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$11.4 Million for Drug Kickbacks

SAN DIEGO (CN) - San Diego-based Victory Pharma will pay $11.4 million in civil and criminal fines for paying kickbacks to doctors who prescribed its drugs, federal prosecutors said.

Victory entered a deferred-prosecution agreement, agreed to pay a criminal forfeiture of $1.4 million and another $9.9 million to resolve False Claims Act allegations, the U.S. Attorney's Office said.

It paid kickbacks to doctors who prescribed its Naprelan (Naproxen), Xodol (acetaminophen with hydrocodone), Fexmid (cyclobenzaprine, a muscle relaxant), and Dolgic (acetaminophen with butalbital, a barbiturate). Some of the patients were on Medicare.

"The kickbacks included tickets to professional and collegiate sporting events, tickets to concerts and plays, spa outings, golf and ski outings, dinners at expensive restaurants, and numerous other out-of-office events," the U.S Attorney's said in a statement. "Victory also encouraged its sales representatives to schedule paid 'preceptorships,' which involved sales representatives 'shadowing' doctors in their offices. The settlement also resolves allegations that Victory improperly used these preceptorships to induce doctors to prescribe Victory's products."

The prosecutions began when a former Victory sales rep, Chad Miller, filed a qui tam whistleblower complaint. Miller will get $1.7 million from the settlement.

The Justice Department said it has recovered $13.9 billion under the False Claims Act since January 2009, $10.1 billion of it from health care fraud.

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