Allergan subsidiary settles kickback charges for $38M
- Allergan subsidiaries Forest Laboratories and Forest Pharmaceuticals have agreed to pay $38 million to settle a federal investigation into alleged kickbacks used to encourage doctors to prescribe the drugs Bystolic, Savella and Namenda.
- Under the settlement, Forest will pay $35.5 million to the federal government and $2.5 million to state Medicaid programs to resolve the charges.
- This isn't the first time that Forest has run afoul of the False Claims Act. In 2010, the company agreed to pay over $313 million to resolve criminal and civil liability for Levothroid, Celexa and Lexapro.
The past month has seen a number of companies paying up for past misconduct. Bristol-Myers Squibb was hit with a $19.5 million fine for alleged improper marketing and promotion, and Pfizer, along with its drug distributor Flynn Pharma, will pay nearly $90 million for charging "excessive and unfair prices" in the U.K.
In the case of Allergan's subsidiary Forest, the Department of Justice accused the drugmaker of paying doctors kickbacks — under the guise of medical education and speaker programs — to prescribe its drugs. The payments were deemed "improper inducements" because Forest provided payments and meals to doctors even when the events and programs were canceled, or even if no licensed health care professional attended.
“Kickback schemes undermine the integrity of medical decisions and increase the costs of health care for everyone,” said Benjamin C. Mizer, Principal Deputy Assistant Attorney General at the DOJ's Civil Division.
The investigation was kick started by a lawsuit filed by former Forest employee Kurt Kroenig through the whistleblower provisions of the False Claims Act. Kroening will receive about $7.8 million.
Allergan, in a statement on the settlement, was quick to point out that the investigation covered a time period before the current management team was put in place.
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