Arkansas to Receive Settlement to Resolve Kickback Allegations Against a New Jersey based Pharmaceutical Company
March 16, 2016
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today announced that the National Association of Medicaid Fraud Control Units joined the federal government to reach an agreement in principle with the pharmaceutical manufacturer Daiichi Sankyo, Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey, to settle allegations that the company violated the False Claims Act. Rutledge released the following statement:
“Arkansas is set to receive $15,459.81 from a multi-state settlement reached with Daiichi Sankyo, Inc. The Arkansas Medicaid Trust Fund, which incurred losses as a result of this fraud, will be reimbursed. This pharmaceutical company violated the False Claims Act by using meals and speaker program honoraria as incentives to entice physicians to prescribe the drugs Azor, Benicar, Tribenzor and Welchol.”
Daiichi Sankyo will pay the states and the federal government a total of $39 million in civil damages and penalties for Medicaid and other federally-funded health care programs.
The investigation that led to the settlement grew out of a false claims action filed by a former Daiichi Sankyo sales representative in 2010. The whistleblower’s complaint alleged that the claims were false because they resulted from kickbacks that Daiichi Sankyo provided to physicians who prescribed the drugs.
The settlement agreement reimburses the federal government and the participating states for damages that were assessed in accordance with the amounts that Daiichi Sankyo expended on each speaker program for each fiscal year. The total Medicaid portion of the settlement – state and federal – is $10 million; and the states’ share of the Medicaid recovery is $5 million. Additionally, as part of the settlement, Daiichi Sankyo has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which obligates Daiichi Sankyo to undertake substantial internal compliance reforms for the next five years.
Forty-nine states and the District of Columbia are participating in the settlement. The federal settlement was announced by the Justice Department in January of this year.
Arkansas’s portion of the settlement will be placed in the Arkansas Medicaid Trust Fund.