Jazz, subsidiary discuss settlement with U.S. Attorney
Pharma Compliance Alert, June 13, 2007
Jazz Pharmaceuticals, along with its subsidiary Orphan Medical, is discussing a possible settlement with the United States to resolve allegations of off-label marketing and fraud, the company revealed in a Securities and Exchange Commission (SEC) filing. According to Jazz, it and Orphan Medical received a subpoena from the Department of Justice last year regarding allegations about improper sales and marketing of the narcolepsy treatment Xyrem.
The subpoena related to the 2006 indictment of a physician who was accused of scheming with Orphan Medical sales reps and other employees to promote and get reimbursement for off-label uses of Xyrem, according to the filing. Then in March of 2007, a former Orphan Medical regional sales manager pled guilty to introducing a misbranded drug into interstate commerce.
According to Jazz, if it and its subsidiary complete a settlement on terms that it is currently discussing, the U.S. Attorney has indicated that the company would not be prosecuted. In that case, Orphan would plead guilty to one felony count of introducing a misbranded drug into interstate commerce and pay about $20.5 million over the next several years. The settlement would also require the company to enter into a CIA with the OIG.
Although Jazz is in negotiations with the U.S. Attorney, it warned that even if a settlement was reached, it may still be subject to regulatory and enforcement actions from others who aren't involved, such as private insurers and state attorneys general.
Read more of the filing here.
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