US Bioservices will pay $13.4 million to settle government claims that it violated the False Claims Act (FCA) by encouraging patients to unnecessarily refill prescriptions of the iron chelation drug Exjade in exchange for kickbacks in the form of referrals from the drug’s maker Novartis, according to filings in New York federal court Tuesday. US Bioservices Corp. will pay about $10.6 million to the federal government and $2.8 million to several states. Additionally, US Bio will admit several key facts about its relationship with Novartis Pharmaceuticals Corp. Acting U.S. Attorney for the Southern District of New York Joon H. Kim stated:
The core allegation is that, from August 2010 to March 2012, US Bio violated the [Anti-Kickback Statute] and the FCA by participating in an arrangement with Novartis under which US Bio could receive more Exjade patient referrals and related benefits in return for achieving a higher Exjade refill percentage than Accredo and BioScrip.
The government said in the complaint that US Bio acquiesced to pressure from Novartis to compete with Accredo and BioScrip for referrals despite knowing that this violated anti-kickback laws. The complaint states:
US Bio trained its nurses to call and tell Exjade patients that not treating iron overload, for which Exjade is prescribed, could have severe consequences like organ failure, and that while Exjade had certain common side effects like diarrhea, such side effects typically went away with time. Second, US Bio also assigned a group of patient care coordinators to call Exjade patients and encourage them to order refills.
The scheme earned US Bio hundreds of dollars each year in the form of service fees and rebates, the complaint says.
In 2011, a Novartis marketing employee, David Kester, filed a qui tam action claiming that the company engaged in kickback arrangements with the three specialty pharmacies, including US Bio. The government reached settlements with BioScrip in January 2014, Accredo in April 2015, and Novartis in November 2015. After Kester litigation was resolved, the government began investigating US Bio’s involvement with Exjade.
The case is United States v. US Bioservices Corp, (case number 1:17-cv-06353) in the U.S. District Court for the Southern District of New York.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.