Today, Nolan Auerbach & White announces the successful resolution of its client’s five-year-long civil False Claims Act case against Daiichi Sankyo. The qui tam case was brought in March 2010 by client Kathy Fragoules, a former Daiichi Sankyo sales representative. Ms. Fragoules alleged that Daiichi Sankyo had various programs utilized by its sales representatives to induce physicians to use its pharmaceuticals, including Welchol, Azor, Benicar, and Benicar HCT. According to her qui tam complaint, these inducements caused physicians to prescribe Daiichi Sankyo pharmaceuticals for government healthcare program beneficiaries in violation of the Anti-Kickback Statute. Daiichi Sankyo has agreed to pay $39,015,770 plus interest to resolve Ms. Fragoules’s qui tam lawsuit.
Nolan Auerbach & White’s client alleged in her qui tam complaint, inter alia, that Daiichi Sankyo started a program in 2005 called “Physician Opinion Discussions” (or “PODs”), in which sales representatives targeted high decile physicians to be POD speakers to small groups of 3 or more fellow physicians. In fact, the complaint alleged, the only qualifications to lead a POD were that the physician be a high decile physician. According to the complaint, all physicians in the POD eventually were able to lead their POD, up to five times per year, with physician leaders receiving $500 or more per session. The complaint, which describes the scheme in detail, concluded that the PODs were for one purpose: to increase prescriptions.
“Kickbacks cloud the medical judgment of healthcare providers,” explained former federal prosecutor and Nolan Auerbach & White managing partner Marcella Auerbach. “Qui tam actions play an important role in removing such distractions from the doctor-patient relationship.”
The False Claims Act allows private citizens with detailed knowledge of fraud to bring an action on behalf of the government and to assist in the recovery of the government’s stolen dollars. The statute allows the government to recover three times the amount it was defrauded, in addition to civil penalties of $5,500 to $11,000 per false claim. Successful whistleblowers can receive between 15 and 30 percent of the governments’ recovery.
Daiichi Sankyo will pay the federal government $34,015,770 plus accrued interest to settle the federal False Claims Act allegations. The participating States will receive $5,000,000 plus accrued interest as a result of a Medicaid State settlement. The relator share will be $6,122,838.60 plus accrued interest from the federal share of the settlement amount and a yet-to-be-announced share from the States.
The settlement was achieved through the coordinated efforts of the U.S. Justice Department, state attorneys general and other law enforcement entities including Medicaid Fraud Control Units, and the Office of Inspector General of the U.S. Department of Health and Human Services. The government was represented by an exceptional team of government attorneys, including Trial Attorney Douglas Rosenthal, U.S. Justice Department, Civil Division, Commercial Litigation Branch; Affirmative Litigation Unit Chief Gregg Shapiro, U.S. Attorney’s Office in the District of Massachusetts; Assistant United States Attorney Zachary Cunha, former Affirmative Litigation Unit Chief, U.S. Attorney’s Office in the District of Massachusetts; and Assistant United States Attorney Kimberly Friday, former Trial Attorney, U.S. Justice Department, Civil Division, Commercial Litigation Branch.
The case is United States ex rel. Fragoules v. Daiichi Sankyo, Inc., et al., Civil Action No. 10.10420- NG (D. Mass.). For information about pharmaceutical fraud whistleblower cases, see www.whistleblowerfirm.com.
