Nursing Home “Worthless Services” Theory Can’t Support FCA Liability

Last month the Seventh Circuit rejected an attempt to predicate False Claims Act liability against a nursing home on a theory of “worthless services.”  In throwing out a $3 million jury verdict awarded to two former nurses-turned-whistleblowers, the court concluded that even if “worthless services” was a viable theory under the FCA, a relator would have to prove that the nursing home’s services were completely worthless and not just substandard. [Read more...]

Will GSK’s Incentive Compensation And Speaker Program Initiatives Set The Tone For 2014?

When British drug giant GlaxoSmithKline PLC (“GSK”) announced last month that it was implementing a new global marketing strategy to transform the way it sells and markets drugs to both doctors and patients, many commentators were quick to announce that a fundamental shift in the pharmaceutical business was underway.   While GSK’s announcement was significant in terms of precedence and scope, it is unclear at best whether other pharmaceutical companies will follow suit. [Read more...]

J&J to Pay $2.2 Billion To End Long-Standing Investigations By Feds

Charges of off-label marketing and kickback payments to physicians and long-term care pharmacy provider Omnicare are behind a $2.2 billion settlement agreement between Johnson & Johnson (“J&J”) and the U.S. Department of Justice (DOJ), in which the global health care giant finally resolves criminal and civil liability involving Risperdal and two other prescription drugs.  The eye-popping figure makes this the third largest health care fraud settlement in U.S. history. [Read more...]

Big Pharma On Its Heels as China Rounds Up “More Of The Usual Suspects” And Prepares To Slam GSK

Allegations of misconduct continue to plague Big Pharma companies in China.  Charges of bribery, corruption, off-label promotion, and inflated pricing now extend beyond GlaxoSmithKline (GSK) to Novartis, Eli Lilly, and Sanofi.  While these companies react to coming under Chinese scrutiny — with Johnson & Johnson (J&J) reportedly taking “proactive” steps to strengthen its China unit –  the Company that started it all (GSK) braces for major fines.  [Read more...]

Plaintiff’s Lawyers File RICO Class Action Suit Against Abbott Over Depakote Off-Label Promotion

A well-known plaintiff’s law firm with a stable of union pension fund clients has used the Racketeering Influenced and Corrupt Organizations Act (“RICO”), which was originally enacted in 1970 to combat organized crime, to file a class action lawsuit against Abbott Laboratories for the off-label promotions of Depakote.  Unless Abbott and similarly situated big pharma companies intend to fork over hundreds of millions (if not billions) of more dollars to plaintiff’s lawyers, they need to fight such suits tooth and nail. [Read more...]

Boston Scientific Battles Former Employees-Turned Whistleblowers Over “Trade Secrets”

In what will likely be another adverse legal decision for Boston Scientific Corporation’s Neuromodulation subsidiary (“BSNC”) in its ongoing battle with two former billing services employees-turned whistleblowers, the medical device manufacturer’s latest attempt to derail a qui tam suit involves charges that the whistleblowers stole BSNC trade secrets, thus violating the terms of their employment agreements.  Although there might one day be a case that truly tests the limits on how far an employee can go in taking her employer’s proprietary data to win the qui tam lottery, the current suit involving BSNC is probably not that case. [Read more...]

GSK’s China Employees “Confess” To Bribery

Yesterday we described the burgeoning bribery allegations against GSK’s China operations in a post titled “Enemy at the Gates: Bribery Charges in China Getting Worse for GSK.”   Apparently, GSK’s China woes are getting worse by the day.  A Reuters article reports that the Chinese government has secured “confessions” from several GSK “executives” to bribery and tax violations.  (Click to read the Reuters story).

Allegations reported recently in the Wall Street Journal disclose that GSK Chinese staffers developed a plan, dubbed the “Vasily” program after famed World War II Russian sniper, Vasily Zaytsev, that targeted 48 doctors for payments and gifts in exchange for writing GSK drug prescriptions.   Pharmarisc will be following this story and will report any significant developments in the case.


Enemy at the Gates: Bribery Charges in China Getting Worse For GSK

Recent news reports from the Wall Street Journal about an alleged bribery scheme at GlaxoSmithKline’s (GSK) China operations come on the heels of several arrests of GSK employees, including one foreign executive, on charges of “economic crimes.”  The bribery scheme reportedly involved a plan to pay 48 Chinese doctors to push sales of Botox® and was dubbed the “Vasily” strategy after famed World War II Russian sniper, Vasily Zaytsev, who Jude Law portrayed in the 2001 film, Enemy at the Gates.  A GSK whistleblower is the apparent source for the recent WSJ reports, as well as earlier reports submitted to the Company in January, and may also be responsible for the recent GSK arrests in China.  Although GSK has stated that its internal investigation of the whistleblower’s January allegations found “no evidence of bribery or corruption,” the allegations in the recent WSJ reports are embarrassing and not likely to go away anytime soon. [Read more...]

Form Over Substance: Bausch + Lomb’s ISTA Pharmaceuticals Unit Settles with U.S

ISTA Pharmaceuticals, Inc. (“ISTA”), a unit of eye care giant Bausch + Lomb (“B&L”), recently agreed to a $33.5 million Government settlement involving civil and criminal charges.  The conduct underlying the settlement pre-dated B&L’s acquisition of ISTA in June, 2012 and underscores once again that when it comes to these kinds of settlements, it’s better for companies to play ball and let the Feds have their press release. [Read more...]

Bard To Pay $51 Million To Settle Old Whistleblower Claim

C.R. Bard, Inc. (“Bard”) will pay just shy of $51 million to the Government and a former employee-turned whistleblower over allegations that the New Jersey medical device giant overbilled Medicare from January 1, 2004 through August 31, 2005 for radioactive seeds implanted into the prostate as part of a brachytherapy process.  According to the Department of Justice, Bard’s scheme to push higher sales began in 1998 and involved multiple schemes to inflate medical pricing for radioactive seeds used in the treatment of prostate cancer.  What the settlement really shows is that when it comes to Government enforcement actions, Bard and other companies remain at risk for behavior that occurred years ago.  [Read more...]