YEAR-END REPORT - 2019 Published 23-Dec-2019 HPTS Issue Brief 12-23-19.36 Health Policy Tracking Service - Issue Briefs Pharmaceuticals and Medical Devices Business Practices Authored by the David J. Steiner, J.D., a contributing writer and member of the Ohio bar. 12/23/2019 I. Introduction Johnson & Johnson and its Janssen Pharmaceutical Companies recently announced a settlement agreement with the Ohio counties of Cuyahoga and Summit that resolves all of the counties' claims with no admission of liability. As part of the agreement, the company will make a combined $10 million settlement payment to the counties. The Justice Department recently announced charges against Avanir Pharmaceuticals, a pharmaceutical manufacturer based in Aliso Viejo, California, for allegedly paying kickbacks to a physician to induce prescriptions of its drug Nuedexta. Oregon Attorney General Ellen Rosenblum recently released a statement explaining why she joined 24 other state attorneys general in rejecting an opioid settlement proposal from Purdue Pharma and members of the Sackler family, who run the company. Connecticut Attorney General William Tong and Consumer Protection Commissioner Michelle H. Seagull recently announced a multistate settlement, including 40 other states and the District of Columbia, requiring Johnson & Johnson and its subsidiary Ethicon, Inc. to pay nearly $116.9 million for their allegedly deceptive marketing of transvaginal surgical mesh devices. Pennsylvania Attorney General Josh Shapiro recently announced that Pennsylvania and other states have reached a $700 million settlement with pharmaceutical distributor Reckitt Benckiser Group, resolving allegations that the company improperly marketed Suboxone and defrauded state Medicaid systems. North Carolina Attorney General Josh Stein recently announced that he, along with the attorneys general of Tennessee, Pennsylvania, and Texas, have reached a $48 billion settlement framework with Cardinal Health, McKesson, AmersourceBergen, Johnson & Johnson, and Teva over their alleged roles in the opioid epidemic. The attorneys general are hopeful that other states will join this agreement in the near future. The settlement includes $22 billion in cash and $26 billion in medication assisted treatment drugs and their distribution over 10 years. Illinois Attorney General Kwame Raoul recently announced that the state has recovered $242 million in a settlement with several drug companies resolving allegations that the companies inflated the wholesale prices used in setting the rates for Medicaid reimbursements. The U.S. Department of Justice recently announced that the United States has filed a complaint alleging infringement by Gilead Sciences Inc. and Gilead Sciences Ireland UC (collectively, Gilead) of four U.S. patents awarded to and owned by the United States, Department of Health and Human Services. II. Legal Actions and settlements Actelion Pharmaceuticals settles False Claims Act allegations involving illegal use of charity San Francisco-based drug maker Actelion Pharmaceuticals US, Inc. recently agreed to pay $360 million to resolve claims that it illegally used a foundation as a conduit to pay the copays of thousands of Medicare patients taking Actelion's pulmonary arterial hypertension drugs. According to the Justice Department, these actions violated the federal False Claims Act. On June 16, 2017, after the conduct alleged in the recent settlement agreement occurred, Johnson & Johnson acquired Actelion. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -1- When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which can take the form of a copayment, coinsurance, or a deductible (collectively referred to as “copays”). These copays may be large for expensive medications. One of the reasons Congress included copay requirements in the Medicare program was for them to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. Under the Anti-Kickback Statute, a drug company cannot offer to pay or pay, directly or indirectly, any remuneration (including money or any other thing of value) to induce Medicare patients to purchase the company's drugs. This prohibition includes the payment of patients' copay obligations. Actelion sells several pulmonary arterial hypertension drugs, including Tracleer, Ventavis, Veletri, and Opsumit (the “Subject Dugs”). The government alleged that Actelion used a foundation, which claims 501(c)(3) status for tax purposes, as an illegal conduit to pay the copay obligations of thousands of Medicare patients taking the Subject Drugs and to induce those patients to purchase these drugs. The company allegedly engaged in this behavior because it knew that the prices Actelion set for the Subject Drugs could otherwise act as a barrier to those purchases. From 2014 to 2015, Actelion allegedly made donations to the foundation, which then used those donations to pay copays of patients prescribed the Subject Drugs. The government alleged that Actelion routinely obtained data from the foundation detailing how much the foundation had spent for patients on each Subject Drug. The company then allegedly used this information to decide how much to donate to the foundation and to confirm that its contributions were enough to cover the copays of only patients taking the Subject Drugs. The Government also claimed that Actelion engaged in this practice despite the fact that the foundation had warned the company against receiving such information. The Government also claims that Actelion had a policy of not permitting Medicare patients to participate in its free drug program, which was open to other financially needy patients, even if those Medicare patients could not afford their copays for the Subject Drugs. In an effort to generate revenue from Medicare and induce purchases of the Subject Drugs, the government alleged that Actelion referred such Medicare patients to the foundation, which allowed the patients copays to be paid and resulted in claims to Medicare for the remaining cost. The investigation was conducted by the Justice Department's Civil Division and the U.S. Attorney's Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation. According to Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division, “This settlement, like prior settlements concerning similar misconduct, makes clear that the government will hold accountable companies that pay illegal kickbacks. Pharmaceutical companies cannot increase drug prices while engaging in conduct designed to defeat mechanisms put in place to check such prices and then expect Medicare to pay for the ballooning costs.” United States Attorney Andrew E. Lelling for the District of Massachusetts also commented on the settlement, stating that, “Using data from CVC that it knew it should not have, Actelion effectively set up a proprietary fund to cover the co-pays of just its own drugs. Such conduct not only violates the anti-kickback statute, it also undermines the Medicare program's co-pay structure, which Congress created as a safeguard against inflated drug prices. During the period covered by today's settlement, Actelion raised the price of its main PAH drug, Tracleer, by nearly 30 times the rate of overall inflation in the United States.” Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, stated that, “Today's settlement against Actelion is a victory for the public and underscores the FBI's commitment to safeguarding the financial integrity of the Medicare program. Simply put, the goal of the FBI's Health Care Fraud program is to ensure that patients receive the appropriate treatments and therapies according to their medical needs, without corrupt or profit-driven influence of drug manufacturers.” Lastly, Phillip Coyne, Special Agent in Charge, Office of the Inspector General of the Department of Health and Human Service's Boston Regional Office, also commented on the settlement. Mr. Coyne noted that, “Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars. We will continue to hold pharmaceutical companies accountable for subverting the charitable donation process in order to circumvent safeguards designed to protect the integrity of the Medicare [FN1] program.” Dallas area pharmacy owners and marketers charged in $9 million kickback operation Eight Dallas-area pharmacy owners and marketers were charged in an indictment recently unsealed for their alleged roles in a scheme involving approximately $92 million in compound drug claims to TRICARE and the U.S. Department of Labor (DOL). These claims were allegedly the product of over $9.1 million in illegal kickbacks. According to the indictment, from May 2014 to September 2016, the defendants and their co-conspirators allegedly engaged in a [FN2] scheme to pay kickbacks and bribes for the referral of TRICARE and DOL beneficiaries to obtain expensive compound drugs. Manhattan U.S. Attorney announces two civil healthcare fraud settlements with Walgreens totaling $269.2 million © 2020 Thomson Reuters. No claim to original U.S. Government Works. -2- Geoffrey S. Berman, the United States Attorney for the Southern District of New York, recently announced that the United States filed and settled two healthcare fraud lawsuits against national pharmacy chain Walgreens Boots Alliance, Inc. (“Walgreens”). According to the settlement, Walgreens must pay the United States and state governments a total of $269.2 million. The first settlement, which was approved on January 16, 2019 by U.S. District Judge Paul A. Crotty, requires the company to pay $209.2 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them. The second settlement, approved on January 15, 2019, by U.S. District Judge J. Paul Oetken, requires Walgreens to pay $60 million to resolve allegations that the company overbilled Medicaid by failing to disclose to and charge Medicaid the lower drug prices that Walgreens offered the public through a discount program. In both