Our clients stood up to a pharmaceutical giant and courageously provided the inside information that contributed to the unraveling of this alleged marketing scheme
Fort Lauderdale (PRWEB) September 1, 2010
Pharmaceutical manufacturer Allergan, Inc. has agreed to pay $225 million to resolve civil allegations that it unlawfully promoted its drug Botox® Therapeutic for unapproved uses and that it paid illegal remuneration to health care providers to induce them to prescribe the company’s products. In addition, the company has agreed to pay a $375 million criminal fine and to plead guilty to a misdemeanor charge of introducing this misbranded drug into interstate commerce. The national whistleblower law firm of Nolan & Auerbach, P.A. represented two of the key whistleblowers in this case, which was brought under the qui tam, or whistleblower, provisions of the False Claims Act. This settlement also resolves two other qui tam actions raising similar allegations.
The whistleblowers alleged that Allergan implemented a sophisticated marketing plan with the purpose of inducing physicians to prescribe Botox® Therapeutic for various off-label uses which were neither FDA-approved nor demonstrated to be safe and effective. According to the whistleblowers’ complaint, Allergan knew when it initiated this illegal marketing scheme that there was little credible scientific basis to justify its assertion that Botox® Therapeutic was safe and effective for these off-label uses. The whistleblowers also alleged that Allergan regularly provided illegal kickbacks to physicians who prescribed Botox® Therapeutic for off-label use. These alleged business practices caused federal and state government health care programs to pay millions of dollars for prescriptions which were ineligible for payment.
As Allergan employees tasked with removing payment barriers for off-label coverage, Nolan &Auerbach’s clients Cher Beilfuss and Kathleen O’Connor-Masse had extensive knowledge of the company’s alleged off-label marketing schemes. Ms. Beilfuss was employed by Allergan as a Regional Healthcare Policy Manager from 2005 to 2007. Ms. O’Connor-Masse was a Payor Reimbursement Account Manager from 2000 to 2004 and Director of Western Area Reimbursement Account Manager from 2004 until June 2005.
“Our clients stood up to a pharmaceutical giant and courageously provided the inside information that contributed to the unraveling of this alleged marketing scheme,” said founding partner Kenneth Nolan.
While a physician may prescribe a drug for a use other than one for which it is approved, the federal Food, Drug and Cosmetic Act prohibits a drug manufacturer from marketing or promotinga drug for non-approved uses. The Food & Drug Administration (FDA) only approved Botox® Therapeutic for very specific uses, such as treatment for excessive underarm sweating. However, according to the whistleblowers, Allergan broadly marketed the drug to physicians for a variety of off-label uses, for everything from overactive bladders to headaches.
The most common off-label prescriptions identified by the whistleblowers were for headache patients and adult spasticity patients. In addition, even though the FDA had not yet approved Botox® Therapeutic to be safe and effective for pediatric cerebral palsy patients, Allergan marketed the drug as a treatment for the spasticity issues of this patient population.
The whistleblowers alleged that Allergan utilized a multi-million dollar, third-party hotline, where physicians could call and obtain off-label billing assistance including draft letters written for them to get Botox® Therapeutic paid for by the insurance companies or government health care programs.
“The FDA permits the marketing of a drug for specific, scientifically proven uses. Improper promotional materials and other inappropriate business practices undermine the very purpose of the FDA,” said managing partner Marcella Auerbach.
The whistleblowers specifically alleged that Allergan had various programs utilized by its sales representatives to induce physicians to use its products. These programs primarily consisted of excess payments to physicians that were disguised as fees paid to them for “consulting services” or “training sessions.” In fact, the whistleblowers alleged that these fees were illegal kickbacks intended to induce the purchase of Botox® Therapeutic.
The complaint also alleged other physician kickback schemes, including the payment of exorbitant speaking fees, complimentary tickets to entertainment events, all-expense-paid travel, and fine wine and dining. According to the complaint, Allergan also paid millions of dollar each year on various “promotional programs” and “unrestricted educational grants,” which were allegedly veiled attempts to provide incentives for off-label prescriptions.
“Illegal kickbacks cloud the medical judgment of health care providers,” said partner Jeb White. “The anti-kickback laws ensure that physicians prescribe drugs based on patient need and not personal greed.”
Federal and State False Claims Acts allow private citizens with detailed knowledge of fraud to bring an action on behalf of the governments and to assist in the recovery of the governments’ stolen dollars. These statutes allow 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.
Allergan will pay the federal government $375 million to settle the criminal allegations and $210,150,000 to settle the civil allegations. The participating States will receive $14,850,000, as a result of a Medicaid State settlement. The whistleblowers will collectively receive $37,827,000, 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. Specifically, the federal government was represented by an exceptional team of government attorneys, including Assistant Directors Jamie Yavelberg and Patricia Davis, U.S. Justice Department, Civil Division, Commercial Litigation Branch; U.S. Attorney Sally Quillian Yates, U.S. Attorney’s Office in the Northern District of Georgia; Civil Division Chief Amy Berne, U.S. Attorney’s Office in the Northern District of Georgia; Assistant U.S. Attorneys Sally Malloy and Christopher Huber, U.S. Attorney’s Office in the Northern District of Georgia; Trial Attorney Edward Crooke, U.S. Justice Department, Civil Division, Commercial Litigation Branch; and Assistant Inspector General for Legal Affairs Greg Demske, Office of Inspector General of the U.S. Department of Health and Human Services. The participating States were represented by an equally dedicated team of government attorneys, via the National Association of Medicaid Fraud Control Unit’s Qui Tam Subcommittee. The committee includes several state representatives, including New York Assistant Attorney General Jay Spears, Illinois Deputy Attorney General Patrick Keenan and Massachusetts Assistant Attorney General Robert Patten.This case is United States et al., ex rel. Cher Beilfuss and Kathleen O’Connor-Masse v. Allergan, Inc., No. 08-cv-1883 WSD (N.D. Ga.).
Contact: Ken Nolan, Marcella Auerbach, Jeb White