Office of the Attorney General
Attorney General Conway Announces Medicaid Fraud Settlement with Pharmaceutical Company
Attorney General Jack Conway announced today that his Office of Medicaid Fraud joined the federal government to reach an agreement in principle with the pharmaceutical manufacturer Daiichi Sankyo, Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey. The agreement settles allegations that the company violated the law by using lavish meals and speaker program payments as kickback vehicles to induce physicians to prescribe the drugs Azor, Benicar, Tribenzor, and Welchol. As a result, Daiichi Sankyo will pay the states and the federal government $39 million in civil damages and penalties for Medicaid and other federally-funded health care programs. Kentucky's share of the settlement is $46,589.09.
The investigation that led to the settlement grew out of a false claims action filed by a former Daiichi Sankyo sales representative in 2010. The whistleblower's complaint alleged that the Medicaid claims were false because they resulted from kickbacks that Daiichi Sankyo provided to physicians who prescribed the drugs. The kickbacks took the form of speaker payments, meals, and other compensation to physicians who participated, or claimed to have participated, in Physician Opinion & Discussion programs between January 1, 2005 and March 31, 2011, and in other promotional speaker programs between January 1, 2004 and February 4, 2011.
The settlement agreement reimburses the federal government and participating states for damages that were assessed in accordance with the amounts that Daiichi Sankyo expended on each speaker program for each fiscal year. Additionally, as part of the settlement, Daiichi Sankyo has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG), which obligates Daiichi Sankyo to undertake substantial internal compliance reforms for the next five years. Forty-nine states, including Kentucky, and the District of Columbia are participating in the settlement. The federal settlement was announced by the Justice Department in January of this year.
Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has recovered or been awarded more than $260 million for the state and federal Medicaid programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.
In 2013, General Conway's Medicaid Fraud Unit was named one of the most aggressive in the country by the nonprofit watchdog group Public Citizen.
The Attorney General's tip line for reporting allegations of Medicaid fraud is 1-877-228-7384.