settlements, Walgreens admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act. Manhattan U.S. Attorney Geoffrey S. Berman commented on the settlement, stating that, “Medicare and Medicaid provide essential healthcare coverage to millions of people across this country. The financial integrity of these programs depends on truthful and accurate billing by pharmacies like Walgreens. Overbilling and improper billing of Medicare and Medicaid unduly burden taxpayers and put the solvency of these vital healthcare programs at risk. This Office will hold healthcare providers to account when they fail to deal honestly with federal programs.” HHS-OIG Special Agent in Charge Scott J. Lampert also noted that, “Walgreens engaged in practices that undermined the integrity of the Medicare and Medicaid programs, compromised patient care, and wasted taxpayer dollars. Along with our law enforcement partners, HHS-OIG will continue to protect the individuals that depend on federally funded health care programs, and ensure that companies that do business with those programs do so in an honest fashion.” The first United States complaint alleges that Walgreens routinely submitted false days-of-supply data to federal healthcare programs when it sought federal reimbursement for insulin pens it dispensed to federal beneficiaries who did not need them. Specifically, according to the government, the company engaged in two practices that resulted in the fraudulent submissions. First, the company allegedly configured its electronic pharmacy management system to prevent its pharmacists from dispensing less than a full box of five insulin pens, even when patients did not need that much insulin. Second, when a full box of insulin pens exceeded the federal healthcare program's limit on the total days of supply (i.e., the total number of daily doses) that could be dispensed and reimbursed at that time, Walgreen's allegedly evaded this restriction by falsely stating in its reimbursement claims that the total days of supply did not go over the limit. As a result of these actions, federal healthcare programs paid the company millions of dollars for insulin that many beneficiaries did not actually need, and substantial quantities of valuable medication were wasted. This alleged conduct also potentially led to healthcare risks and abuse, such as the improper resale of insulin pens on the Internet. The settlement requires Walgreens to pay approximately $168 million to the United States, and the company has agreed separately to pay approximately $41.2 million to state governments. Under the settlement, Walgreen's admitted, among other items, that: (1) When a federal health program denied a claim from Walgreens because the reported days of supply for a full carton of five insulin pens exceeded the federal program's days-of-supply limit, it was the company's practice to dispense and bill for the full carton and reduce the reported days of supply to conform to the program's days-of- supply limit; and (2) Walgreens repeatedly reported days-of-supply data to federal health programs that were different from, and lower than, the days-of-supply calculated according to the standard pharmacy billing formula. The United States' other complaint in this case alleges that Walgreens operated a program called the Prescription Savings Club (the “PSC”), where customers received discounts when they ordered drugs from Walgreens. Medicaid regulations directed the company to seek Medicaid reimbursement only at the lowest of certain drug price points, including the “usual and customary price” (“U&C price”). Medicaid rules of many states defined the U&C price as the price offered through discount programs like the PSC. Walgreens, however, failed to disclose to Medicaid the discount drug prices it offered customers through the PSC when it sought reimbursement from Medicaid. As a result, Medicaid programs paid Walgreens more in reimbursements than they would have paid had the company disclosed the lower PSC prices. The settlement requires WALGREENS to pay a total of $60 million, of which approximately $32 million is to the United States and approximately $28 million will go to state governments. DCIS Special Agent-in-Charge Leigh-Alistair Barzey also commented on the settlements, noting that, “Health care fraud impacting the U.S. Department of Defense (DoD) is a top investigative priority for the DCIS. The settlements announced today by the U.S. Attorney's Office are the direct result of a joint investigative effort by the DCIS, the FBI, HHS OIG, DoL OIG, OPM OIG, Postal OIG, and the U.S. Department of Justice. The successful resolution of these cases demonstrates the DCIS's ongoing commitment to work with its law enforcement partners to combat health care fraud, protect Defense Health Agency funds, and ensure the integrity of TRICARE, the DoD's health care system.” DOL-OIG Special Agent-in-Charge Michael C. Mikulka noted that, “Walgreens defrauded the U.S. Department of Labor's (DOL) Federal Employees' Compensation Act Program and other health care programs out of millions of dollars by over-dispensing insulin pens at the © 2020 Thomson Reuters. No claim to original U.S. Government Works. -3- risk of potentially causing harm to beneficiaries. We will continue to work with our law enforcement partners to protect the integrity of [FN3] DOL's benefit programs.” Federal court enters permanent injunction against Pennsylvania compounding pharmacy and its owner to prevent adulteration of drugs The U.S. District Court for the Western District of Pennsylvania recently entered a consent decree of permanent injunction against defendants Ranier's Rx Laboratory Inc., doing business as Ranier's Compounding Laboratory, and its owner, Francis H. Ranier. The U.S. Department of Justice recently announced that the injunction permanently enjoins the defendants from doing any act that causes a drug to become adulterated based on insanitary conditions while such drug is held for sale after shipment of one or more of its components in interstate commerce. The entered permanent injunction relates to a complaint the U.S. Department of Justice filed in the U.S. District Court for the District of Western Pennsylvania on Feb. 1, 2019, at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that defendants violated the Federal Food, Drug, and Cosmetic Act by causing articles of drug to become adulterated. The complaint alleged that defendants' drugs were adulterated because they were prepared, packed, or held under insanitary conditions where they may have been contaminated with filth or may have been rendered injurious to health. According to Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division, “The Department of Justice aggressively pursues legal measures to help ensure that compounded drugs intended to be sterile are made under appropriate conditions and thereby to minimize risk to consumers. The Department of Justice will continue to work with the FDA to make sure that consumers can rely on the protections in the Federal Food, Drug, and Cosmetic Act.” Defendants agreed to settle the complaint and be bound by a consent decree for permanent injunction. As part of the settlement, defendants represented that they are not engaged in manufacturing, holding, and/or distributing any sterile drugs manufactured at their facility. As part of the permanent injunction, if defendants intend to resume manufacturing, holding, and/or distributing any sterile drugs manufactured at their facility, they must comply with specific remedial measures set forth in the injunction. The measures include, among other things, retaining an independent person to assist with remedial efforts, submitting a work plan to FDA, and providing a certification from the independent expert that defendants have undertaken corrective actions to ensure that defendants' facility, equipment, processes, and procedures are adequate to prevent defendants' drugs from becoming adulterated based on insanitary conditions. FDA conducted an inspection of defendants' facility in May 2018. According to the complaint, FDA observed numerous insanitary conditions, including insanitary employee practices, poor aseptic technique, failure to ensure adequate air quality in the cleanroom, and inadequate environmental and personnel monitoring. After the May 2018 inspection, defendants conducted a recall of all sterile drugs within expiry. FDA Commissioner Scott Gottlieb, M.D. also commented on the case, noting that, “We continue to see concerning activity when it comes to some compounded drugs, including problems related to the conditions under which compounded sterile medicines are made, which can raise significant risks to patients. This is an area of intense focus for the FDA. We're committed to making sure that compounded drugs are made under appropriate production standards and, when necessary, taking enforcement actions against compounders who fail to produce sterile drugs in compliance with the law. Despite our warning, Ranier's and its owner placed patients at risk by compounding purportedly sterile drug products under insanitary conditions. The FDA will continue to pursue enforcement [FN4] action against companies and owners who place American consumers at risk.” 46 state attorneys general settle unlawful promotion case with maker of hip implant devices Illinois Attorney General Kwame Raoul and 45 other attorneys general recently announced a $120 million settlement with Johnson & Johnson and Medical Device Business Inc., formerly known as DePuy Inc., to resolve allegations that DePuy unlawfully promoted its metal-on-metal hip implant devices, the ASR XL and the Pinnacle Ultamet. Raoul and the attorneys general claim that DePuy engaged in unfair and deceptive practices in its promotion of the ASR XL and Pinnacle Ultamet hip implant devices by making misleading claims as to the longevity (also known as survivorship) of metal-on-metal hip implants. DePuy allegedly advertised that the ASR XL hip implant had a survivorship of 99.2 percent at three years when the National Joint Registry of England and Wales reported a 7 percent revision rate at three years. DePuy also promoted the Pinnacle Ultamet as having a survivorship of 99.8 percent and 99.9 percent survivorship at five years when the National Joint Registry of England and Wales reported a 2.2 percent three-year revision rate in 2009 increasing to a 4.28 percent five-year revision rate in 2012. Raoul and the attorneys general alleged that some patients who required hip implant revision surgery to replace a failed ASR XL or Pinnacle Ultamet implant experienced persistent groin pain, allergic reactions, tissue necrosis, as well as a build-up of metal ions in the blood. The ASR XL was recalled from the market in 2010, and DePuy discontinued its sale of the Pinnacle Ultamet in 2013. