Medco to Pay $7.9 Million to Resolve Kickback Allegations
Medicare fraud cases come in many different forms but there is always one common component across these cases: each accusation of fraud decreases the public’s trust in the health care system more and more. This is precisely why the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative was created. The Attorney General and the Secretary of Health and Human Services partnered up in order to crack down on Medicare and Medicade fraud and (hopefully, someday) reestablish the public’s trust in the health care system. In May of 2015 HEAT brought to justice yet another company accused of fraud.
Medco Health Solutions Inc.—a wholly-owned subsidiary of the pharmacy benefit manager Express Scripts Holding Company that provides pharmacy benefit management services to clients who receive subsidies under the Medicare Retiree Drug Subsidy program—agreed to pay the government $7.9 million to settle allegations that it engaged in a kickback scheme in violation of the False Claims Act. This qui tam Medicare lawsuit settlement was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the District of Delaware and the U.S. Department of Health and Human Services-Office of the Inspector General.
This settlement revolved allegations that Medco solicited remuneration from AstraZeneca, a pharmaceutical manufacturer, in exchange for identifying Nexium as the “sole and exclusive” proton pump inhibitor on certain of Medco’s Prescription drug lists known as formularies. The United States alleged that Medco received some or all of the remuneration from AstraZeneca in the form of reduced prices on the following AstraZeneca drugs: Prilosec, Toprol XL and Plendil. The United States contended that this kickback arrangement between Medco and AstraZeneca violated the Federal Anti-Kickback statute, and thereby caused the submission of false or fraudulent claims for Nexium to the Retiree Drug Subsidy Program. Earlier this year, in January, the United States and AstraZeneca reached a $7.9 million settlement to resolve kickback allegations arising out of the same conduct. It’s important to note that the claims settled by this agreement are allegations only. There has been no determination of liability.
It is of the utmost importance that cases like these be brought to light. As stated by Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, “Hidden financial agreements between drug manufacturers and pharmacy benefit managers can improperly influence which drugs are available to patients and the price paid for drugs.”
This civil settlement resolves a qui tam lawsuit filed by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle on behalf of the government. Lawsuits like these are filed under the False Claims Act and those private citizens who come forward and file are entitled to a share of the settlement, known as whistleblower rewards. The former AstraZeneca employees’ share of the settlement has not yet been determined.