Life Sciences

Pharma settlements help DOJ recover $1.34B in FY 2008

Pharma Compliance Alert, November 19, 2008

The Department of Justice (DOJ) recovered $1.34 billion through fraud and false claims settlements in fiscal year (FY) 2008, according to a DOJ press release.

The majority of the recoveries—$1.12 billion—came from healthcare fraud. The settlements include both suits filed by whistleblowers and the government.

Merck’s $361 million settlement to resolve pricing fraud and kickback allegations was among the largest of the year. In addition, Cephalon agreed to a $258 million settlement to resolve allegations of off-label marketing.

Typical allegations against pharmaceutical and medical device companies include:

  • Off-label marketing
  • Paying kickbacks to physicians, wholesalers, and pharmacies to induce drug or device purchases
  • Establishing inflated drug prices, then marketing the “spread”
  • Knowingly failing to report the company’s true “best price”

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