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -4- Attorney General Raoul stated that, “Patients and doctors rely on accurate information about medical devices so they can make appropriate health care decisions. This settlement will require important reforms so that a patient's wellbeing is paramount.” Under the settlement, DePuy will reform how it markets and promotes its hip implants to: • Base claims of survivorship, stability or dislocations on scientific information and the most recent dataset available from a registry for any DePuy hip implant device. • Maintain a post market surveillance program and complaint handling program. • Update and maintain internal product complaint handling operating procedures including training of complaint reviewers. • Update and maintain processes and procedures to track and analyze product complaints that do not meet the definition of Medical Device Reportable Events. • Maintain a quality assurance program that includes an audit procedure for tracking complaints regarding DePuy Products that do not rise to the level of a Medical Device Reportable Event but that may indicate a device-related serious injury or malfunction. • Perform quarterly reviews of complaints and if a subgroup of patients is identified that has a higher incidence of adverse events than the full patient population, determine the cause and alter promotional practices as appropriate. Other states involved in the settlement include Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, [FN5] and Wisconsin. FTC enters into global settlement with Teva to resolve reverse-payment allegations The Federal Trade Commission (FTC) recently announced that it reached a global settlement resolving pending claims in three separate federal court antitrust lawsuits involving subsidiaries of pharmaceutical manufacturer Teva Pharmaceuticals Industries Ltd. If approved by the relevant courts, the stipulated order will prohibit Teva from engaging in reverse-payment patent settlement agreements that impede consumer access to lower-priced generic drugs. According to FTC Chairman Joe Simons “This settlement represents another milestone in the Commission's unwavering commitment to put an end to harmful reverse-payment agreements. This broad settlement prevents the world's largest manufacturer of generic drugs from entering into collusive agreements that prevent price competition by keeping generic drugs off the market.” Under the stipulated order for a permanent injunction, Teva will be prohibited from entering into a patent infringement settlement agreement that includes a reverse payment transferring value from the brand to the generic. Although the company is already bound by a prior order in the case of FTC v. Cephalon, the new order is more broad, prohibiting Teva from entering into the following common forms of reverse payments: (1) a side deal, in which the generic company receives compensation in the form of a business transaction entered at the same time as the patent litigation settlement; and (2) a no-AG commitment, in which a brand company agrees not to compete with an authorized generic version of a drug for a period of time. The Cephalon order did not prohibit no-AG commitments. According to the FTC, the new order, which would last for 10 years from the date of entry, provides immediate relief to consumers, without the costs and risks of trial and appeal in three pending cases. To effectuate the global settlement, the FTC authorized staff to file the necessary motions in three pending federal court cases. A federal judge needs to sign the orders for the settlements to be binding. FTC v. Actavis (No. 09-cv-955 N.D. Ga.): The Commission filed its complaint on January 27, 2009, alleging a reverse-payment agreement between Solvay (the brand, now AbbVie Products LLC) and Watson (the generic, now Actavis Holdco, a subsidiary of Teva) to delay the release of a generic version of AndroGel, a popular testosterone replacement drug. Following the district court's dismissal of the FTC's complaint, the Supreme Court, in June 2013 reversed that decision (570 U.S. 136), finding that reverse-payment agreements can violate the antitrust laws. The FTC's case was remanded, and trial is scheduled to begin on March 4, 2019. Under the global settlement, the Commission will ask the court to dismiss Teva from the proceedings. The Commission's charges against Solvay will proceed to trial as scheduled. FTC v. Allergan plc (No. 17-cv-321 N.D. Cal.): The Commission filed its complaint on January 23, 2017, alleging a reverse-payment agreement to block consumer's access to lower-cost versions of Lidoderm with compensation in the form of (1) a no-AG commitment between Endo Pharmaceuticals (the brand, partnered with Teikoku, the creator and manufacturer of Lidoderm) and the generics (Watson Laboratories, now part of Teva, and Watson Pharmaceuticals, now Allergan Finance, a subsidiary of Allergan plc) and (2) $96 million of branded Lidoderm product given to Watson at no cost. Lidoderm is a topical patch used to relieve pain associated with a complication of shingles known as post-herpetic neuralgia. Endo and Teikoku already settled the Commission's charges in stipulated orders that bar them from entering into similar agreements, including ones that contain a no-AG commitment, for 10 years. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -5- Under the global settlement, the Commission will ask the court to dismiss the remaining claims against Teva, Allergan plc, and Allergan Finance, LLC, which effectively will end this litigation if approved by the court. FTC v. AbbVie, Inc. (No. 14-cv-5151 E.D. Pa.): The Commission filed its complaint on September 8, 2014, alleging a reverse-payment agreement between AbbVie, Inc. (and its predecessor company, Abbott Laboratories, and subsidiary Unimed (the brand companies)) and Teva (the generic). The complaint also contains allegations that AbbVie and its partner Besins Healthcare Inc. filed baseless patent infringement lawsuits against potential generic competitors, including Teva, to delay the introduction of lower-priced versions of AndroGel. The court dismissed the FTC's reverse-payment claim in 2015. This ruling is on appeal to the Third Circuit Court of Appeals. Under the proposed global settlement, the Commission will resolve its claims against generic Teva. The FTC's appeal of the dismissal of the reverse-payment claim will continue against the brand companies, as will the appeal of the district court's ruling on the sham litigation claim. The Commission vote to accept the settlement and file the necessary papers in these cases was 4-0-1. Commissioner Christine S. [FN6] Wilson did not participate. Mississippi woman pleads guilty to Health Care Fraud for her role in $200 million compounding pharmacy scheme The U.S. Department of Justice recently announced that a Hattiesburg, Mississippi woman pleaded guilty for her role in a $200 million scheme to defraud health care benefit programs, including TRICARE, which is the program that covers U.S. military service members and their families. Hope E. Thomley, 52, pleaded guilty before U.S. District Judge Keith Starrett of the Southern District of Mississippi to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering and tax evasion. She is scheduled to be sentenced by Judge Starrett on July 2. According to Assistant Attorney General Benczkowsk, “Hope Thomley and her co-conspirators stole millions of dollars from a federal health care program that serves our nation's brave military personnel and their families. The Department of Justice and our law enforcement partners will continue to target unscrupulous medical professionals, business owners, and pharmacies that steal from our nation's vital health care programs.” At her plea hearing today, Ms. Thomley admitted her role in a scheme to defraud health care benefit programs (including TRICARE) by marketing compounded medications, which usually are medications that are specially combined or formulated to meet the individual needs of patients. Thomley owned and operated the exclusive marketing agency for Advantage Pharmacy of Hattiesburg, and was [FN7] responsible for obtaining prescriptions for which the pharmacy could obtain reimbursement from health care benefit programs. Federal government settles with drug maker who avoided paying new drug application fees United States Attorney William M. McSwain recently announced that Lehigh Valley Technologies, Inc. (“LVT”) agreed to a $4 million settlement to resolve allegations under the False Claims Act that it designed a scheme to avoid paying fees associated with new drug applications to the United States Food and Drug Administration (“FDA”). LVT is a pharmaceutical company located in Allentown, Pennsylvania that engaged in the development and commercialization of certain human drug products. A company seeking to market a new drug must submit and receive FDA approval of a new drug application (“NDA”) before it may be marketed or sold in the United States. The NDA application is how drug sponsors formally propose that the FDA approve a new drug for sale and marketing. In 1992, Congress created the Prescription Drug User Fee Act (“PDUFA”) that authorizes and requires the FDA to collect a “prescription drug user fee” or “application fee” from companies that submit an NDA. PDUFA gives the FDA a revenue source to fund the new drug approval process. Under 21 U.S.C. § 379h(d)(1)(C), the FDA will grant a waiver of the fee to a small business applicant submitting its first application. In making that determination, the FDA must consider “any affiliate of the applicant,” including large businesses or businesses that have already received the fee waiver. One reason for the fee waiver is to incentivize and level the playing field for small businesses that submit an NDA. Limiting the waiver to first-time applicants is intended to allow a new, small businesses to enter the industry without the significant costs to entry that the NDA fee would otherwise impose. In this case, LVT had previously received a fee waiver in 2010 for its Oxycodone Hydrochloride NDA. Because it received that fee waiver, LVT was ineligible to receive another fee waiver. LVT then intended to submit two NDAs relating to potassium chloride for oral solution. Had LVT submitted these NDAs in its own name, it would have had to pay the FDA over $2 million. Instead of paying this fee, LVT allegedly developed a scheme with two companies to avoid the fees. Under the terms of the agreements, LVT paid the companies to submit NDAs for potassium chloride for oral solution in their own name. LVT's payment to the companies was contingent upon the FDA granting waivers from the prescription drug user fee. LVT prepared and controlled all of the submissions that the companies made to the FDA relating to the NDA approval. None of the involved companies disclosed to the government the agreements, despite the government's request for such information. Being unaware of the agreements, the FDA granted fee waivers and approved both NDAs. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -6- According to U.S. Attorney William M. McSwain, “As alleged, the sole purpose of the arrangement was for those companies to serve as a front and allow LVT to avoid the FDA fees that the FDA otherwise would have required it to pay. The arrangement was illegal. Like we did today, we will hold companies accountable that scheme to avoid the fees that enable the FDA to carry out its vitally important drug approval process.” Mark S. McCormack, Special Agent in Charge, FDA Office of Criminal Investigations' Metro Washington Field Office, also commented on the decision, noting that, “The FDA laws and accompanying regulations for funding drug approvals are designed, in part, to encourage companies, even small businesses, to create new drugs. When companies attempt to game the system to avoid paying these critical fees, we will bring them to justice.” [FN8] This case was investigated by FDA's Office of Criminal Investigations. Florida compounding pharmacy and its owners settle False Claims Act allegations The Department of Justice recently announced that Sarasota, Florida-based Vital Life Institute LLC (formerly known as AgeVital Pharmacy LLC) and its owners Jenny and William Wilkins have agreed to pay at least $775,000 to resolve claims that they violated the False Claims Act by engaging in an illegal kickback scheme to induce the referral of compounded drug prescriptions for TRICARE and Medicare beneficiaries. AgeVital and the Wilkinses have also agreed to pay additional amounts in the event certain events occur. The settlement resolves allegations that AgeVital paid kickbacks to a third-party marketing company to solicit prospective patients for compounded drug prescriptions, regardless of patient need. The marketing company arranged for prescribers to sign those prescriptions, which were then referred to AgeVital to be filled. The kickbacks to the marketing firm allegedly consisted of a substantial share of the pharmacy's TRICARE and Medicare reimbursements. The federal Anti-Kickback law, prohibits, among other things, the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal health care program. Claims submitted to federal health care programs in violation of the Anti-Kickback Statute can lead to liability under the False Claims Act. According to Assistant Attorney General Jody Hunt for the Department of Justice's Civil Division, “The Department will continue to hold accountable providers that pay illegal kickbacks to induce patient referrals. Kickback schemes undermine public trust in our health care system and lead to unnecessary health care costs at taxpayers' expense.” U.S. Attorney for the Middle District of Florida Maria Chapa Lopez also commented on the settlement, stating that, “We will not tolerate those who profit at the expense of taxpayers by entering into illegal kickback arrangements. Our office is committed to holding individuals accountable for corporate malfeasance.” The settlement resolves a lawsuit filed in federal court in Tampa, Florida, by Manfred Knopf, who allegedly received unwanted compounded medications from AgeVital that were billed to Medicare. That lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which allows private parties to bring a lawsuit on behalf of the United States for false claims and to [FN9] share in any recovery. Mr. Knopf will receive at least $139,500 of the settlement. Oklahoma Attorney General announces $270 million settlement with Purdue relating to opioid sales in state; $200 million will go to OSU Center for Wellness and Recovery Oklahoma Attorney General Mike Hunter and Oklahoma State University leaders recently announced a settlement with Purdue Pharma that will establish a nearly $200 million endowment at the Oklahoma State University's Center for Wellness and Recovery. This money will be used to treat the ongoing addiction epidemic nationwide. The trial against Johnson & Johnson, Teva, and the other defendants named in the state's lawsuit remains scheduled for May 28, 2019. The endowment will provide funding for an entity that will receive the initial $102.5 million, which will go to the Oklahoma State University Center for Health Sciences Center for Wellness and Recovery. The Center is a treatment and research center focused on treating pain and addiction. Starting January 1, 2020, the entity will receive an annual $15 million payment over a five- year period. During the same five-year timeframe, it will also receive ongoing contributions of addiction treatment medicine, which are valued at $20 million. According to Attorney General Hunter, “The addiction crisis facing our state and nation is a clear and present danger. Last year alone, out of the more than 3,000 Oklahomans admitted to the hospital for a non-fatal overdose, 80 percent involved a prescription opioid medication. Additionally, nearly 50 percent of Oklahomans who died from a drug overdose in 2018 were attributed to a pharmaceutical drug. Deploying the money from this settlement immediately allows us to decisively treat addiction illness and save lives.” Hunter further noted that, “OSU's Center for Wellness and Recovery is already a national leader in studying and treating addiction as a brain disease and finding innovative ways to cure it. This endowment will allow the university to expand its footprint to a national level to combat the crisis. I have full faith and confidence in Dr. Kayse Shrum and her team to lead this initiative.” Other details of the settlement include the following terms: © 2020 Thomson Reuters. No claim to original U.S. Government Works. -7- • $12.5 million will go towards providing funds to directly abate and address the opioid epidemic's effects in Oklahoma's cities and counties; • Purdue will make a $60 million payment to offset all current litigation costs; and • Purdue will not promote opioids in Oklahoma, including employing or contracting with sales representatives to health care providers in Oklahoma. Commenting on the settlement, Hunter stated that, “We appreciate that Purdue Pharma and its owners chose to work constructively with us to resolve this litigation in a way that will bring to life a new and unique national center with the goal of creating breakthrough innovations in the prevention and treatment of addiction.” Oklahoma State University President Burns Hargis spoke at the news conference announcing the settlement and congratulated Attorney General Hunter. Mr. Hargis stated that, “We extend our congratulations to Oklahoma Attorney General Mike Hunter and the legal team for their foresight to skillfully craft a settlement that will position Oklahoma State University's Center for Wellness and Recovery to serve as the premiere institution for research, education and treatment for addiction in the United States. Our world-class team will use these funds to champion groundbreaking research, which will result in discoveries for the prevention and treatment of opioid addiction, one day leading to the end of the nation's ongoing public health crisis.” Attorney General Hunter also noted that the state will vigorously prepare for trial against the remaining defendants, noting that, “This agreement is only the first step in our ultimate goal of ending this nightmarish epidemic. In the coming weeks, the team and I will continue preparing for the trial 24/7, where we intend to hold the other defendants in this case accountable for their role in creating the [FN10] worst public health crisis our state and nation has ever seen.” Bayer and Janssen Pharmaceuticals settle 25,000 blood thinner Xarelto claims for combined $775 million Drug maker Bayer recently announced that the company, along with Janssen Pharmaceuticals, has agreed to settle approximately 25,000 claims relating to safety and lack of warning allegations surrounding the blood thinner