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Daiichi Sankyo whistleblower awarded $6 million

Global pharma Daiichi Sankyo Inc. agreed to pay the United States and state Medicaid programs $39 million to resolve allegations that it paid kickbacks to doctors so they would prescribe the company’s drugs.

The DOJ said Friday the settlement stems from a complaint filed by Kathy Fragoules, a former Daiichi sales representative, under the whistleblower provisions of the False Claims Act.

The FCA authorizes private parties to sue on behalf of the United States and to receive a portion of any recovery.

Fragoules will receive $6.1 million from the federal recovery.

Daiichi is based in Japan. Its U.S. headquarters are in New Jersey.

Joyce Branda, head of the DOJ’s civil division, said the federal Anti-Kickback Statute prohibits payments intended to influence a physician’s ordering or prescribing decisions. The law is meant to ensure that physicians’ medical judgment is not compromised by improper payments and gifts by other health care providers.

The DOJ alleged that Daiichi paid doctors kickbacks in the form of speaker fees as part of its Physician Organization and Discussion programs, known as “PODs.” The program ran from 2005 through 2011. Daiichi used it to help sell its drugs, including Azor, Benicar, Tribenzor and Welchol, the DOJ said.

Payments went to doctors even when they spoke only to their own staffs at expensive Daiichi-paid dinners, the DOJ alleged.

Carmen Ortiz, the U.S. Attorney for Massachusetts, said: “Drug companies are prohibited from using lavish entertainment and padded speaker program payments to induce physicians to prescribe their drugs for beneficiaries of federal health care programs,”

As part of the settlement, Daiichi agreed to enter into a corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General. The five-year agreement obligates the pharma to enhance its compliance program.

Since January 2009, the DOJ has recovered more than $23.3 billion through False Claims Act cases. More than $14.9 billion of that amount was recovered in cases involving fraud against federal health care programs.

The DOJ said Friday that claims settled by the agreement are allegations only and there has been no determination of liability.

The case is U.S. ex rel. Fragoules v. Daiichi Sankyo, Inc., Civil Action No. 10-10420 (D. Mass.).


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

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1 Comment

  1. why settle?

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