In our blog published on July 5, 2017, we discussed “Open Payments,” which is a federal program, required by the Affordable Care Act, that collects information about the payments drug and device companies make to physicians and teaching hospitals for things like travel, research, gifts, speaking fees, and meals, and also includes ownership interests that physicians or their immediate family members have in these companies.
It was recently reported that Allergan, Inc. has agreed to pay $13 million to 19 U.S. states as well as to the United States to settle a whistleblower lawsuit filed by two Pennsylvania ophthalmologists, which alleged that Allergan, Inc. engaged in an illegal kickback scheme by providing business consulting services and other valuable services to eye care providers (primarily ophthalmologists and optometrists) in an effort to induce them to prescribe Allergan eye care products when less expensive alternatives were available and appropriate, thereby resulting in federal health programs such as Medicare and Medicaid paying for unnecessary medical care.
The original qui tam lawsuit filed under the provisions of the False Claims Act was filed in 2009 in the United States District Court for the Eastern District of Pennsylvania. The U.S. government declined to intervene in the lawsuit and the plaintiffs continued with their claims against Allergan, Inc. regarding the alleged illegal kickback scheme that resulted in the recently announced settlement. The plaintiffs will be entitled to up to 30% of the settlement, pursuant to the provisions of the False Claims Act that provides incentives for private citizens to seek recovery on behalf of the United States for activities resulting in alleged illegal payments made under various federal programs.
The plaintiffs’ Second Amended Qui Tam Complaint (“Complaint”) that was filed on September 27, 2010 alleged that Allergan, Inc. knowingly provided valuable business consulting services, continuing medical education, and other valuable services to eye care professionals throughout the United States when they enrolled in Allergan’s “Allergan Access” program. The plaintiffs alleged that Allergan’s primary purpose in providing the valuable services and benefits to eye care professionals was to induce them to prescribe Allergan eye care products that were often more expensive than other available alternatives.
The unsealed Complaint alleges that “Defendant [Allergan, Inc.] has, since at least approximately 2002, conducted an unlawful kickback scheme to induce eye care professionals to prescribe Allergan products, in violation of the federal Anti-Kickback Statutes, and analogous state laws and statutes, including “Free on-demand, expert business advisory services, offered through Allergan’s nationwide network of Eye Care Business Advisors; Membership in the state-of-the-art Allergan Access website, which provides physicians selected by Allergan with comprehensive business services, including, but not limited to: sophisticated financial analysis and benchmarking assessment tools; payer and reimbursement analysis and benchmarking tools; human resource guidance and tools; physician recruitment and contracting guidance and tools; on-demand expert billing and coding advice; and a full suite of on-line continuing education courses for technicians and staff. The fair-market-value of these expert services far exceeds the nominal annual membership fee [$895] for access to Allergan’s exclusive website; and Membership in Allergan’s lucrative speaker’s bureau, which is reserved for those physicians who are described by Allergan as ‘really good writers of prescriptions’.”
The Complaint further alleged, “Although Defendant did not directly submit claims for prescription drugs to federal and state health insurance programs, it knew, and/or reasonably foresaw, that its illegal financial inducements would cause the submission of thousands of claims to these health programs for prescriptions that were not eligible for program reimbursement. Defendant is therefore liable under the federal False Claims Act and analogous state False Claims Acts for causing the submission of thousands of claims for prescriptions that were not eligible for reimbursement because those claims resulted from illegal kickbacks that were offered and/or supplied by Allergan to the Ophthalmologists and Optometrists who ordered those prescriptions.”
The Complaint alleged, “Allergan provided illegal remuneration to prescribing eye care professionals to induce improper referrals for Defendant’s ophthalmic prescription drugs to beneficiaries of federally-funded health care programs in violation of the federal Anti-Kickback Statute … Allergan knew that kickback-induced prescriptions were not eligible for federal and state health care program reimbursement. Notwithstanding its knowledge that prescriptions for Allergan’s eye care pharmaceutical products induced by kickbacks were not eligible for federal and state reimbursement, Allergan knowingly undertook such illegal kickback practices to increase the prescription of its eye care pharmaceutical products.”
Allergan’s eye care products are big-business for the company. According to the plaintiffs’ Complaint, ” … between January and July of 2008, the numbers of prescriptions written for certain of Defendant Allergan’s Eye Care Pharmaceutical products, for persons in the United States over 65 years of age, were as follows: Lumigan: 1,074,000 prescriptions; Zymar: 591,000 prescriptions; Restasis: 514,000 prescriptions; [and] Acular LS: 355,000 prescriptions. In the area of Chronic Dry Eye, Defendant Allergan’s product Restasis is the first and currently the only prescription therapy for the treatment of chronic dry eye worldwide … Because of its status as the exclusive prescription therapy for chronic dry eye, Restasis is covered by most private and government funded health insurance plans, including, but not limited to, Medicare, the Federal Employee Health Benefits Program, and the Medicaid programs of each of the States named in this Second Amended Complaint … Restasis is Allergan’s best selling eye care product. Since 2005, Allergan’s net sales from Restasis have been as follows: $190.9 Million in 2005; $270.2 Million in 2006; $344.5 Million in 2007; $444 Million in 2008, and $522.9 Million in 2009.”
The plaintiff’s lawsuit is captioned United States of America ex rel. Herbert J. Nevyas, M.D. and Anita Nevyas-Wallace, M.D. v. Allergan, Inc., Civil Action No. 09-CV-00432 (E.D. Pa.) (United States District Court Judge Mark A. Kearney).
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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