Xarelto. The settlement amount is $775 million. Prior to the settlement, Bayer and Janssen Pharmaceuticals prevailed in six separate similar cases that went to trial. The settlement burden will be shared equally between the two companies, and at least Bayer's share of the contribution is expected to be partially offset by product liability insurance. The settlement will resolve virtually all of the pending Xarelto claims in the U.S., and the companies have reserved the right to withdraw from the settlement if certain participation rates of those eligible to participate are not met. According to a press release from Bayer, “Bayer continues to believe these claims are without merit and there is no admission of liability under the agreement. However, this favorable settlement allows the company to avoid the distraction and significant cost of continued litigation.” Bayer also claims that, “The safety profile of Xarelto™ remains positive and unchanged as confirmed time and again by regulatory agencies worldwide. We remain committed to the more than 45 million patients who have been prescribed Xarelto™ worldwide and [FN11] focused on developing new therapies that improve the lives and well-being of patients.” Grand jury indicts Indivior for several alleged unlawful practices relating to Suboxone Film The Department of Justice recently announced that a federal grand jury sitting in Abingdon, Virginia has indicted Indivior Inc. (formerly known as Reckitt Benckiser Pharmaceuticals Inc.) and Indivior PLC (Indivior) for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone Film. Suboxone Film is an opioid drug used in the treatment of opioid addiction. According to the indictment, Indivior obtained billions of dollars in revenue from Suboxone Film prescriptions by deceiving health care providers and health care benefit programs into believing that Suboxone Film was safer, less divertible, and less abusable than other opioid-addiction treatment drugs. Indivior also allegedly sought to boost profits by using a “Here to Help” program to connect opioid-addicted patients to doctors the company knew were prescribing opioids at high rates and in a clinically unwarranted manner. According to Principal Deputy Associate Attorney General Jesse Panuccio of the Department of Justice, “The deadly opioid epidemic continues to devastate communities and families across our nation. The Department of Justice intends to hold accountable those who are in position to know the harm opioid abuse inflicts, but instead choose to profit illegally from the pain of others. Manufacturers, distributors, pharmacies, and doctors should all be on notice that they must follow the law and act responsibly.” Assistant Attorney General Jody Hunt also commented on the indictment, noting that, “Opioid addiction is a national epidemic. The indictment alleges that, rather than marketing its opioid-addiction drug responsibly, Indivior promoted it with a disregard for the truth about its safety and despite known risks of diversion and abuse. The Department of Justice is committed to holding opioid manufacturers accountable for such unlawful conduct.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -8- The indictment alleged that Indivior developed Suboxone Film in or around 2007 as a patent-protected alternative to the tablet form of Suboxone, which was soon to face generic drug competition. The primary ingredient in both Suboxone Film and tablets is buprenorphine, which is a highly potent opioid. Indivior allegedly promoted Suboxone Film as safer and less-divertible than its tablet form, even though the company lacked any scientific evidence to support those claims. For example, Indivior aggressively marketed Suboxone Film, without an established basis, as having a “lower risk of child exposure” and a “less divertible/abusable formulation.” Indivior allegedly made these and other false and misleading claims in marketing materials and through representations to physicians, pharmacists, and health care benefit programs throughout the United States. The indictment also alleges that Indivior announced a “discontinuance” of its tablet form of Suboxone based on supposed “concerns regarding pediatric exposure to” tablets,” when the real reason for the discontinuance was to delay the Food and Drug Administration's approval of generic tablet forms of the drug. The indictment also alleges that Indivior used its “Here to Help” internet and telephone program as part of its scheme to induce physicians to write prescriptions for Suboxone Film. The company promoted the program as a resource for opioid-addicted patients. However, it instead used the program in part to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in suspicious circumstances. The indictment alleges that Indivior executives and employees knew from statistical and numerous reports that some doctors in the “Here to Help” referral system were issuing prescriptions in a careless and clinically unwarranted manner. The indictment claims that Indivior's scheme was “highly successful” and converted thousands of opioid-addicted patients over to Suboxone Film, causing state Medicaid programs to expand and maintain coverage of Suboxone Film at substantial cost to the government. Until early 2019, when Suboxone Film became subject to generic competition, Indivior retained a high portion of the opioid-addiction treatment market. The indictment charges Indivior with conspiracy to commit wire fraud, mail fraud, and health care fraud. The indictment also charges the company with one count of health care fraud, four counts of mail fraud, and twenty-two counts of wire fraud. The United States Attorney's Office for the Western District of Virginia and the Department of Justice's Consumer Protection Branch are prosecuting the case. The case was investigated by the Food and Drug Administration's Office of Criminal Investigations, the Virginia Attorney General's Medicaid Fraud Control Unit, Department of Health and Human Services' Office of the Inspector General, and United States Postal Service Office of Inspector General. The prosecution is part of a coordinated effort by the Department's Prescription Interdiction & Litigation (PIL) Task Force First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia commented on the indictment, noting that, “As this case makes clear, our office will aggressively prosecute health care fraud cases and particularly those that target people struggling with opioid addiction. We are grateful for the tireless investigative work of our partners at FDA, Virginia Medicaid Fraud Control Unit, HHS, and the U.S. Postal Service for taking on these types of important investigations.” “Our indictment alleges a wide-ranging and truly shameful scheme to put profits over the health and well-being of patients trying to manage substance use disorder and opioid dependence,” said Attorney General Mark R. Herring. “It's incredibly frustrating that while we have been working to remove the stigma around medication-assisted treatment and make it more widely available, Indivior was allegedly conspiring to exploit patients, taxpayers, and the expansion of MAT. My team and I are proud to have helped lead this investigation, and look forward to helping bring it to a just and fair conclusion.” Melinda K. Plaisier, FDA Associate Commissioner for Regulatory Affairs, also commented on the charges, stating that, “Opioid addiction is a public health emergency and medication-assisted opioid treatment options are an important tool for combatting this crisis. This investigation revealed that Indivior tried to mislead FDA and game the system by attempting to bar competition for Suboxone from the market. We will continue to pursue and bring to justice those who participate in these schemes to the detriment of public health.” [FN12] Manhattan U.S. Attorney and DEA announce charges against Rochester Drug Co-Operative and two executives Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Ray Donovan, the Special Agent in Charge of the New York Division of the U.S. Drug Enforcement Administration (“DEA”), recently announced criminal charges against Rochester Drug Co-Operative, Inc. (“RDC”), Laurence F. Doud III, the company's former chief executive officer, and William Pietruszewski, the company's former chief compliance officer, for unlawfully distributing oxycodone and fentanyl, and conspiring to defraud the DEA. Mr. Berman's Office also filed a lawsuit against RDC for its knowing failure to comply with its legal obligation to report thousands of suspicious orders of controlled substances to the DEA. Mr. Berman also announced an agreement (the “Agreement”) and consent decree under which RDC agreed to accept responsibility for its conduct by making admissions and stipulating to the accuracy of an extensive Statement of Facts, pay a $20 million penalty, reform and enhance its Controlled Substances Act compliance program, and submit to supervision by an independent monitor. Assuming RDC's continued compliance with the Agreement, the Government has agreed to defer prosecution for a period of five years, after which time the Government will seek to dismiss the charges. The consent decree is subject to final approval by the court. