A former pharmaceutical sales representative has earned a $1.7 million reward for blowing the whistle on Medicare fraud.  The reward will be paid out of an $11.4 million settlement by Victory Pharma Inc., a specialty pharmaceutical company, to resolve allegations that it paid kickbacks to doctors to induce them to write prescriptions for Victory’s products.

Chad Miller, the former sales representative, brought the lawsuit under the whistleblower or qui tam provisions of the False Claims Act.  He alleged that his former employer paid doctors kickbacks to induce them to write prescriptions for Naprelan, Xodol, Fexmid and Dolgic.

The kickbacks included tickets to sporting events, concerts and plays; spa, golf and ski outings; dinners at expensive restaurants; and numerous other out-of-office events.

Victory also promoted a program of paid “preceptorships,” which involved sales representatives “shadowing” doctors in their offices.  The settlement resolves allegations that Victory improperly used these preceptorships to induce doctors to prescribe Victory’s products.

The Anti-Kickback Statute makes it a crime for anyone to give, receive, solicit or help arrange anything of value to induce a doctor to prescribe products that will be paid for, in whole or in part, by Medicare, Medicaid or other government healthcare programs.  The underlying rational is that physicians should make treatment decisions based solely on their own independent medical judgment, without being influenced by kickbacks or other improper benefits.

A conviction for violating the anti-kickback law can result in jail time, monetary penalties, and exclusion from Medicare, Medicaid and other federal healthcare programs.

Violation of the anti-kickback statute can also result in violation of the False Claims Act.  Once a prescription is tainted by a kickback, any claim for reimbursement from Medicare or Medicaid is considered a “false claim” under the False Claims Act.

This pharmaceutical kickbacks case was settled when Victory agreed to pay $1.4 million to resolve federal Ant-Kickback Statute allegations and $9,938,310 to resolve False Claims Act allegations.

The whistleblower in this case will receive a reward of $1.7 million or approximately 17% of the False Claims Act portion of the settlement.

If you are aware of kickbacks or false claims being submitted to Medicare or Medicaid, then you should consult with an experienced False Claims Act attorney immediately.  You may be entitled to a very substantial reward.

To arrange a free and confidential consultation, call John Howley, Esq. at (917) 652-6504 or click here to reach our offices via email.

John Howley, Esq.

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