Life Sciences

DOJ recovers $1.34B in fraud, false claims in FY 2008

Device Regulation Alert: Safety, Compliance and Reimbursement News, November 17, 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 and includes both suits filed by whistleblowers and the government.

Kyphon, now part of Medtronic Spine, paid $75 million to settle allegations that it knowingly caused the submission of false claims to Medicare for its kyphoplasty procedure–a minimally-invasive surgery used to treat compression fractures of the spine.

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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