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -9- RDC is a wholesale distributor of pharmaceutical products, including controlled substances, headquartered in Rochester, New York. It is one of the nation's 10 largest distributors of pharmaceutical products, and the fourth largest in the New York area. It boasts over 1,300 pharmacy customers and over $1 billion in revenue per year. RDC has been charged in an Information with conspiracy to violate the narcotics laws, conspiracy to defraud the United States, and willfully failing to file suspicious order reports. RDC has also been sued in a civil complaint for its failure to file suspicious order reports. According to U.S. Attorney Geoffrey S. Berman, “This prosecution is the first of its kind: executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking, trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country. Our Office will do everything in its power to combat this epidemic, from street-level dealers to the executives who illegally distribute drugs from their boardrooms.” DEA Special Agent in Charge Ray Donovan commented on the case, noting that, “Today's charges should send shock waves throughout the pharmaceutical industry reminding them of their role as gatekeepers of prescription medication. The distribution of life- saving medication is paramount to public health; similarly, so is identifying rogue members of the pharmaceutical and medical fields whose diversion contributes to the record-breaking drug overdoses in America. DEA investigates DEA Registrants who divert controlled pharmaceutical medication into the wrong hands for the wrong reason. This historic investigation unveiled a criminal element of denial in RDC's compliance practices, and holds them accountable for their egregious non-compliance according to the law.” According to the documents filed in Manhattan federal court, from 2012 through March 2017, RDC knowingly and intentionally violated the federal narcotics laws by distributing dangerous, highly addictive opioids to pharmacy customers that it knew were being sold and used illicitly. The government contends that, at the direction of its senior management, including Doud and Pietruszewski, RDC supplied large quantities of oxycodone, fentanyl, and other dangerous opioids to pharmacy customers that its own compliance personnel determined were dispensing those drugs to individuals who had no legitimate medical need for them. RDC allegedly distributed controlled substances to those pharmacies even after identifying “red flags” of diversion, including dispensing highly abused controlled substances in large quantities; dispensing primarily controlled substances; dispensing quantities of controlled substances in amounts consistently higher than accepted medical standards; accepting a high percentage of cash for controlled substance prescriptions; dispensing to out-of-state patients; and filling controlled substances prescriptions issued by practitioners acting outside the scope of their medical practice, under investigation by law enforcement, or on RDC's “watch list.” Furthermore, allegedly at Doud's direction, RDC frequently brought on pharmacy customers that had been terminated by other distributors. Throughout the period in question, RDC, allegedly at the direction of Doud, increased its sales of oxycodone and fentanyl exponentially. From 2012 to 2016, RDC's sales of oxycodone tablets grew from 4.7 million to 42.2 million, which represents an increase of approximately 800 percent. During this same period, RDC's fentanyl sales grew from approximately 63,000 dosages in 2012 to over 1.3 million in 2016, which represents an increase of approximately 2,000 percent. During that same time period, Doud's compensation increased by over 125 percent, reaching over $1.5 million in 2016. The government also contends that, from 2012 through March 2017, RDC took steps to conceal its illicit distribution of controlled substances from the DEA and other law enforcement authorities. Among other actions, the government claims that RDC made the deliberate decision not to investigate, monitor, or report to the DEA pharmacy customers that it knew were diverting controlled substances for illegitimate use. Because the company knew that reporting these pharmacies would likely result in the DEA investigating and shutting down its customers, RDC's senior management, including Doud, directed the company's compliance department (and in particular Pietruszewski) not to report them. Instead, senior management directed the company to continue supplying those customers with dangerous controlled substances that the company knew were being dispensed and used for illicit purposes. Additionally, RDC allegedly knowingly and willfully avoided filing suspicious order reports with the DEA as required by law. Between 2012 through 2016, the company identified approximately 8,300 potentially suspicious “orders of interest,” including thousands of oxycodone orders, but the company reported only four suspicious orders to the DEA. The government alleges that RDC did not report suspicious orders in order to protect the profit being generated by customers dispensing large quantities of controlled substances. As a result of these actions, the DEA's ability to identify and prevent the illicit dispensing of highly addictive controlled substances by several [FN13] of RDC's pharmacy customers was impeded. Wisconsin and four other states file suit against Purdue Pharma and Richard Sackler for unlawful opioid marketing tactics Wisconsin Attorney General Josh Kaul recently announced the filing of a lawsuit against Purdue Pharma L.P., Purdue Pharma Inc., and Richard S. Sackler, Purdue's former co-chairman and president. The lawsuit alleges misconduct in marketing and sales of opioids that contributed to the opioid epidemic. Five states in total filed separate similar lawsuits against the defendants: Iowa, Kansas, Maryland, West Virginia and Wisconsin. According to Wisconsin Attorney General Kaul, “The opioid epidemic has shattered lives and strained communities across the state and the country. Today, we filed suit against Purdue Pharma L.P., Purdue Pharma Inc., and Richard Sackler, alleging that they misled the © 2020 Thomson Reuters. No claim to original U.S. Government Works. -10- public and medical professionals about both the benefits of and the dangers posed by OxyContin and other opioids, and that the opioid epidemic is partly attributable to their conduct.” Wisconsin's lawsuit, filed in Dane County Circuit Court, seeks a permanent injunction, abatement of the public nuisance, and civil penalties. It alleges that Purdue Pharma L.P., Purdue Pharma Inc., and Richard S. Sackler, repeatedly made false and deceptive claims regarding opioids, including OxyContin. The complaint specifically alleges that Purdue Pharma's deceptive and false marketing created a shift in the understanding of the effectiveness and danger of opioids. The complaint alleges that, “[i]n order to combat the concerns about opioids being abused, Purdue deployed an aggressive marketing campaign that sought to increase sales of OxyContin, while changing the accepted norms about opioid prescribing.” The complaint also states that, “[i]n 2007, Purdue Frederick (and individual executives) pled guilty to a federal felony based on its marketing practices…. Purdue Frederick specifically admitted that its supervisors and employees, ‘with the intent to defraud or mislead, marketed and promoted OxyContin as less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal than other medications.”’ The state of Wisconsin also claims that, after the 2007 settlement, Purdue continued to engage in false, deceptive, and misleading marketing practices. The company relied on Key Opinion Leaders, Front Groups, sales representatives, and “patient advocacy” websites to downplay the risks associated with OxyContin and other opioids. These associated risks, as alleged in the complaint, include the risk of addiction, the ease of preventing addiction, the benefits of Purdue's opioids relative to other opioids or pain relievers, the efficacy of opioids, the ability to control the effects of withdrawal, and the risk to senior citizens. The complaint alleges that Purdue and Richard S. Sackler were completely aware of the potential profits of OxyContin. For example, at the OxyContin launch party, Richard S. Sackler allegedly said that, “the launch of OxyContin Tablets will be followed by a blizzard of prescriptions that will bury the competition. The prescription blizzard will be so deep, dense, and white…” The complaint states that the consequences of the opioid epidemic for the state of Wisconsin include: • “In 2017, more people died in Wisconsin from an opioid overdose than from motor vehicle accidents, suicide, or firearms.” • In 2017 alone, “Wisconsin lost 916 of its citizens to the opioid epidemic.” • “The rate of babies born addicted to opioids and other addictive drugs in Wisconsin has quadrupled between 2006 and 2015…” • “Between 1999 and 2015, the volume of prescription opioids per capita in Wisconsin rose 425 percent…” • “…between 1999 and 2015, Wisconsin has lost 45,200 workers due to opioids,” and “cost the State approximately $37 billion in real economic output.” McKesson settles with West Virginia for $37 million over claims relating to distribution of controlled substances to dispensers in the state West Virginia Governor Jim Justice and the state's Attorney General's Office recently announced a $37 million settlement with McKesson Corporation, which, according to the state's Attorney General, is the largest state settlement of its kind in the nation against any single pharmaceutical distributor. The settlement resolves allegations by the state related to the distribution of controlled substances to dispensers in the state that were licensed by West Virginia and the U.S. Drug Enforcement Administration. The settlement does not resolve any allegations brought by counties, municipalities, or other political subdivisions within the state. Attorney General Patrick Morrisey brought the lawsuit, along with the state departments of Health and Human Resources, Military Affairs, and Public Safety. The plaintiffs intend to use their portions of settlement funds to assist in their fight against drug abuse in West Virginia. McKesson denies the allegations of plaintiffs' complaint and any wrongdoing. The settlements received approval from the Attorney General's Office, Governor Justice, and secretaries of the Department of Health and Human Resources, Department of Military Affairs, and