Corporate Compliance

Drug company pays $3.5 million to resolve allegations of improperly administering pills

Compliance Monitor, February 24, 2010

To resolve allegations of the False Claims Act, Eon Labs Inc. will pay the United States $3.5 million in relation to administering Nitroglycerin sustained release (SR) capsules, according to a Department of Justice (DOJ) press release.
Eon Labs continued to administer Nitroglycerin SR capsules after a 1999 FDA investigation determined the drug lacked substantial evidence of effectiveness. According to the government, the FDA’s decision made the drug ineligible for reimbursement from Medicaid.
According to the DOJ, Eon submitted false quarterly reports to the government failing to disclose Nitroglycerin SR’s regulatory status and unqualified status for Medicaid coverage. Thus, the DOJ contends that Eon knowingly caused false claims to be submitted for reimbursement.
A whistleblower filed the case on behalf of the government under the qui tam provisions of the False Claims Act. The whistleblower will receive approximately $525,000 of the recovery.

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