The maker of the intravenous antifungal medication Mycamine has settled a whistleblower action against the company with the U.S. government and several states for $7.3 million. The settlement agreement between defendant Astellas Pharma US Inc. and relator Frank Smith, the federal government and Medicaid-participating states was unsealed last month. The complaint was filed by Smith, the whistleblower, in 2010 in the U.S. District Court for the Eastern District of Pennsylvania, alleging violations of the False Claims Act against Astellas.
According to the settlement agreement, Astellas is to pay about $4.2 million to the government, $3.1 million to Medicaid-participating states, and $708,852 to Smith, a sales representative at Astellas who initiated the suit. The settlement includes an interest rate of 1.25 percent, applied from Dec. 18, 2013, until the day payment is rendered. The Plaintiffs alleged that Astellas sold Mycamine – a drug used to treat fungal infections of the esophagus in adults – for non-approved use for children, according to the agreement.
The U.S. government claimed that Astellas “knowingly marketed and promoted the sale and use of Mycamine for pediatric patients, when the drug had not been approved as safe and effective by the Food and Drug Administration (FDA) for such patients,” and further that “the United States and state Medicaid programs did not provide coverage for such use of Mycamine.”
According to the complaint, Astellas “aggressively marketed” Mycamine to children’s hospitals for pediatric and adolescent use and that the drug presented an “increased risk of harm” to children. It was alleged:
Particular pressure was placed on salespersons with children’s hospitals in their sales territories (including duPont Hospital for Children in Wilmington, Del., the Children’s Hospital of Philadelphia, and St. Christopher’s Hospital for Children) to market Mycamine as not only safe for children but superior to its counterpart Cancidas, even though Mycamine has no pediatric indication.
According to Assistant Attorney General Stuart F. Delery of the Department of Justice (DOJ) Civil Division and U.S Attorney Z. David Memeger of the Eastern District of Pennsylvania, the settlement showed the DOJ’s willingness to pursue companies that attempt to flout the FDA’s drug approval process. Memeger said in a statement:
It’s a message that should resonate with all drug companies: There are consequences for violating the False Claims Act and putting profit ahead of government safeguards.
The suit was filed under seal in March 2010 by a then-sales representative for Astellas, Frank Smith. Swiss drugmaker F. Hoffman-La Roche Ltd., named by Smith as a co-defendant in the suit due to a co-promotion agreement with Astellas for Mycamine, was not involved in the settlement.
Sources: The Legal Intelligencer and Law360.com
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