on those defendants. The first amended complaint was the first complaint in which the RICO counts were asserted.
Other Settlements
These judgments are in addition to the $33 million settlement Gilead reached with Well Care and some its executives and another “kingpin” defendant for an undisclosed amount. Most of the defendants who have reached a settlement or judgment are barred from participating in Gilead’s access program.