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K&M Represents Whistleblower in $45 Million Settlement against Par Pharmaceutical Company, Inc.
Tuesday, March 5th, 2013
Kenney & McCafferty is proud to announce that it represents a key Par Pharmaceutical insider whose knowledge, information, and evidence were central to Par’s decision today to pay $45 million to settle civil and criminal allegations. The settlement resolves allegations that Par willfully defrauded Medicare, Medicaid, and other government funded health care programs in connection with the launch of a long-term care sales force to promote Megace ES for off-label uses, including weight loss in elderly patients.
Kenney & McCafferty represented whistleblower Christine Thompson, who filed a qui tam action against Par arising from this misconduct. As a result of her efforts in coming forward with this information as well as her assistance throughout the government’s investigation, Ms. Thompson is entitled to receive a percentage of the government’s civil recovery.
To read more about the Par case, including the complaint, click here.
Tags: health care, Healthcare, off-label marketing, Par, Par Pharmaceutical, Qui Tam, whistleblower
Posted in False Claims Act, government fraud, Press Release, Recent News | Comments Off
K&M Represents Whistleblower in $762 Million Settlement against Amgen, Inc.
Wednesday, December 19th, 2012
Philadelphia, December 19, 2012 – Amgen used illegal interlocking off-label marketing and pricing schemes to promote its multi-billion dollar anemia drug Aranesp. “It really was an ingenious, comprehensive, and very well coordinated series of marketing schemes that unfortunately endangered patients while enriching doctors for writing off-label prescriptions. There is no doubt that the schemes were wildly successful and significantly spiked Aranesp sales.
“What Amgen didn’t know after it launched the Aranesp schemes was that our client, Jill Osiecki, a long-time marketing rep, recognized the danger to patients and, on her own, reported her concerns to the Government. Later, Department of Health and Human Services Office of Inspector General Special Agents asked her to work undercover for them,” said qui tam whistleblowers’ attorney Brian Kenney, of Kenney & McCafferty, P.C.
“Jill has a master’s degree, spent 15 years at Amgen and before leaving the company, was a top performer in the biotech giant’s top-performing district. In August 2004 she was so troubled by the Amgen schemes, which she feared were putting patients at risk, that she promptly contacted the Government and went undercover at special agents’ request to make numerous recordings in five different states at national, regional, and district meetings,” said Tavy Deming of Kenney & McCafferty, P.C., who also represents Ms. Osiecki.
“At the 13 sales and marketing meetings I secretly recorded over 18 months at the request of federal authorities I’d hear speakers jokingly tell participants to turn off their tape recorders, or express the hope that no one was recording their session. Those comments were always followed by uproarious laughter. I laughed too, outside and inside, knowing the wire I wore was bringing that guilty comment directly to the Government,” Ms. Osiecki said in a personal statement.
Eight-Year Investigation
Now, after eight years, her undercover work and the breadth of the evidence and information she provided in her case became a key to the federal Government’s global settlement with Amgen for $762 million. The global settlement is comprised of a $612 million civil settlement, a $14 million criminal forfeiture payment and a $136 million criminal fine.
“We know of the many hundreds of hours she devoted at personal risk to advance this investigation and her years of hiding in plain sight as the Government investigated all the Amgen allegations,” according to Deming.
Under the federal False Claims Act (“FCA”) qui tam actions allow private citizens with knowledge of fraud to help the Government recover ill-gotten gains and additional civil penalties. The FCA allows the Government to collect up to three times the amount it was defrauded, in addition to civil penalties from $5,500 to $11,000 per false claim.
In successful qui tam whistleblower cases in which the Government intervenes, whistleblowers are entitled to receive a percentage of qui tam recoveries, typically 15-to-25 percent, generally known as, “the relator’s share.”
While six drugs are identified in Osiecki’s Complaint, the most egregious allegations concern Aranesp, an “ESA” (Eythropoesis Stimulating Agent), FDA-approved to increase red blood cell production to treat anemia in dialysis and cancer patients undergoing chemotherapy.
