Generic drug companies are paying $ 447.2 million to solve allegations of FCA violations and price fixing

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Generic drug makers Taro Pharmaceuticals USA, Inc., Sandoz Inc., and Apotex Corporation will pay $ 447.2 million to settle allegations that they conspired to artificially skyrocket the prices of several generic drugs to drive. This conspiracy allegedly resulted in above-average drug prices for federal medical programs and their beneficiaries, according to a press release from the U.S. Department of Justice (DOJ).

The government alleged that through communicating with one another and negotiating generic prices through cooperation, these three companies paid and received illegal compensation. Under the Anti-Kickback Statute of the False Claims Act, this type of collaboration can be viewed as a kickback. According to the press release, this kickback program should have taken place between 2013 and 2015.

The settlements agreed for the case show the gravity of the alleged violations of the False Claims Act, with Taro Pharmaceuticals agreeing to pay $ 213.2 million, Sandoz $ 185 million and Apotex $ 49 million. The drugs involved in the alleged kickback program range from drugs used to treat high blood pressure and cholesterol to drugs used to treat arthritis, and even include antifungal and skin treatment creams.

The artificial inflation of generic prices through conspiracy threatens the individual’s ability to continue using drugs that make his or her life safer and more comfortable. Raising drug prices to artificially high levels also undermines trust in the pharmaceutical and the entire American medical system, damaging reputations and relationships between the public and healthcare professionals. The collusion price hike harms Medicare and other federal medical programs by tricking the government into paying more for essential medical services and wasting taxpayers’ money.

“The conspiracy to raise generic drug prices is illegal and could prevent patients from getting the prescription drugs they need. Americans have the right to buy generic drugs that are determined by fair and open competition, not collusion, “said Maureen R. Dixon, Special Envoy of the Philadelphia Regional Office of the Inspector General, Department of Health and Human Services (HHS- OIG). “HHS-OIG, together with our law enforcement partners, will continue to investigate allegations made by companies involved in activities that endanger the public and the Medicare program.”

Another aspect of the deal requires all three companies to enter into five-year Corporate Integrity Agreements (CIAs). These agreements are intended to improve the oversight of future corporate decisions at a high level and to develop systems for greater transparency within each organization. All three companies must also implement “compliance measures such as risk assessment programs, regulations on the remuneration of executives and compliance-related certifications for company management and board members”.

Although a whistleblower was not mentioned in the comparison, this lawsuit shows the strength and relevance of the False Claims Act, even if no whistleblower is involved. The False Claims Act and its essential medical elements such as the Stark Act and the anti-kickback provisions are the backbone of the US defense against medical fraud.

In cases like this, whistleblowers often make extensive disclosures and, as a reward, reap high percentages of comparisons. In one qui tam Whistleblowers are entitled to 15 to 30% of the total amount collected against a company that violates the False Claims Act and defrauds the government.

Read the DOJ press release here.

Read more False Claims Act /qui tam News on WNN.

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