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Drug Maker to Pay More Than $35 Million to Resolve Criminal Charges and Civil False Claims Allegations

The federal government continues to pursue companies that fail to follow programs that manage the risk that are associated with certain prescription drugs. This was proven late last month, when the Justice Department announced that Aegerion Pharmaceuticals Inc. – a subsidiary of Novelion Therapeutics Inc. – has agreed to plead guilty to charges relating to its prescription drug, Juxtapid. The government alleges that Aegerion misbranded its drug Juxtapid because it failed to comply with a Risk Evaluation and Mitigation Strategy (REMS). The resolution includes a deferred prosecution agreement relating to criminal liability under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Moreover, the settlement agreement Aegerion entered into resolves allegations that it caused false claims to be submitted to a federal health care program for Juxtapid. Finally, Aegerion entered into a civil consent decree of permanent injunction. The decree is aimed at preventing future violations of the Federal Food, Drug, and Cosmetic Act (FDCA).

“Today’s settlement shows that the government will continue to hold accountable drug companies that violate laws designed to protect the health and safety of patients,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Aegerion has agreed to plead guilty to breaking the law. The Justice Department will continue to ensure that taxpayers do not foot the bill when such conduct occurs.” From December 2012 to December 2015 – when Aegerion introduced its drug Juxtapid to the market – the government alleges that it was misbranded under the rules of the FDCA. During this period the drug was approved to treat patients with homozygous familial hypercholesterolemia (HoFH), a rare disorder. This disorder causes patients to have high levels of circulating LDL-C or “bad” cholesterol. Juxtapid carried a warning that it might cause adverse gastrointestinal reactions as well as liver toxicity. Because of this, the FDA required a Juxtapid to have a REMS. The purpose of this REMS was to educate prescribers about this risk for liver toxicity in patients.

The Justice Department provided evidence that Aegerion not only failed to give providers complete information about HoFH and how to properly diagnose it, but that they also filed a misleading REMS assessment report about the drug. Moreover, the government alleges that Aegerion’s management and sales staff distributed Juxtapid not only for the treatment of HoFH specifically but also for the treatment of high cholesterol in general. Under the terms of the plea agreement, Aegerion has agreed to pay a criminal fine and forfeiture of $7.2 million. A deferred prosecution agreement resolves allegations that Aegerion conspire to violate HIPAA, 42 U.S.C. §§ 1320d-6(a) and 1320-6(b) (3) in that it conspired to obtain patients’ personally identifiable health information without patient authorization. Under the terms of the deferred prosecution agreement, Aegerion will implement enhanced compliance provisions.

The government also alleges that Aegerion violated the Anti-Kickback Statute (AKS) by funneling funds through patient Services Inc. (PSI) an entity that claimed to be a non-profit patient assistance organization. The federal share of the $28.8 million civil false claims settlement is $26.1 million and the state portion is $2.7 million. “Aegerion put profits over patient safety and enriched itself at taxpayer expense,” said Acting U.S. Attorney William D. Weinreb for the District of Massachusetts. “Our Office is committed to protecting patient safety and the integrity of federal health care programs, and we will continue to use our criminal and civil authority to ensure that drug companies play by the rules that protect the public, ensure quality of care, and preserve patient privacy.”  This settlement resolves a lawsuit that was filed by three former employees of Aegerion, under the qui tam or whistleblower, provisions of the False Claims Act. This act permits private individuals to sue on behalf of the government for false claims and to share in any recovery. Relators will receive $4.7 million from the federal proceeds of the civil false claims settlement.