Off-Label Marketing Opportunity
In 2003 Amgen perceived an off-label marketing opportunity for Aranesp when arch competitor Johnson & Johnson halted studies of its “Procrit” branded ESA in cancer patients after the patients developed a higher-than-expected number of blood clots. Ironically, Amgen had licensed Epogen to Johnson & Johnson to help fund the drug’s development. Amgen had initially agreed to restrict its own use for dialysis, while Johnson & Johnson’s Procrit had broader cancer-related Medicare coverage, including, “Anemia of Chronic Disease.”
The market for the treatment of anemia in cancer patients who are not receiving chemotherapy was three times the size of the market for Aranesp’s lone FDA-approved oncology use: chemotherapy-induced anemia. To exponentially grow Aranesp’s sales and market share, Amgen developed a scheme to permeate this lucrative market from which Johnson & Johnson removed Procrit by promoting Aranesp for this off-label use, a condition that Amgen branded “Anemia of Cancer” (“AOC”).
To execute its Aranesp scheme Amgen sponsored a small pilot study purporting to show that Aranesp was effective for this condition, although that study’s parameters were clinically inadequate to substantiate the safety or efficacy of Aranesp for this off-label use. Next, Amgen gamed Medicare reimbursement regulations by using the study to obtain coverage of Aranesp for AOC in an influential medical publication that lead to Medicare coverage for what, in fact, was an untested use.
Profiting From “The Spread”
Physicians were only too happy to switch to Aranesp when they were shown a “cost calculator” by Amgen marketing reps detailing how much they could profit from the spread between what Medicare reimbursed physician practices for the drug and the doctors’ far cheaper acquisition cost. Additionally, through its false price reporting scheme, Amgen was able to create the spread so that medical practices profited handsomely from on- and off-label overuse of Aranesp, Kenney, who is a former federal prosecutor, explained.
The ugly truth about Amgen’s AOC scheme became public in January 2007, when Amgen was forced to reveal that its own Aranesp clinical studies demonstrated that Aranesp increased the risk of death when used to treat certain cancer patients.
“When it launched the Aranesp scheme Amgen already was on notice of the potential dangers from using Aranesp in cancer patients based upon the unfavorable results of the Procrit study, but Amgen put profits first,” Kenney said. The global settlement does not identify any patient deaths but, “it’s safe to assume that many terminally ill patients not only failed to have the quality of their remaining lives improved but could have died earlier than necessary,” he added.
Marketing Off-Label Prohibited
While physicians are free to prescribe drugs for off-label uses, pharmaceutical companies are prohibited from marketing the drugs for uses that have not been FDA approved. Generally, government-funded healthcare programs such as Medicare and Medicaid preclude reimbursement for off-label prescriptions. When a pharmaceutical company’s illegal marketing practices cause off-label prescriptions to be written by doctors, and those prescriptions are paid for by federal Medicare and Medicaid dollars, the payment becomes an actionable FCA violation.
In addition to agreeing to pay a $612 million civil settlement and to plead guilty to criminal charges of misbranding of Aranesp, as part of the Settlement Agreement Amgen agreed to be bound by a Corporate Integrity Agreement (“CIA”) with the Office of Inspector General of the United States Department of Health and Human Services (“OIG-HHS”).
The federal investigation into Amgen’s marketing practices was conducted through a collaborative effort of the U.S. Department of Justice, and the U.S. Attorney’s Offices for the Eastern District of New York. The New York State Assistant Attorney General’s Office led the investigation on behalf of the states and the National Association of Medicaid Fraud Control Units (“NAMFCU”).
To read a statement by Ms. Osiecki, click here.
To read the complaint filed on behalf of Ms. Osiecki, click here.
To read the Settlement Agreement, click here.
About Kenney & McCafferty, P.C.:
Kenney & McCafferty, PC is the one of the most successful national law firms specializing in representing qui tam, tax, and SEC whistleblowers.
If you have knowledge of fraud or a false claim made against the government, please contact our qui tam lawyers today. Kenney & McCafferty attorneys will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys during these consultation services are confidential and protected by the attorney-client privilege.
