On Thursday, June 9, 2016, United States District Court Judge Denise L. Cote approved a settlement stipulation to resolve the Government’s claims against Salix Pharmaceuticals, a specialty pharmaceutical company based in Raleigh, North Carolina, that sells products used to treat various gastroenterology conditions. Salix is a subsidiary of Valeant Pharmaceuticals International, Inc.
The settlement resolves claims that Salix violated the federal Anti-Kickback Statute and False Claims Act by using its “speaker programs” as a mechanism to pay kickbacks to doctors to induce them to prescribe Salix drugs and medical devices that were reimbursed by federal health care programs from 2009 to 2013, predating its acquisition by Valeant. The Complaint-in-Intervention specifically alleged that Salix held sham speaker programs, oftentimes at high-end restaurants, where doctors were paid substantial sums to “educate” other doctors about a Salix product, but in reality spent little to no time discussing the product.
Settlement
The settlement maintains that Valeant will pay $54 million – broken down to $46,529,953.20 plus interest to the federal government and $7,470,046.80 to the States) to settle the civil charges mentioned above.
As part of the settlement, Salix admitted, acknowledged, and accepted responsibility for the following conduct:
- Throughout the Covered Period, speaker programs were an important part of Salix’s selling strategy, with approximately 10,000 speaker programs conducted during that time.
- Speaker payments ranged from $250 (for a doctor available on call to answer questions associated with a pre-recorded program) to $4,500 (for a doctor who spoke at an in-person program and had a specified level of experience and certain credentials). Salix paid over 500 individual physicians such honoraria during the Covered Period, with dozens of physicians earning over $50,000, and several even earning over $100,000.
- Throughout the Covered Period, Salix did not have effective mechanisms in place to adequately monitor its speaker programs to ensure compliance with internal policies.
- Throughout the Covered Period, Salix employees held speaker programs for the Covered Products that were primarily social in nature or did not otherwise comply with the company’s internal policies.
- With respect to pre-recorded speaker programs, there were numerous instances where either: the Salix sales representative did not play the pre-recorded presentation; the Salix sales representative played the pre-recorded presentation but placed the laptop or other viewing device in a location where it could not easily be seen (or at a volume where it could not readily be heard); and/or the designated approved speaker was not called at the end of the pre-recorded presentation, but still received their honorarium payment.
Valeant spokeswoman Laurie Little said the company is pleased to settle, and that the alleged conduct “involved personnel who are no longer with the company.”