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US: False Claims or Government Extortion Racket

May 1, 2010

Welcome to Government Crime, Inc.  Where the Government is behaving like the mob and taking private assets in the middle of broad daylight.

The FCA ia just becoming a Government Extortion Racket.  Where Government is Going After Private Companies for Legal Activities and pretending to the American People that the DOJ cares about fraud against the Taxpayer.

DOJ Racks Up Another $100 Million in Pharmaceutical Settlements

The U.S. Department of Justice announced two settlements with pharmaceutical companies yesterday for a total of more than $100 million in penalties under the False Claims Act and the Food, Drug and Cosmetic Act. The announcements came two days after the department reached a $520 million settlement with AstraZeneca for similar violations involving unapproved uses of drugs.

In one settlement, two Johnson & Johnson subsidiaries, Ortho-McNeil Pharmaceutical LLC and Ortho-McNeil-Janssen Pharmaceuticals Inc., will pay more than $81 million for the off-label promotion of the epilepsy drug Topamax, according to a DOJ statement.

The U.S. Food and Drug Administration approved the drug for the treatment of partial onset seizures. However, the manufacturers also allegedly promoted the drug for psychiatric uses.

Ortho-McNeil-Janssen Pharmaceutical’s promotion of the drug caused false claims to be submitted to government health care programs. The company will pay more than $75 million to settle civil allegations under the False Claims Act.

It will also enter into a corporate integrity agreement with the Department of Health and Human Services to ensure the alleged violations aren’t repeated.

Ortho-McNeil Pharmaceutical will pay more than $6 million in criminal fines for violating the Food, Drug and Cosmetic Act. The company allegedly marketed the sale of Topamax by hiring outside physicians to join sales representatives on sales calls and speak at events promoting the drug for off-label uses.

In the other settlement, Schwarz Pharma Inc., a subsidiary of Belgium-based UCB S.A., will pay $22 million for violations of the False Claims Act regarding the drugs Deponit and Hyoscyamine Sulfate Extended Release. The company allegedly failed to tell the Centers for Medicare and Medicaid Services that the two products, neither of which were approved by the FDA, did not qualify for coverage under federal health care programs.

Deponit is a skin patch used to prevent angina. Hyoscyamine Sulfate Extended Release treats various stomach, intestinal and urinary tract disorders. Neither product is now on the market, according to the DOJ statement.

Both cases began as whistleblower lawsuits filed under the False Claims Act.


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