Kos Pharmaceuticals, a subsidiary of Abbott Laboratories, has agreed to pay $41 million to resolve criminal and civil liability arising from conduct relating to its drugs Advicor and Niaspan, the Justice Department announced today.
According to the agreement reached with the government, the Delaware-based company will pay $38 million to settle civil allegations under the False Claims Act. Specifically, the civil settlement resolves allegations that Kos offered and paid doctors, other medical professionals, physician groups and managed care organizations, illegal kickbacks in the form of money, free travel, grants, honoraria and other valuable goods and services, in violation of the Anti-Kickback Statute to get them to prescribe or recommend Niaspan and Advicor.
The United States contends that Kos promoted the sale and use of Advicor for use as first-line therapy for management of mixed dyslipidemias, a disruption of the lipids in the blood. Such an off-label use was not approved by the Food and Drug Administration nor was it a medically-accepted indication for which the United States and state Medicaid programs provided coverage for Advicor.
The federal share of the civil settlement is $33,705,310 and the state Medicaid share is $4,454,432.
As part of today’s resolution, Kos also has entered into a deferred prosecution agreement and agreed to the filing of a criminal information in U.S. District Court for the Middle District of Louisiana charging the company with one count of conspiracy to violate the Anti-Kickback Statute. According to the criminal information, Kos conspired to violate the statute by agreeing to pay physicians kickbacks in exchange for their writing prescriptions for Kos drugs.
Two doctors proposed that they would endorse the use of Kos products, including Advicor, for the treatment of cholesterol in exchange for a series of payments. Between January 2002 and June 2006, one of the doctors wrote 4,130 prescriptions for Kos products. According to the court documents, some of those prescriptions were paid for by Medicare and Medicaid.
Kos has agreed to pay a $3.36 million criminal fine as a condition of the deferred prosecution agreement.
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Key Facts
- State: Delaware
- Category: Drug Trafficking|Fraud & Financial Crimes|Violent Crime|Sex Crimes|Cybercrime|Public Corruption|Weapons|Human Trafficking|White Collar Crime|Organized Crime
- Source: DOJ Press Release ↗
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