Boston plaintiffs’ litigation shop Ellis & Rapacki capped off the year with two different False Claims Act wins for whistleblower clients.
On December 27, the firm announced a settlement calling for the now-defunct Victory Pharma Inc. to pay $12.2 million to the federal and state governments. The deal settles False Claims Act allegations filed in the Southern District of California that the company’s employees paid kickbacks to doctors to prescribe its pain drugs Naprelan, Dolgic, Xodol and Fexmid.
The announcement followed the December 19 publication of another win—Sanofi US’s $109 million settlement of claims related to its former product Hyalgan, which is injected into a patient’s knee to relieve osteoarthritis pain.
The District of Massachusetts case charged Sanofi with using free samples to prompt doctors to buy the product and unlawfully bill federally funded health care programs an inflated average price.
Both cases officially settled on December 18, making it a fine day for the lead attorney on both cases, Joseph Makalusky, a partner at Boston-based Ellis & Rapacki. “To have them both resolved on the same day and announced within a week of each other is unusual,” he said.
The Victory case filed in March 2009 claimed the company gave kickbacks from 2007 to 2009. The case claimed these included the following: cash; tickets to sporting events and concerts; golf outings and other trips; alcohol and dinners. The more egregious alleged kickbacks included giving a doctor money for a mortgage payment, paying for a physician’s staff’s outing at a strip club, including “lap dances” for the female staff, and an offer to a doctor and his staff of a trip to Las Vegas.
The firm’s client, Chad Miller, was awarded more than $1.7 million in the case.
Shionogi Inc., which has since purchased Victory’s assets, did not immediately respond to a request for comment.
“This resolution underscores the need for physicians to make treatment decisions based on their own independent medical judgment, without being influenced by kickbacks or other improper benefits,” stated Laura Duffy, U.S. Attorney for the Southern District of California, in a press release.
The Sanofi case filed in January 2010 claimed the company engaged in the illegal free sample scheme from 2005 to 2009. The deal calls for Sanofi, which faces no related criminal charges, to ink a corporate integrity agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services.
Whistleblower Mark Giddarie was awarded more than $18.5 million.
These cases are important because similar company actions “ultimately harms the public fisc and endangers the health of patients. It’s not a victimless crime. It harms lots of people,” Makalusky said.
In a December 19 press release, Sanofi stated that, “Before the government initiated the investigation that led to this settlement, Sanofi identified concerns with Hyalgan sampling through the operation of its compliance program and immediately took strong, proactive and effective steps to address these issues and voluntarily stopped sampling Hyalgan in 2009.”
“This is not the first time that this Office has brought action against a manufacturer who engaged in such an illegal scheme, and the government will remain vigilant in policing such conduct,” stated Carmen Ortiz, U.S. Attorney for the District of Massachusetts, also in a December 19 press release.
Sheri Qualters can be contacted at email@example.com.