Pharma Firm to Pay $39M to Settle Kickback Claims

(CN) - The global pharmaceutical firm Daiichi Sankyo Inc. will pay $39 million to settle claims by 48 states and the District of Columbia that it wined and dined physicians to get them to prescribe the company's drugs.

The litigation grew from the revelations of whistleblower Kathy Fragoules, a former Daiichi sales representative, who in 2010 accused the firm of causing false health insurance claims for its drugs Azor, Benicar, Tribenzor and Welchol, by cozying up to doctors and showering them with everything from lavish meals to exorbitant fees for speaking engagements.

Fragoules claimed the company, which has its U.S. headquarters in Parsippany, N.J., began engaging in these activities in January 2004, and the state's would claim they continued through March 2011.

The state's sued seeking damages for tainted claims made to Medicaid and other government-funded healthcare programs.

Under the terms of the settlement, the money paid by Daiichi Sankyo will go mainly to state and federal Medicaid programs. New York State, which led the litigation, will receive just over $2.3 million as part of the deal.

The settlement covers every states except for Arizona.

In a statement, Daiichi Sankyo said it cooperated with investigators at all times throughout the investigative process.

"We are pleased to have finalized these agreements and remain focused on our core mission of helping people live healthy and meaningful lives," said Ken Keller, president of the company's U.S. operations. "We are committed to being an ethical, trusted and respected company, and constantly improving how we operate is part of our culture. As part of our compliance program, we continue to review and strengthen our policies, procedures and processes to ensure compliance with applicable laws, regulations and industry standards, and to meet our own high ethical standards."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit