Forest Labs and Forest Pharma pays $38 million to end kickback Medicare fraud probe

Forest Laboratories LLC, located in New York, New York, and its subsidiary, Forest Pharmaceuticals Inc., are paying $38 million to settle a government probe  that they violated the False Claims Act by paying kickbacks to get physicians to prescribe the drugs Bystolic®, Savella®, and Namenda® said the Departmet of Justice,

The settlement resolves allegations that Forest violated the Anti-Kickback Statute, which prohibits the payment of  anything of value to induce referrals of items or services covered by federal health care programs, by providing payments and meals to certain physicians in connection with speaker programs about Bystolic®, Savella®, or Namenda® between Jan. 1, 2008 and Dec. 31, 2011.  The United States contends that the payments and meals were intended as improper inducements because Forest provided these benefits even when the programs were cancelled (and Forest provided no evidence of a bona fide reason for the cancellation), when no licensed health care professionals attended the programs, when the same attendees had attended multiple programs over a short period of time, or when the meals associated with the programs exceeded Forest’s internal cost limitations.

As a result of today’s $38 million settlement, the federal government will receive $35.5 million and state Medicaid programs will receive $2.5 million.  The Medicaid program is funded jointly by the state and federal governments.

The settlement resolves allegations filed in a lawsuit by former Forest employee Kurt Kroening, in federal court in Milwaukee, Wisconsin.  The lawsuit was filed under the qui tamor whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  Mr. Kroening will receive approximately $7.8 million.

The case is captioned United States ex rel. Kroening v. Forest Pharmaceuticals, Inc., et al., Case No. 12-CV-366.  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Jeffrey Newman represents whistleblowers but not those in this case.