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Justice Dept Recovers $3 Bln From Fraud And False Claims Cases In Fiscal 2019

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The U.S. Department of Justice said it recovered more than $3 billion from businesses who have committed fraud and false claims against the government in the fiscal year ending September 30, 2019.

The lion's share of that money, $2.6 billion, was realized from settlements and judgments of civil cases for the Department of Health and Human Services.

The cases relate to fraud and false claims in the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

The government recovered another $400 million from cases related to other departments.

Two of the largest recoveries involving the health care industry in the past year came from opioid manufacturers.

In one case, American specialty pharmaceutical company Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to influence physicians and nurse practitioners to prescribe Subsys for their patients.

Subsys is a liquid form of fentanyl, a powerful opioid used to relieve peaks of pain in cancer patients.

The kickbacks were given in the form of sham speaker events, jobs for the prescribers' relatives and friends, and lavish meals and entertainment. The government also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients' diagnoses to ensure payment by federal healthcare programs.

In the second case, Reckitt Benckiser Group plc paid a total of $1.4 billion to resolve criminal and civil liability related to the marketing of the opioid addiction treatment drug Suboxone, which is a formulation of the opioid buprenorphine.

As part of the settlement, RB Group agreed to pay $500 million to the government to resolve allegations that it directly or through subsidiaries promoted Suboxone to physicians who were writing prescriptions for uses that were unsafe, ineffective, and medically unnecessary.

The company is also alleged to have promoted Suboxone Film using false and misleading claims that it was less susceptible to diversion, abuse, and accidental pediatric exposure than other buprenorphine products; and took steps to delay the entry of generic competition in order to improperly control the pricing of the drug.

In a separate case, Avanir Pharmaceuticals paid over $95 million to resolve allegations that it paid kickbacks and engaged in false and misleading marketing to induce healthcare providers in long term care facilities to prescribe the drug Neudexta for behaviors commonly associated with dementia patients, which is not an approved use of the drug.

In Fiscal Year 2019, seven drug manufacturers paid a combined total of more than $624 million to resolve claims that they illegally paid patient co-payments for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits.

The companies named by DOJ are Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC.

The Justice Department also reported substantial recoveries involving a variety of other healthcare providers. They include pathology laboratory company Inform Diagnostics, Greenway Health LLC, an EHR software vendor, and Encompass Health Corporation.

In the past year, DOJ also pursued a variety of fraud matters involving the government's purchase of goods and services. Five South Korea-based companies paid more than $162 million as part of the False Claims Act settlements.

Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, more than $2.1 billion was collected from lawsuits filed under the provisions of the False Claims Act. During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.

"Whistleblowers continue to play a critical role identifying new and evolving fraud schemes that might otherwise remain undetected," said Assistant Attorney General Jody Hunt.

This was the tenth consecutive year that the civil health care fraud settlements and judgments crossing $2 billion.

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