State to Receive $690,000 Under Settlement with New-Jersey-Based Drug Maker over Alleged Unlawful Incentives to Physicians

Under terms of the settlement, Daiichi Sankyo will pay the participating states and the federal government a total of $39 million in civil damages and penalties for alleged false claims to Medicaid and other federally-funded health care programs.

A worldwide company with its U.S. headquarters in Parsippany, Daiichi Sankyo was the subject of a false claims lawsuit filed by one of its former sales representatives in 2010. The whistleblower’s complaint alleged that health insurance claims related to drugs manufactured by Daiichi Sankyo were false because they resulted from kickbacks the company had provided to physicians who prescribed the drugs. That lawsuit spawned the multi-state investigation that led to the settlement announced today

The alleged kickbacks by Daiichi Sankyo took the form of honoraria payments, meals, and other remuneration to physicians who participated in, or claimed to have participated in, Physician Opinion & Discussion programs between January 1, 2005 and March 31, 2011. The alleged kickbacks also went to physicians who participated in other promotional speaker programs between January 1, 2004 and February 4, 2011.

“Improper incentives to health care professionals, and the alleged false insurance claims they help generate, cost us all,” said Acting Attorney General Hoffman.

“Working on our own, and in collaboration with our state and federal partners, we are committed to identifying Medicaid fraud and abuse, and to holding those who engage in such conduct accountable,” Hoffman said.

The Daiichi Sankyo settlement reimburses the federal government and the participating states for damages that were assessed in accordance with the amounts that Daiichi Sankyo expended on each speaker program for each fiscal year.

The overall Medicaid portion of the settlement, including all state and federal participants, is $10 million. About half of that overall amount goes to the participating states.

The $690,000 received by the State represents the entire recovery for New Jersey’s Medicaid program. Slightly more than half of that amount will go to the federal government for its portion of the Medicaid program, and to the former Daiichi Sankyo sales representative for having brought the original legal action.

Daiichi Sankyo also has agreed to enter into a Corporate Integrity Agreement with the federal Department of Health and Human Services, Office of Inspector General. The agreement obligates Daiichi Sankyo to undertake substantial internal compliance reforms for the next five years.

In addition to New Jersey, 48 states and the District of Columbia are participating in the Daiichi Sankyo settlement.


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