The Department of Justice (“DOJ”) announced that it has reached an agreement with Almirall, LLC, formerly Aqua Pharmaceuticals, LLC, to settle a case alleging False Claims Act (“FCA”) violations in connection with sales and marketing practices. As part of the settlement, Almirall will pay a $3.5 million fine, but does not admit wrongdoing.
The FCA case involves sales and marketing activities related to three drugs – Monodox, Cordran and Acticlate – which are used to treat a range of dermatologic conditions, including acne, alopecia, dermatitis, lupus and eczema. The qui tam suit was initially brought by a former Almirall sales representative. The whistleblower alleged that the company used illegal kickbacks to bribe physicians to prescribe the three drugs. Specifically, the complaint alleged that Almirall provided physicians with in-office and out-of-office meals and other food, entertainment, trips, gift cards and gifts. In addition, Almirall allegedly engaged healthcare providers in speaking engagements, advisory boards, and consulting services in an attempt to induce the providers to prescribe the dermatology drugs.
In a statement, the DOJ noted that it is committed to ensuring that “pharmaceutical companies and prescribers … are not enriching themselves at the expense of patients’ well-being,” and that it intends to “protect the integrity of our health care programs.” The DOJ also thanked the whistleblower for coming forward, and noted that she would receive $735,000 as her share of the recovery in the case.
The DOJ investigation was conducted in cooperation with the US Department of Health and Human Services Office of Inspector General, the Defense Health Agency and the California Department of Insurance. The state of California separately agreed to accept $3.1 million to settle state law claims with similar allegations to the federal FCA case.
The whistleblower was represented by Brian McCormick of Ross Feller Casey, LLP in Philadelphia. Responding to the settlement, McCormick noted that the alleged illegal kickbacks “undermine the integrity of medical decisions, waste taxpayer funds and are unfair to competitors who play by the rules.” McCormick also lauded the DOJ attorneys and investigators, noting that they were “incredibly diligent in investigating the allegations.”
This is just the latest of many recent FCA suits the DOJ has brought against drug manufacturers involving illegal kickbacks. Given DOJ’s aggressive stance on the matter, compliance professionals should review sales and marketing practices to ensure that they do not run afoul of the FCA.