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    Attorneys General Reach $13.4 Million Settlement with U.S. Bioservices Pharmacy

    September 7, 2017

    Arkansas will receive almost $30,000

    LITTLE ROCK – Arkansas Attorney General Leslie Rutledge has reached an agreement to settle allegations against U.S. Bioservices Corporation, a specialty pharmacy headquartered in Frisco, Texas.

    The settlement resolves allegations that the corporation knowingly recommended the drug Exjade to Medicaid patients in exchange for kickbacks from Novartis Pharmaceuticals Corporation which markets the drug. Under the settlement, U.S. Bioservices has agreed to pay $13.4 million to the United States and over thirty states. Arkansas will receive $29,046 under the settlement.

    “Another company is being held accountable for its greedy mentality to encourage the use of the drug Exjade,” said Attorney General Rutledge. “There is no place for threatening tactics especially in the health care marketplace. The health and well-being of the patient must be paramount.”

    Exjade was approved by the U.S. Food and Drug Administration in late 2005 for the treatment of chronic iron overload due to blood transfusions. When Novartis launched Exjade, it created a closed distribution network, consisting of three pharmacies selected by Novartis, through which most Exjade prescriptions in the United States were filled. As a result, Novartis controlled which pharmacy filled many of the prescriptions for Exjade dispensed through the network. The settlement resolves allegations that U.S. Bioservices participated in a scheme in which Novartis paid kickbacks to pharmacies by giving more prescription referrals to the pharmacy that kept patients on Exjade the longest.

    The settlement with U.S. Bioservices is the fourth government settlement in connection with the Exjade drug and the patient referral system set up by Novartis. In early 2014, another pharmacy, BioScrip Inc., agreed to pay $15 million to resolve similar allegations. In July 2015, Accredo Health Group Inc., agreed to pay $60 million to resolve their part in the alleged kickback scheme. Arkansas received $141,202 under that settlement. Finally, in December 2015, Novartis agreed to pay $390 million to resolve the related allegations made against it after 11 states and the federal government had intervened in the whistleblower action. Arkansas received $612,291 under that settlement.

    A National Association of Medicaid Fraud Control Units Team participated in the settlement negotiations on behalf of the states and included representatives from attorneys general of Washington, California, Indiana, Oklahoma, Wisconsin and New York.

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