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DOJ joins whistleblower suit against Dey; Pfizer wins whistleblower suit of its own

Pharma Compliance Alert, September 13, 2006

The U.S. Department of Justice has intervened in a whistleblower suit against the drugmaker Dey, Inc., alleging that the company violated the False Claims Act.

The government's complaint alleges that from at least January 1, 1993, Dey reported prices that were more than 500% the actual sales prices of its drugs. The United States also claims that Medicare and Medicaid have reimbursed Dey's customers more than $500 million for the drugs.

The investigation began after Ven-a-Care of the Florida Keys, a small home-infusion company and frequent whistleblower, filed a civil False Claims Act suit. The whistleblower stands to receive a share of between 15% and 25% of the amount recovered. Read the Department of Justice's statement about the suit on its Web site.

Dey says it "unequivocally denies" wrongdoing. John Kling, the company's senior vice president of legal, said in a prepared statement that "when virtually an entire industry is sued.it indicates that the real issue is.the government's own reimbursement system." The company points to the flawed average wholesale price reimbursement model as the culprit and says it will "vigorously defend" itself in court.

Pfizer, meanwhile, was victorious last week when a judge dismissed a whistleblower suit filed by former company executive Peter Rost, who accused the company of promoting off-label uses for the growth hormone Genotropin.

The judge ruled that Rost lacked evidence that Pharmacia and Pfizer had submitted bills to the government for reimbursement, reports Brandweek. Ross has said he will appeal the ruling.

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