San Diego-based CareFusion Corp. yesterday, January 9, agreed to pay the government $40.1 million to settle allegations that it violated the False Claims Act by paying kickbacks and promoting its products for uses not approved by the Food and Drug Administration. The company provides healthcare products and services in areas such as infection prevention, respiratory care, and operating-room effectiveness.
According to the Department of Justice, the settlement resolves allegations that the company paid $11.6 million in kickbacks to Dr. Charles Denham while Denham was the co-chair of the Safe Practices Committee at the National Quality Forum, a nonprofit that recommends standardized health performance measures and practices.
The government says the payments were meant to induce Denham to recommend and promote use of ChloraPrep by healthcare providers. ChloraPrep was approved by the Food and Drug Administration, but the justice department says that between 2009 and 2011, CareFusion knowingly promoted ChloraPrep for uses not approved by the FDA.
CareFusion stock, which trades on the New York Stock Exchange, closed yesterday at $41.25. This morning, the stock is down 0.48 percent, or 20 cents, in early trading.