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Sanofi whistleblower alleges massive kickback scheme, says $1 billion ‘missing from company’

A former paralegal for Sanofi claims she was fired in September in retaliation for revealing a huge scheme involving kickbacks to doctors that violated U.S. federal law.

Diane Ponte filed the lawsuit in New Jersey Superior Court in Newark. It names as defendants Sanofi, former CEO Christopher Viehbacher, Sanofi General Counsel Robert DeBerardine, Sanofi’s former vice president of its U.S. diabetes business, Dennis Urbaniak, and the ex-assistant vice president of special projects, Raymond Godleski, CNBC reported Wednesday.

The lawsuit claims that Viehbacher and other executives “conducted a scheme in violation of federal law to funnel tens of millions of dollars in kickbacks and other incentives to get the company’s diabetes drugs prescribed and sold,” the report said.

Ponte, 53, worked at Sanofi for 13 years. Her suit also alleges that Viehbacher was fired in October “in part, because [he] was involved in the aforesaid illegal and/or fraudulent activity,” which allegedly went on “over the course of many years.”

CNBC said,

The suit filed Wednesday says that Sanofi used contracts that appeared to be for legitimate purposes to direct money to hospitals, doctors and retail pharmacy chains to induce them to purchase and prescribe Sanofi’s diabetes medication. It also claims that “approximately $1 billion is missing from Defendant Sanofi which has not been accounted for.”

France-based Sanofi said in October that a poisoned relationship between Viehbacher and the board led to his firing.

Ponte alleges that some of the defendants “conspired and/or caused” Sanofi employees to sign off on contracts that contained illegal inducements without first obtaining approval from the company’s financing, purchasing, and law departments, CNBC said.

Sanofi said in an emailed statement: “Diane Ponte is a disgruntled former employee who is opportunistically attacking our company. Ponte filed for violations of New Jersey state employment law, specifically the New Jersey Conscientious Employee Protection Act (“CEPA”). The employment law allegations are without merit, and Sanofi will vigorously defend the suit. We take this matter very seriously and will protect our company and our reputation.”

In October, Sanofi said it was investigating possible illegal payments in the Middle East and Africa from 2007 to 2012 following allegations from an anonymous whistleblower.

Sanofi self-reported the allegations to the U.S. Justice Department and the Securities and Exchange Commission and hired New York law firm Weil Gotshal to investigate the allegations.

In late 2012, Sanofi agreed to pay $109 million to settle charges that it violated the False Claims Act by providing free drugs as a form of kickbacks to doctors.

The settlement involved sales practices for the drug Hyalgan, a knee injection to treat arthritis.

The DOJ alleged that Sanofi sales representatives were given thousands of free “sample” Hyalgan syringes and used the free drug as kickbacks.

As part of the settlement, Sanofi entered into a Corporate Integrity Agreement with the Office of the Inspector General of the United States Department of Health and Human Services that required enhanced compliance.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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