Victory Pharma has agreed to pay $11,420,743 to resolve a federal civil and criminal liability lawsuit over allegations it paid kick backs to doctors in order to encourage them to prescribe its products.
The fine comprises $1.4m to resolve federal Ant-Kickback Statute allegations and $9,938,310 to resolve False Claims Act allegations.
Former sales representative and whistleblower Chad Miller will also receive $1.7m in the settlement.
The settlement resolves allegations that Victory paid for kickbacks such as professional and collegiate sporting events; tickets to concerts and plays; spa outings; golf and ski outings; and dinners at expensive restaurants in order to encourage doctors to prescribe its products.
The doctors Victory are alleged to have courted were prescribing drugs to patients covered by Medicare and other federal health insurance programmes.
The settlement also resolves allegations that Victory encouraged its sales representatives to schedule "preceptorships", where a Victory rep would "shadow" a doctor at their office. Victory is accused of improperly using these sessions to induce doctors to prescribe Victory’s products, which include Naprelan, Xodol and Fexmid.
US Department of Health and Human Services, Office of Inspector General, Los Angeles region, special agent in charge Glenn R Ferry said; "Patients expect health care providers to be concerned only with patients’ best medical interests.
"Financial kickbacks betray that patient trust, and taxpayers’ expectation that federal and state health dollars be put only to the wisest use."
The original complaint was filed on March 27, 2009.
Since 2009, the Justice Department has recovered over $13.9bn from False Claims Act related to healthcare fraud.
