False Claims Act Update & Alert
	Taxpayers Against Fraud Education Fund | Washington, D.C. | WWW.TAF.ORG           June 30, 2009
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			Major Settlements Ahead: Pfizer's $2.3 Billion Reserve Pfizer's SEC report notes the company has reserved $2.3 billion "resulting from an agreement in principle to resolve previously disclosed investigations regarding allegations of past off-label promotional practices concerning Bextra, as well as other open investigations." When a settlement occurs, this will make Bextra the largest single settlement with an FCA component. Glaxo's $400 Million Reserve GlaxoSmithKline has reserved $400 million to settle off-label and kickback charges related to "several products" sold from 1997 to 2004, including the antidepressant Wellbutrin. Glaxo said the reserve "reflects the current status of the [DoJ] investigation." Forest's $170 Million Reserve Forest Laboratories has set aside $170 million to settle a False Claims Act case related to kickbacks paid to doctors for prescribing antidepressants Celexa and Lexapro to children, as well as for the off-label marketing of Levothroid. Forest notes that "there can be no assurance that the amount reserved by the Company will be sufficient and that a larger material amount will not be required."
			Major Cases in the Backlog: Merck Faces 35 States  on Vytorin DoJ and 35 state Attorney Generals offices are investigating whether Merck and Schering-Plough improperly promoted the cholesterol drug Vytorin. Merck says it has received five "civil investigative demands" from a multistate group. Risperdal Marketed Off-label Three former salespeople have filed suit against Janssen Pharmaceutical alleging the company engaged in off-label marketing of the antipsychotic drug Risperdal. According to the lawsuit, company salespeople were encouraged to push the drug to doctors as a treatment for bipolar disorder and depression. Risperdal generated $3.4 billion in sales in 2008. This case seems to be parallel to the Lilly/Zyprexa case settled for $1.4 billion in January, and an analog case dealing with Seroquel is out there. Wellcare Health Plans, Inc. Wellcare has already paid out approximately $80 million, but there are other ongoing investigations, a and the CEO just resigned (the second in as many years). Amgen Pharma Fraud Alleged A qui tam case against Amgen over the sales and marketing of arthritis and psoriasis drug Enbrel, and anti-anemia drug Aranesp, has come out from under seal due to a judge’s order. DoJ is still deciding if it is going to join. Amerisource-Bergen and online health-information provider WebMD Health Corp are also named in the complaint, which involves off-label marketing, kickbacks and Medicaid best price violations. KBR Is Most of the Iraq War Fraud  April Stephenson, head of the Pentagon’s contract audit agency, says KBR is named in the "vast majority" of 32 cases referred for criminal investigation. Does this announcement mean a big KBR case is about to come out of the pipe? Hard to know, but it’s certainly not a bad sign. DoJ Joins Natrecor Suit The U.S. Justice Department has joined two whistleblower lawsuits alleging that Johnson & Johnson and Scios engaged in off-label marketing of the cardiac drug Natrecor. Biomet and Others Under Investigation A whistleblower lawsuit accuses Biomet Inc. and several other orthopedic companies of defrauding the U.S. Government of hundreds of millions of dollars by making false payment claims. California Sues Seven Labs California is suing seven private medical labs, alleging they cost the state hundreds of millions of dollars by overcharging Medi-Cal by as much as 400 percent.
			Major Cases Settled So Far This Year: Lilly Pays Record $1.4 Billion Eli Lilly has agreed to pay $1.4 billion to settle charges it defrauded Medicare and Medicaid by off-label marketing of Zyprexa. Of the $1.4 billion settlement, $800 million is to be paid under the FCA ($438 million under Federal FCA, $362 million to the states), and $615 million is a criminal penalty. Northrop to Pay $325 Million Northrop Grumman has agreed to pay $325 million to settle a False Claims Act lawsuit that alleges TRW (now owned by Northrop) made defective parts for spy satellites that resulted in serious malfunctions and expensive fixes, all charged to U.S. taxpayers. The Northrop settlement is the largest military-procurement fraud whistleblower case to date. Quest Diagnostics to Pay $302 Million Quest Diagnostics has agreed to pay $302 million to settle civil and criminal charges related to a Quest subsidiary which sold a parathyroid hormone immunoassay test which reported elevated results. Network Appliance to Pay $128 Million Network Appliance Inc. has agreed to pay $128 million to settle a False Claims Act case involving best price violations. This settlement is the largest corporate fraud settlement in Government Services Administration (GSA) history. WellCare to Pay $80 Million WellCare Health Plans has agreed to pay $80 million to settle charges the company inflated Medicaid charges in Florida. The settlement only applies to Florida, and does not settle any other state or federal investigations of WellCare. Bayer Healthcare to Pay $97.5 Million Bayer HealthCare has agreed to pay $97.5 million to settle an FCA case in which the company was charged with paying kickbacks to several diabetic suppliers, causing those suppliers to submit false claims to Medicare. Armor to Pay $30 Million Armor Holdings Products, a division of BAE Systems, has agreed to pay $30 million to settle a False Claims Act case in which the company was accused of knowingly manufacturing and selling defective Zylon bullet-proof vests. Condell to Pay $36 Million Condell Medical Center of Libertyville, IL, has agreed to pay $36 million to settle an FCA lawsuit in which it is alleged the company paid kickbacks to doctors.  APL Shipping to Pay $26 Million APL Ltd, a shipping firm in Oakland, California, has agreed to pay $26 million to settle a FCA case in which the company is accused of knowingly overcharging and double-billing the Department of Defense to transport thousands of containers to Iraq and Afghanistan. SouthernCare Hospice to Pay $25 Million SouthernCare Inc. has agreed to pay $24.7 million to settle charges it billed Medicare for ineligible patients.
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