Tags: 762 million, Amgen, Anemia of Cancer, AOC, Aranesp, ESA, Eythropoesis Stimulating Agent, Jill Osiecki, medicare fraud
Posted in False Claims Act, Press Release, Recent News | Comments Off
Get Smart about Whistleblowing – Retaliation is Human Nature
Monday, February 7th, 2011
In 2008 Judith Moldover, Senior Staff Attorney of the Lawyer’s Alliance of New York, stated, “[R]etaliation is human nature.” Moldover made the statement to a group of human resources professionals at a conference sponsored by the Society for Human Resource Management. As one who spent most of her career defending employers, Moldover warned the HR crowd that retaliation claims would increase because there is an almost “irresistible urge to strike back” against employees who complain about problems or who file lawsuits against their employers. Kenney & McCafferty speaks every day to victims of retaliation. Perhaps because retaliation is so ingrained, employees who speak out against fraud, waste, or wrongdoing should expect their bosses to retaliate against them. The only thing employees can do is smarten up. Figure out if you are a likely target of retaliation as early as you can. Assess whether you have a viable whistleblower claim. And, think twice about making any further reports to your boss.
If you believe your boss is genuinely trying to improve the workplace and wants your input, make good faith reports of problems, at least once or twice. Some employers will do the right thing, and some will even be grateful. Many will not. As Moldover points out, no one likes to hear about problems, and most employers would rather hear that their departments or companies are running well than hear a report of non-compliance or a misuse of company funds. Sometimes a whistleblower can assess the workplace environment and get clues about how a particular supervisor will react to reports of fraud, waste, or abuse.
Suppose you make a report. How does your boss react? Does your boss correct the wrongdoer, or give him more support? Does your boss try to blame the problem on you? Does your boss try to diminish your value to the company somehow? Does your boss suddenly give greater weight to petty workplace problems of yours when those were previously tolerated? Does your boss suddenly give you demeaning work assignments? Does your boss allow others to be rude to you? Are your resources taken away, while wrongdoers get more resources? Does your access to the boss decrease? Does the wrongdoer get more access? Is the wrongdoer emboldened somehow? Does your boss suddenly chastise you in ways that never happened before? Are you passed over when it comes time to hand out plum assignments? Signs of retaliation can be subtle or obvious, but when whistleblowers look back, they often realize that they had observed specific small behaviors that indicated they would be punished for their efforts to address fraud. If your boss shows signs of retaliation against you, even in small ways, step back, and assess the situation.
Unfortunately, most whistleblowers are people of high integrity and perhaps undue optimism. They see little, subtle signs of retaliation like those described above, but they don’t want to be involved in covering up fraud, or they just can’t bring themselves to gloss over a co-worker’s misconduct. Sometimes, they just have too much faith that their companies will appreciate their efforts. By the time the hapless whistleblower contacts an attorney, it’s too late. The well meaning, smart, trustworthy supporter of the company has experienced high level retaliation – attacks on reputation, bad performance appraisals, demotion, and perhaps, loss of job. Despite well publicized reporting protections, retaliation can take many forms, and even in serious, obvious cases, it takes a long time to be made whole when an employer retaliates against you. Think twice before making that report to a boss who doesn’t want to hear it.
Of course, many employees don’t have much choice about whether or not to report fraud, waste, and abuse. Compliance officers, auditors, attorneys – these and many other occupations require one to take action of some sort when encountering fraud. All employees can and should take steps to protect themselves when reporting misconduct and illegal behavior. In cases where government money is involved, even indirectly, the whistleblower should get legal advice early. A workplace insider who reports government fraud can be an important asset to government prosecutors in a False Claims action, for example. A terminated employee is often less valuable.
K&M would like to help you assess whether you have a viable whistleblower claim and what steps you can take to protect yourself in the process of addressing government fraud. If you know of government fraud in your workplace, and you suspect even a hint of possible retaliation, call K&M for a free, expert consultation today.
Tags: abuse, corporate fraud, False Claims Act, fraud, government fraud, health care fraud, pharmaceutical fraud, retaliate, retaliation, Tax Fraud, tax whistleblower, waste, whistle blower, whistle blowing, whistleblower, whistleblowing, wrongful termination
Posted in Abusive Tax Shelters, Corporate Tax Fraud, Employment Tax Fraud, False Claims Act, IRS Whistleblower Office, Money Laundering Tax Fraud, Offshore Accouts Fraud, Press Release, retaliation, SEC Whistleblower Program, Tax Fraud | Comments Off
