Warner Chilcott to Pay $125 Million in Criminal Health Care Fraud Settlement

In late 2015, Warner Chilcott agreed to plead guilty to a felony charge of health care fraud and to pay $125 million to resolve claims of illegal marketing of several prescription drugs.

The Warner Chilcott plea agreement was part of a larger settlement with the U.S. Department of Justice (DOJ) in which the pharmaceutical company agreed to pay $125 million and to plead guilty over accusations of illegal marketing activities. In addition to the company’s civil and criminal liability, several company executives were also charged or pleaded guilty.

Warner Chilcott Paid Kickbacks

The company was accused of committing felony violations by paying kickbacks to physicians who agreed to prescribe their medications, of manipulating prior authorizations to get drugs reimbursed, and of making unproven marketing claims. Warner Chilcott drugs that were named in kickback and illegal marketing schemes included Actonel®, Asacol®, Atelvia®, Doryx®, Enablex®, Estrace® and Loestrin®

The DOJ charged that between 2009 and 2013, Warner Chilcott provided payment or remuneration to physicians to get them to prescribe certain medications. Payments were often associated with medical or continuing “education” events, in which little or no education was provided. These events were held at expensive restaurants or other high-priced venues and physicians were listed and paid as “speakers” to encourage high-volume prescribing.

Fraudulent Insurance Claims

In addition, from 2011 to 2013, Warner Chilcott directed employees to submit fraudulent or misleading prior authorization requests to insurance companies, including federal health care programs. The false and misleading information was provided in order to get more expensive Warner Chilcott drugs covered even when a less expensive formulary medication may have sufficed.

 In some cases, Warner Chilcott employees submitted medical justifications directly to the insurance companies, holding themselves out to be physicians. In other cases, sales representatives provided “canned” justifications or coached medical staff through the prior authorization process to get Warner Chilcott drugs approved by the insurance companies.

Under the terms of the plea deal, Warner Chilcott agreed to plead guilty and pay a criminal fine of $22.94 million. The company also agreed to a $102.06 million payment to settle civil complaints regarding violation of the federal Anti-Kickback Statute. Approximately $10.6 million of the settlement went to state Medicaid programs.

The Whistleblower Lawsuit

The civil lawsuit portion of the Warner Chilcott agreement was filed under the False Claims Act which provides whistleblower protection. Seeger Weiss LLP represented two former Warner Chilcott pharmaceutical sales representatives who brought the qui tam “whistleblower” lawsuit after they were expected by their employer to participate in illegal activities. The former Warner Chilcott employees also actively cooperated with a lengthy government criminal investigation which resulted in  criminal indictments for several company executives, managers and physicians.

As part of the resolution, the whistleblowers were eligible for approximately $22.9 million from the federal portion of the civil payment agreement. The payment provision allows the government to compensate whistleblowers who may have sacrificed financial security, status and employment and provides incentive to help combat fraud in the healthcare and other areas of government contracting.

Seeger Weiss is a leader in qui tam “whistleblower” and False Claims Act litigation. If you know of improper Medicaid or Medicare billing practices or other fraudulent activity, speak to an attorney experienced in whistleblower lawsuit.

Sources:

Warner Chilcott Agrees to Plead Guilty and Pay $125 Million in Felony Health Care Fraud, U.S. Department of Justice (10/2015)

Warner Chilcott to Pay $125 Million to Resolve Kickback Allegations; Seeger Weiss LLP Represented Relators in Historic Healthcare Fraud Whistleblower Lawsuit, PR NewsWire (10/2015)

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