Drugmaker Settles Qui Tam Suit for $7.3 Million

Drugmaker Settles Qui Tam Suit for $7.3 Million

The maker of the intravenous antifungal medication Mycamine has settled a whistleblower action against it with the U.S. government and several states for $7.3 million.

The settlement agreement between defendant Astellas Pharma US Inc. and relator Frank Smith, the federal government and Medicaid-participating states was unsealed Wednesday. The complaint was filed in 2010 in the U.S. District Court for the Eastern District of Pennsylvania by Smith, who alleged violations of the False Claims Act against Astellas.

According to the settlement agreement, Astellas is to pay about $4.2 million to the government, $3.1 million to Medicaid-participating states, and $708,852 to Smith, a sales representative at Astellas who initiated the suit. The settlement includes an interest rate of 1.25 percent, applied from Dec. 18, 2013, until the day payment is rendered.

The plaintiffs alleged that Astellas sold Mycamine—a drug used to treat fungal infections of the esophagus in adults—for non-approved use for children, according to the agreement.

Mycamine was approved in 2005 to treat adult patients with esophageal candidiasis and prophylaxis of candida infections related to hematopoietic stem cell transplants, according to the agreement. In 2008, it was approved for adult use in candidemia, acute disseminated candidiasis, and candida peritonitis and abscesses.

The agreement said that from 2005 to 2013, Mycamine was not approved to treat children for any use.

The U.S. government claimed that Astellas “knowingly marketed and promoted the sale and use of Mycamine for pediatric patients, when the drug had not been approved as safe and effective by the Food and Drug Administration (FDA) for such patients,” the agreement said, “and the United States and state Medicaid programs did not provide coverage for such use of Mycamine.”

However, the agreement was “neither an admission of liability by [Astellas] nor a concession by the United States that its claims are not well founded. [Astellas] expressly denies the allegations of the United States and [Smith] as set forth herein and in the civil action.”

According to Smith’s complaint, Astellas “aggressively marketed” Mycamine to children’s hospitals for pediatric and adolescent use and that the drug presented an “increased risk of harm” to children.

“Particular pressure was placed on salespersons with children’s hospitals in their sales territories (including duPont Hospital for Children in Wilmington, Del., the Children’s Hospital of Philadelphia, and St. Christopher’s Hospital for Children) to market Mycamine as not only safe for children but superior to its counterpart Cancidas, even though Mycamine has no pediatric indication,” the complaint said.

Stephen Sheller, founder of Sheller P.C., represented Smith along with Claudine Homolash, formerly of the Sheller firm, and Joseph Trautwein.

Homolash, who now operates her own firm, said, “I appreciate the opportunity I had to work on the case with Mr. Sheller.”

Sheller said the case was an example of irresponsibility in the pharmaceutical industry and the settlement sent a message to other drugmakers nationwide.

“The message it sends to the companies who are doing this, is that the government [will keep] hitting them and keep getting money back for the taxpayers,” Sheller said.

He added, “The real problem we have is the use of these drugs off-label. It’s usually children and the elderly who suffer, those least able to protect themselves.”

Thomas Gallagher of Pepper Hamilton represented Astellas and declined to comment.

In a press release, Astellas CEO Masao Yoshida said, “Astellas cooperated fully with the U.S. government’s review of this matter, and we are pleased to have reached a resolution.” He continued, “In keeping with our corporate commitment to conduct business with a high sense of ethics, our policy has always been to promote our products in accordance with FDA regulations.”

When asked if the U.S. Attorney’s Office for the Eastern District of Pennsylvania had comment regarding the settlement, Patricia Hartman, the office’s public affairs specialist, said the assistant U.S. attorney who handled the case, Susan R. Becker, was unavailable and pointed to a U.S. Department of Justice press release.

“The settlement in this case further demonstrates our commitment to hold responsible any pharmaceutical company that disregards the FDA drug approval process and promotes drugs for uses before they have been deemed safe and effective,” said U.S. Attorney Zane D. Memeger of the Eastern District of Pennsylvania in the press release. “It’s a message that should resonate with all drug companies: There are consequences for violating the False Claims Act and putting profit ahead of government safeguards.”

P.J. D’Annunzio can be contacted at 215-557-2315 or pdannunzio@alm.com. Follow him on Twitter @PJDAnnunzioTLI.

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