Kentucky-based US WorldMeds LLC will pay $17.5 million to resolve allegations that it offered kickbacks to both doctors and patients to secure prescriptions of its drugs Apokyn and Myobloc, used to treat Parkinson’s disease. The prescriptions generated millions of dollars for the company in the shape of Medicare billings.
The multi-million-dollar settlement resolves a whistleblower lawsuit filed by two former employees of US WorldMeds, Dr. Bennett and Dr. Chinnapongse. Under the False Claims Act, the two relators stand to receive a shared award amounting to 15-25 percent of the total recoveries.
The whistleblowers quit their jobs immediately after the resolution of the lawsuit became public. According to a spokesperson for Dr. Chinnapongse, he is not only “a brilliant scientist,” but also “a deeply ethical doctor who stood up at great risk to do the right thing,” and, “precisely the kind of whistleblower that the False Claims Act is meant to reach.”
Under the Anti-Kickback Statute, drug manufacturers are prohibited from offering any kind of financial incentive to induce the purchase of a specific drug. With their courageous lawsuit, the whistleblowers allegedly helped the government unmask a massive kickback scheme.
According to the complaint, the scheme dates back to early 2012, when the price of Apokyn rose substantially. This led Medicare copays for the drug to reach $5,000 annually. Allegedly with the purpose of securing a lucrative number of prescriptions, which would be covered by Medicare, WorldMeds then became the only donor to a foundation that provided Apokyn copays for Medicare patients. Prosecutors found that “virtually all of the fund’s donations were spent on Medicare Apokyn patients.”
US WorldMeds also paid two doctors hefty consulting fees and luxury vacations, allegedly in exchange for prescriptions of both Apokyn and Myobloc made out to Medicare beneficiaries. Among other things, the alleged kickbacks included all-expenses-paid trips to the Kentucky Derby for the prescribing doctors and their wives.
Upon the announcement of the settlement, a spokesperson for the Department of Justice stated that “physicians’ and patients’ selection of medications” should not be “influenced by improper financial considerations.”
As part of the settlement, US WorldMeds has entered into a corporate integrity agreement with the Department of Health and Human Services. The agreement establishes stringent controls over the company´s arrangements with third-parties.
For John H. Durham, U.S. Attorney for the District of Connecticut, “Pharmaceutical companies and other healthcare providers that pay kickbacks to patients and physicians to improperly induce drug prescriptions drive up the costs of healthcare and divert critical resources from the Medicare program.”
Durham also made a point of encouraging new would-be tipsters: “We encourage all individuals who are aware of fraud against the government to come forward. The Connecticut U.S. Attorney’s Office will continue to pursue companies and providers that defraud federal health care programs.”