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Pharmaceutical firm pays to settle kickback charges

San Diego's Victory Pharma to pay $11.4 million to settle charges of paying kickbacks to doctors

The Justice Department announced in Washington today (December 27) that San Diego-based Victory Pharma Inc. has agreed to pay $11.4 million to resolve civil and criminal liability from its marketing of pharmaceutical drugs Xodol, Fexmid, and Dolgic. The government alleged that Victory promoted its drugs by paying kickbacks to doctors to get them to write prescriptions for Victor's products, including prescriptions for patients covered by Medicare and other federal health insurance programs. The kickbacks included tickets to sporting events and concerts, golf and ski outings, and dinners at expensive restaurants. The settlement resolves a whistleblower complaint by a former Victory salesman. Under a provision of the False Claims Act, the whistleblower, Chad Miller, will receive $1.7 million.

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The Justice Department announced in Washington today (December 27) that San Diego-based Victory Pharma Inc. has agreed to pay $11.4 million to resolve civil and criminal liability from its marketing of pharmaceutical drugs Xodol, Fexmid, and Dolgic. The government alleged that Victory promoted its drugs by paying kickbacks to doctors to get them to write prescriptions for Victor's products, including prescriptions for patients covered by Medicare and other federal health insurance programs. The kickbacks included tickets to sporting events and concerts, golf and ski outings, and dinners at expensive restaurants. The settlement resolves a whistleblower complaint by a former Victory salesman. Under a provision of the False Claims Act, the whistleblower, Chad Miller, will receive $1.7 million.

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CASH, STRIP CLUBS AND LAP DANCES, VEGAS TRIPS PART OF KICKBACKS. Boston-based law firm Ellis & Rapacki, which represented the whistleblower in the Victory Pharma agreement, says that physicians and their staffs got kickbacks of cash and outings at stripper clubs including lap dances. Included was an all-paid trip to Vegas for a physician's staff and a payment to help one physician pay off his mortgage. Earlier this month, the same law firm represented a whistleblower that resulted in a large pharmaceutical company paying $109 million to the federal and state governments.

Dec. 27, 2012

As you indicated, Don, tickets to sporting events, concerts and expensive dinners are not the only "kickbacks". Health care providers can score big dollars when they participate in pharmaceutical company promotions that "market the spread." These programs tune in providers to the hefty margin between the cost of some off-label drugs and the of amount Medicare reimburses physicians for the drugs. Some drug companies then sweeten the pot by offering high volume discounts. The result is escalating dosage levels for high priced drugs to the benefit of the drug companies and physician/providers and to the detriment of the Medicare program and patient safety. It is depressing to read through the list pharmaceutical companies successfully prosecuted under the False Claims Act this year alone. Without whistleblowers and qui tam action, many would have gone unprosecuted.

Dec. 30, 2012

Catbird: I agree that whistleblower and qui tam cases, in which a citizen cooperates with the government, and gets part of the reward, is a good solution in most cases. There are abuses, yes, but the biggest abuse is the failure of regulators to pursue wrongdoing in the fields they are supposed to monitor. Best, Don Bauder

Dec. 30, 2012

I remember a HUGE qui tam case here about 20 years ago- the National Health Labs case.......remember them Don.....NHL did blood work and testing, through overnight delivery. They almost went BK but did comeback form it.

Dec. 30, 2012

SurfPup: Oh yes, after the case was resolved, the company fled town. Best, Don Bauder

Dec. 31, 2012
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