Corporate Compliance

Kos Pharmaceuticals to pay more than $41 million to resolve kickback and off-label promotion allegations

Compliance Monitor, December 15, 2010

Kos Pharmaceuticals agreed to pay more than $41 million to resolve claims that it offered illegal provider kickbacks to induce them to prescribe drugs Advicor and Niaspan, according to a Department of Justice (DOJ) press release.

According to the DOJ, the settlement resolves allegations that Kos offered and paid illegal kickbacks in the form of money, free travel, grants, honoraria, and other valuable goods and services to physicians, other medical professionals, physician groups, and managed care organizations.

The settlement also resolved claims that Kos illegally promoted the use of Advicor as first-line therapy for management of mixed dyslipidemias, a disruption of the lipids in the blood. The Food and Drug Administration did not approve Advicor for that use.

Kos also entered into a deferred prosecution agreement that charges the company with conspiring to violate the anti-kickback statute. Specifically, Kos made a series of payments to two physicians or a third-party intermediary in the form of sponsorship of continuing medical education classes in exchange for prescribing Kos products. Kos has agreed to pay a $3.36 million criminal fine as a condition of the deferred prosecution agreement. The DOJ agreed to the deferred prosecution based on Kos’ thorough internal investigation of the violations and reports to the department.

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