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The Justice Department has announced a $280 million settlement of a False Claims Act case against Dey Pharma LP and related companies for inflating published drug prices. The agreement bumps this month’s settlement total for similar cases to more than $701 million. The Dey settlement, announced on Dec. 21, resolves a September 2006 whistleblower case, U.S. ex rel. Ven-a-Care of the Florida Keys Inc. v. Dey Laboratories, brought by Florida home-infusion company Ven-A-Care of the Florida Keys Inc. and its principals,. The Southern District of Florida Case was transferred to the District of Massachusetts as part of a multidistrict litigation, In re Pharmaceutical Industry Average Wholesale Price Litigation. The case accused the Dey entities, which also include Dey Inc. and Dey L.P. Inc., of reporting false and inflated prices for generic versions of four drugs used to treat asthma and respiratory conditions: albuterol sulfate, albuterol MDI, cromolyn sodium, and ipratropium bromide. The Medicare and Medicaid programs based reimbursement rates on these prices. Dey’s actions led to fraudulent government claims, according to the government’s case. “Taxpayer-funded kickback schemes like this not only cost federal health care programs millions of dollars, they threaten to undermine the integrity of the choices health care providers make for their patients,” stated Carmen Ortiz, U.S. Attorney of the District of Massachusetts, in a press release about the settlement. Lawyers from Ortiz’s office worked with the Fraud Section of the Justice Department’s Civil Division and the U.S. Department of Health and Human Services’ Office of Inspector General. The Ven-A-Care whistleblowers’ share of the Dey settlement is about $67.2 million. “We were very happy the government worked with us long and hard,” said Ven-A-Care’s attorney, James Breen of The Breen Law Firm in Alpharetta, Ga. “We’re glad we brought this case and the Roxanne [Laboratories Inc.] case to a successful resolution for the taxpayers,” Breen said. Earlier this month, on Dec. 7, the Justice Department announced $421.1 million in settlements of litigation originally brought by Ven-A-Care against three companies. The Justice Department settled those “average wholesale pricing” cases as follows: Abbott Laboratories Inc. for $126.5 million, B. Braun Medical Inc. for $14.7 million and Roxanne for $280 million. Dey makes prescription drugs to treat respiratory diseases, severe allergic reactions and psychiatric disorders. Dey’s parent, Mylan Inc., issued a press release stating that “the settlement agreement confirms that the resolution of the case does not constitute an admission, finding, or evidence of fault, liability or wrongdoing by Dey.” The press release also noted that Dey’s former parent company, Merck KGaA, is responsible for paying the settlement and other costs related to pending and future cases related to Medicare and Medicaid reimbursement lawsuits against Dey. Dey’s lawyers at New York’s Kelley Drye & Warren referred questions to Merck. Officials at the Darmstadt, Germany-based Merck did not immediately respond to a request for comment. The Dey and Roxanne settlement resolve old cases, but there’s a lot more health care fraud enforcement in the pipeline, said Ellyn Sternfield, of counsel to the Washington office of Boston’s Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, who wasn’t involved in the case. Sternfield said other categories of pending cases include off-label marketing cases and Medicaid drug rebate cases, which stem from a drug company’s sale of a medicine at a lower “best price” than its Medicaid drug rebate for the drug. Pharmaceutical manufacturers must report their best price to the Centers for Medicare and Medicaid Services. Future enforcement is likely to spring from the government’s Health Care Fraud Prevention and Enforcement Action Team (HEAT) strike force. The joint Justice Department and U.S. Department of Health and Human Services initiative, started in May 2009. It’s now in seven urban areas, including Baton Rouge, La.; Brooklyn, N.Y.; Detroit; Houston; Los Angeles; Miami; and Tampa Bay, Fla. “You’re going to see a lot more enforcement through those teams,” Sternfield said. Since January 2009, the Justice Department has recovered more than $5.3 billion in False Claims Act cases alleging fraud against federal health care programs. During the same period, the Justice Department’s total False Claims Act recoveries are nearly $6.8 billion. Sheri Qualters can be contacted at [email protected].

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