INDIANAPOLIS – Through whistleblower lawsuits that exposed alleged Medicaid fraud, the pharmaceutical company that manufactures Botox will pay Indiana a civil settlement of nearly $636,000, Attorney General Greg Zoeller announced today. It’s part of a larger national settlement with federal and state governments where Allergan Inc. will pay a combined $600 million in civil and criminal penalties to resolve claims that it illegally marketed Botox for unapproved medical uses.
As part of his ongoing effort to raise awareness of whistleblowers’ rights under the False Claims Act, Zoeller noted the important role of company insiders in exposing Medicaid fraud through filing private lawsuits, which state and federal governments later can join after investigating the plaintiffs’ allegations.
“Whistleblowers who file suit to expose the illegal off-label marketing of pharmaceuticals are truly benefiting the taxpayers, because their actions help us to stop the overbilling of the Medicaid program and allow us to recover public dollars fraudulently paid out,†Zoeller said.
Allergan Inc. and Allergan USA Inc. have agreed to pay state governments and the federal government a combined $225 million civil settlement to compensate Medicaid, Medicare and other federal healthcare programs for reimbursements wrongly paid for Allergan’s drug Botox Therapeutic. In a related criminal settlement, Allergan also agreed Tuesday to plead guilty to a misdemeanor charge the U.S. Justice Department filed — for violating the Food, Drug and Cosmetic Act — and the company agreed to pay a $375 million criminal fine and forfeiture. Allergan signed a corporate integrity agreement requiring strict scrutiny of its future marketing and practices.
Under the Allergan civil settlement, Indiana will receive $635,807.25, with $317,903.63 of that for Medicaid restitution only and another $317,903.63 for additional recoveries. Counting both federal and state portions, the total settlement obtained for the Indiana Medicaid program will be $1,699,473.06, the settlement says.
Although best known for its cosmetic version used as a treatment for skin wrinkles, Botox was separately approved by the Food and Drug Administration for medical treatment of rare diseases and conditions, such as strabismus (crossed eyes), uncontrollable eye blinking, cervical dystonia (abnormal head and neck posture) and severe underarm sweating.
Filed in U.S. District Court for the Northern District of Georgia, three whistleblower lawsuits brought by five private plaintiffs – and later joined by the federal and state governments — alleged that from 2001 through 2008, Allergan illegally marketed Botox Therapeutic for uses not approved by the FDA and not eligible for reimbursement under Medicaid, Medicare or other programs.
Based in Irvine, Calif., Allergan was accused of off-label marketing that illegally promoted Botox Therapeutic for headache, pain, overactive bladder and spasticity – all unapproved uses. Allergan’s marketing allegedly targeted prescribing physicians with kickback schemes, honoraria and dinner workshops, and coached doctors to improperly code and bill Medicaid and other programs for off-label uses. The illegal marketing allegedly resulted in over-utilization of Botox Therapeutic for non-covered, medically unnecessary purposes — causing overbilling and fraudulent claims that Medicaid paid out, the lawsuits alleged.
Under the False Claims Act, a whistleblower who exposes Medicaid fraud is eligible to receive a percentage of recovered funds, through what is called qui tam (pronounced “key tamâ€) litigation. When a whistleblower files suit against a company alleging fraud on a government contract, the court seals the case until the federal and state governments investigate. Once the federal and state governments officially join the lawsuit as intervenors – as happened in the Allergan case — then the suit is unsealed and the original plaintiff shares in any out-of-court settlement or court-ordered damages that result from the case.
The five whistleblowers in the Allergan case from outside Indiana will receive a combined $37.8 million in the civil settlement under their 18 percent share of the recovery.
The lawsuit did not allege any fraud involving the separate use of Botox Cosmetic.
A branch of the Indiana Attorney General’s Office, the Indiana Medicaid Fraud Control Unit (MFCU) investigates false claims submitted to Medicaid for reimbursement and worked with its counterparts in other states during settlement negotiations.
In August, Zoeller kicked off a public awareness campaign to alert workers in the healthcare and pharmaceutical industries to their legal right under the False Claims Act to file whistleblower lawsuits if they learn of Medicaid fraud.
“My staff and I have made presentations to large groups of health care employees and nursing students to explain the potential financial reward available to plaintiffs under the False Claims Act,†Zoeller said. “This law may not be well known to the general public, but it is an important legal right that workers in the health field ought to be aware of.â€
Zoeller urges anyone interested in bringing a whistleblower action to learn more about the process by visiting his web site, www.in.gov/attorneygeneral/2807.htm
Anyone who is aware of fraudulent claims on Medicaid also can report them by contacting the Attorney General’s MFCU office at 1-800-382-1039.
