News/Events

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.

Attorney General Rutledge part of a 22-state coalition that filed brief defending legislative prayer

LITTLE ROCK – The 6th Circuit U.S. Court of Appeals has upheld the constitutionality of legislative prayer after Arkansas Attorney General Leslie Rutledge and a 22-state coalition filed a brief in support of Jackson County, Michigan and their tradition of beginning board meetings with a prayer.

“Today’s decision from the 6th Circuit will have an important impact on religious freedom, not only in Michigan but across the United States,” said Attorney General Rutledge. “The practice of legislative prayer has routinely included lawmaker-led prayer and this decision allows lawmakers to continue exercising their own guaranteed religious liberty.”

In 2013, a self-proclaimed pagan objected to the tradition of opening the board meetings with prayer and filed a lawsuit. A district court rejected the challenge, but a three-judge panel of the 6th Circuit ruled 2 to 1 in February that the prayers by various commissioners during meetings violated the First Amendment. In March, the full circuit asked to rehear the case.

Arkansas to receive over $82,500

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge has joined with 31 other states in a settlement with laptop manufacturer Lenovo Inc. to resolve allegations that the company violated consumer protection laws by pre-installing software on computers sold to consumers, making personal information vulnerable to hackers.

“By failing to properly disclose information to Arkansans about the potential security vulnerability on its laptops and its inadequate procedure to opt-out of a software program, Lenovo violated the law,” said Attorney General Rutledge. “Through this settlement, Lenovo is required to implement new security measures and proper disclosure procedures that will be assessed biennially.”

Arkansas is set to receive $82,567 from this settlement.

In August 2014, North Carolina-based Lenovo began selling certain laptop computers that contained pre-installed ad software called VisualDiscovery, which was created by the company Superfish Inc. VisualDiscovery purportedly operated as a shopping assistant by delivering pop-up ads to consumers of similar looking products sold by Superfish retail partners whenever a customer's mouse hovered over the image of a product on a shopping website. Rutledge and her colleagues claimed that VisualDiscovery displayed a one-time pop-up window the first time consumers visited a shopping website. Unless consumers affirmatively opted out, VisualDiscovery would be enabled on their computers.

VisualDiscovery operated by acting as a local proxy that stood between the consumer's browser and all internet websites that the user visited, including encrypted sites. This technique allowed the software to see all of a user's sensitive personal information that was transmitted online. Consumer information, including sensitive communications with encrypted Web sites, was collected and transmitted to Superfish.

The states also alleged that VisualDiscovery created a security vulnerability that made consumers' information susceptible to hackers in certain situations.

Lenovo stopped shipping laptops with VisualDiscovery preinstalled in February 2015, though some laptops with the software were still being sold by various retail outlets as late as June 2015.

In addition to the monetary payment, the settlement requires Lenovo to change its consumer disclosures about pre-installed advertising software, to require a consumer's affirmative consent to using the software on their device and to provide a reasonable and effective means for consumers to opt-out, disable or remove the software.

Lenovo is also required to implement and maintain a software security compliance program and must obtain initial and biennial assessments for the next 20 years from a qualified, independent, third-party professional that certifies the effectiveness and compliance with the security compliance program.