Public Safety. Previous similar settlements in West Virginia include cases against Cardinal Health ($20 million), AmerisourceBergen ($16 million), H.D. Smith ($3.5 million), Miami-Luken ($2.5 million), Anda Inc. ($1,865,250), The Harvard Drug Group ($1 million), Associated Pharmacies ($850,000), J.M. Smith Corporation ($400,000), KeySource Medical Inc. ($250,000), Quest Pharmaceuticals ($250,000), Top Rx ($200,000), and Masters Pharmaceutical LLC ($200,000). The terms of the settlement require McKesson to pay $14.5 million within three business days of the case's dismissal, along with five additional payments of $4.5 million each year through May 6, 2024. Federal court issues permanent injunction against drug compounding facility A federal court recently entered a consent decree of permanent injunction against defendants accused by the U.S. Food and Drug Administration (FDA) of allegedly failing to adequately address unsanitary conditions at their drug-compounding facility. Defendants in the matter include Pharm D Solutions LLC (Pharm D), Luis R. De Leon, co-owner and Pharmacist-in-Charge, and Juan C. De Leon, co- © 2020 Thomson Reuters. No claim to original U.S. Government Works. -11- owner and pharmacist. The injunction permanently enjoins the defendants from distributing adulterated, misbranded, and unapproved new drugs in violation of the federal Food, Drug, and Cosmetic Act (FDCA). The Department of Justice filed a complaint in the U.S. District Court for the Southern District of Texas on May 20, 2019, at the request of the U.S. Food and Drug Administration (FDA). As part of the ordered permanent injunction, defendants cannot resume manufacturing, processing, or distributing sterile drugs until the FDA determines that they have complied with specific remedial measures. Those measures seek to ensure that defendants manufacture and distribute drugs in conformity with applicable manufacturing standards. According to Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division, “Compounding pharmacies must produce drugs that are reliably safe and sterile. The Department of Justice will continue to work closely with FDA to enforce the provisions of the Food, Drug, and Cosmetic Act.” The complaint alleged that the defendants' drugs were adulterated because they were prepared, packed, or held under insanitary conditions whereby they may have been contaminated or may have been rendered injurious to health. For example, the complaint alleged that, during a 2018 FDA Inspection, defendants' employees failed to demonstrate proper aseptic technique by, among other things, leaning into sterile areas with exposed skin and failing to maintain clean air supply when handling products intended to be sterile. The complaint also alleged that defendants failed to appropriately investigate instances of microbial contamination, mold, and yeast recovered from sterile processing areas. Pharm D initiated a voluntary recall of all compounded drug products intended to be sterile after the September 2018 FDA Inspection raised concerns about practices at the pharmacy. Pharm D also temporarily ceased sterile production at that time. U.S. Attorney Ryan K. Patrick for the Southern District of Texas commented on the case, stating that, “The Food, Drug, and Cosmetic Act is designed to protect the public health. Our district is a committed partner in enforcing the provisions of the Act in the interest of public safety.” Acting FDA Commissioner Ned Sharpless, M.D. also commented on the matter, noting that, “We understand that compounded drugs can be important for patients whose medical needs cannot be met by FDA-approved drug products, and we're continuing efforts to advance policies to help further improve the quality of compounded products.” Dr. Sharpless further stated that, “These drugs are not approved by the FDA and have not been evaluated for safety or efficacy, so when they're not appropriately compounded, they have the potential to cause patients harm. We'll continue taking enforcement actions, [FN14] like the one we're taking today, to ensure that these companies and products do not put patient health at risk.” Drug distributor Morris & Dickson Company agrees to settle Controlled Substances Act claims for $22 million Drug Enforcement Administration (DEA) Special Agent in Charge Brad L. Byerley and United States Attorney David C. Joseph recently announced that Morris & Dickson Company LLC has agreed to pay the United States $22 million in civil penalties to resolve claims that it violated the Controlled Substances Act by failing to report suspicious orders of hydrocodone and oxycodone. In addition to paying $22 million in settlement funds, Morris & Dickson has also agreed to make significant upgrades to its compliance program by investing millions of dollars to hire additional staff and implement new protocols and standards to ensure compliance with federal regulations requiring them to report suspicious orders of controlled substances. Morris & Dickson is the largest privately-owned wholesale pharmaceutical distributor in the United States and the fourth largest wholesale distributor in the country. It has total revenues of over $4 billion in its fiscal year ending January 31, 2018. Since January 2014, Morris & Dickson distributed controlled substances to approximately 800 retail pharmacies across 17 states, distributing over 600,000,000 dosage units. Based in Shreveport, Louisiana, Morris & Dickson services hospitals, alternative and other health care providers, and retail pharmacies. This settlement stems from a DEA Office of Diversion Control investigation into Morris & Dickson's failure to report suspicious orders of hydrocodone and oxycodone. Since January 2014, DEA Diversion agents have identified more than 12,000 allegedly suspicious retail pharmacy orders that should have been reported. Under the Controlled Substances Act and its implementing regulations, distributors are required to report suspicious orders to the DEA. Reporting suspicious orders and maintaining effective controls against diversion of controlled substances are critical components of the government's effort to stop the illegal distribution and sale of opioids. According to Special Agent in Charge Byerley, “The failure to report suspicious orders as required by federal regulations contributes to the opioid epidemic, which has caused devastating harm to individuals and our communities. The settlement with Morris & Dickson demonstrates the resolve by DEA to use all available tools to address this crisis at every level and reduce the availability of highly addictive, dangerous drugs.” U.S. Attorney Joseph also commented on the settlement, stating that, “The fight against opioid abuse is among our nation's most pressing law enforcement and public health initiatives. Opioids are now the leading cause of accidental death in the United States – killing approximately 130 Americans every day. About 40 percent of these deaths involve prescription drug abuse. This settlement demonstrates the Justice Department's continued commitment to use all of the tools at its disposal to stem the opioid epidemic. Louisiana citizens should know that my office and our local DEA agents will continue to investigate and aggressively prosecute any © 2020 Thomson Reuters. No claim to original U.S. Government Works. -12- manufacturer, distributor, pharmacy or doctor who, whether negligently or intentionally, fail in their duty to appropriately control the [FN15] distribution and use of these deadly drugs.” Government announces criminal charges, deferred prosecution agreement, and $7.1 million civil settlement with Heritage Pharmaceuticals over alleged antitrust conspiracy The Department of Justice recently announced criminal charges and a deferred prosecution agreement against generic drug maker Heritage Pharmaceuticals Inc. Heritage, headquartered in Eatontown, New Jersey, was charged for allegedly conspiring with its competitors to fix prices, rig bids, and allocate customers. According to a one-count felony charge filed in the United States District Court for the Eastern District of Pennsylvania in Philadelphia, from about April 2014 until at least December 2015, Heritage participated in a criminal antitrust conspiracy with other companies and individuals engaged in the production and sale of generic pharmaceuticals. The purpose of the conspiracy was to fix prices, rig bids, and allocate customers for glyburide, a medicine used to treat diabetes. This charge is the third in the Department of Justice's Antitrust Division's ongoing investigation of the company. Its former CEO and former president were previously charged. The Antitrust Division also announced a deferred prosecution agreement resolving the charge. Under the agreement, Heritage admits that it conspired to fix prices, rig bids, and allocate customers for glyburide. The company will also pay a $225,000 criminal penalty and cooperate fully with the ongoing criminal investigation. The United States will defer prosecuting Heritage for a period of three years to allow the company to comply with the agreement's terms. The agreement will not be final until it is formally approved by the federal court. According to Assistant Attorney General Makan Delrahim of the Department of Justice's Antitrust Division, “American consumers have the right to generic drugs sold at prices set by competition, not collusion. It is particularly galling that, when healthcare prices in the United States are already high, certain generic pharmaceutical companies and executives engaged in collusive conduct at the expense of individuals who depend on critical medications. Heritage and its co-conspirators cheated and exploited vulnerable American patients to pad their bottom line.” Mr. Delrahim further noted that, “This resolution — requiring an admission of guilt, a criminal penalty, and cooperation in the ongoing investigation — sends a clear message to generic pharmaceutical companies and their executives that this conduct will not be tolerated. The Division and its law enforcement partners, including the FBI and the U.S. Postal Service Office of Inspector General, will continue to hold companies and individuals accountable for collusion that undermines the integrity of the market for drugs.” The deferred prosecution agreement identifies the company's substantial and ongoing cooperation with the investigation to date, including its disclosure of information regarding criminal antitrust violations involving drugs other than those identified in the criminal charge and the agreement. According to the agreement, this cooperation has allowed the United States to advance its investigation into criminal antitrust conspiracies among other manufacturers of generic pharmaceuticals. Other facts and circumstances identified in the agreement include: • Heritage has agreed to resolve all civil claims relating to federal health care programs arising from its conduct; • A conviction (including a guilty plea) would likely result in the Office of the Inspector General of the Department of Health and Human Services imposing mandatory exclusion of Heritage from all federal health care programs under 42 U.S.C. § 1320a-7 for a period of at least five years; and • An exclusion of Heritage from federal health care programs would result in substantial consequences, including to American consumers. The Department of Justice maintains that the agreement can ensure the restoration of integrity to Heritage's operations and preserve its financial viability while also preserving the United States' ability to prosecute it should material breaches occur. Scott Pierce, Special Agent in Charge, U.S. Postal Service Office of Inspector General, stated that, “Price fixing, bid rigging and market allocation promote an environment antithetical to free and open competition in the marketplace. When this occurs, the consumer is not guaranteed the best products at the lowest prices. The U.S. Postal Service spends hundreds of millions of dollars every year on health care associated costs, including expenses related to prescription drugs. Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.” Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division, also commented on the matter, noting that, “The availability of generic medications should be a boon to the public, giving them access to proven drugs at lower prices. When generic pharmaceutical firms engage in price fixing and bid rigging in order to pad their profits, they not only disrupt the free market but do so on the backs of the folks who depend on these drugs. The FBI will continue to investigate and hold accountable companies engaged in such illegal and anticompetitive acts.” In a separate civil settlement, Heritage has also agreed to pay $7.1 million to resolve allegations under the False Claims Act related to the price-fixing conspiracy. The government alleged that, between 2012 and 2015, Heritage paid and received remuneration through © 2020 Thomson Reuters. No claim to original U.S. Government Works. -13- arrangements on price, supply, and allocation of customers with other pharmaceutical manufacturers for certain generic drugs in violation of the Anti-Kickback Statute, and that its sale of such drugs resulted in claims submitted to or purchases by federal healthcare programs. The drugs allegedly involved in this scheme address a wide variety of health conditions, and include hydralazine (used to treat high blood pressure), theophylline (used to treat asthma and other respiratory problems), and glyburide. Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division commented on the civil settlement, stating that, “Price fixing of generic drugs harms federal health care programs and the beneficiaries those programs serve. The Department of Justice will use every tool at its disposal to hold generic drug manufacturers accountable for wrongdoing.” The Anti-Kickback Statute prohibits companies from receiving or paying remuneration in return for arranging the sale or purchase of items such as drugs for which payment may be made by a federal health care program. These provisions are intended to ensure that the supply and price of health care items are not compromised by improper financial incentives. Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Inspector General, Department of Health and Human Services, also commented on the settlement, stating that, “Plotting to raise prices on generic medications is illegal and may result in patients' inability to afford vital medicines. Along with our law enforcement partners at the DOJ, FBI, and Postal-OIG, we will [FN16] continue to investigate allegations of companies engaging in actions that put the public and the Medicare program at risk.” Reckitt Benckiser Group settles opioid claims with federal government for $1.4 billion The Justice Department recently announced that global consumer goods conglomerate Reckitt Benckiser Group plc (RB Group) has agreed to pay $1.4 billion to resolve its potential criminal and civil liability related to a federal investigation of the marketing of the opioid addiction treatment drug Suboxone. The settlement is the largest recovery by the United States in a case involving an opioid drug. It includes the forfeiture of proceeds totaling $647 million, civil settlements with the federal government and the states totaling $700 million, and an administrative resolution with the Federal Trade Commission for $50 million. Suboxone and its active ingredient, buprenorphine, are powerful and addictive opioids. It is approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment. According to Principal Deputy Associate Attorney General Claire Murray, “The opioid epidemic continues to be a serious crisis for our nation, and I'm proud of the work the Department of Justice and our partners are doing to address this epidemic.” Assistant Attorney General Jody Hunt for the Department of Justice's Civil Division also commented on the settlement, noting that, “We are confronting the deadliest drug crisis in our nation's history. Opioid withdrawal is difficult, painful, and sometimes dangerous; people struggling to overcome addiction face challenges that can often seem insurmountable. Drug manufacturers marketing products to help opioid addicts are expected to do so honestly and responsibly.” Until December 2014, RB Group's wholly owned subsidiary, Indivior Inc. (then known as Reckitt Benckiser Pharmaceuticals Inc.) marketed and sold Suboxone throughout the United States. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. On April 9, 2019, a federal grand jury in Virginia indicted Indivior for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone. The United States' criminal trial against Indivior is scheduled to begin on May 11, 2020, in the United States District Court in Abingdon, Virginia. To resolve its potential criminal liability arising from the conduct alleged in the indictment of Indivior, RB Group has executed a non- prosecution agreement that requires the company to forfeit $647 million of proceeds it received from Indivior and not to manufacture, market, or sell Schedule I, II, or III controlled substances in the United States for three years. RB Group has also agreed to cooperate fully with all investigations and prosecutions by the Department of Justice related, in any way, to Suboxone. According to First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia, “Today's announcement demonstrates that this office will work tirelessly to address all facets of the opioid epidemic. This historic resolution is the product of a continued partnership with the Virginia Medicaid Fraud Control Unit, FDA, HHS, and the U.S. Postal Service.” According to the indictment, Indivior (when it was a subsidiary of RB Group) promoted the film version of Suboxone (Suboxone Film) to physicians, pharmacists, Medicaid administrators, and others across the country as less-divertible and less-abusable and safer around children, families, and communities than other buprenorphine drugs. These claims, however, have never been substantiated. The indictment also alleges that Indivior advertised its “Here to Help” internet and telephone program as a resource for opioid-addicted patients. Instead, the company used the program to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in a “careless and clinically unwarranted” manner. The indictment also alleges that Indivior announced a “discontinuance” of its tablet form of Suboxone based on supposed “concerns regarding pediatric exposure” to tablets. The company's executives, however, knew that the main reason for the discontinuance was to delay the Food and Drug Administration's approval of generic tablet forms of the drug. The indictment alleges Indivior's scheme was highly successful, fraudulently converting thousands of opioid-addicted patients over to Suboxone Film. It also caused state Medicaid programs to expand and maintain coverage of Suboxone Film at substantial cost to the government. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -14- Virginia Attorney General Mark Herring commented on the settlement, stating, “This is a landmark moment in our fight to hold drug companies responsible for their role in the opioid crisis. We will not allow anyone to put profits over people, or to exacerbate or exploit the opioid crisis for their own benefit. The Virginia Medicaid Fraud Control Unit's expertise, capacity, and diligent investigation, combined with strong relationships with local, state, and federal partners, helped make this resolution possible.” Under the civil settlement, RB Group has agreed to pay a total of $700 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $700 million settlement amount includes $500 million to the federal government and up to $200 million to states that opt to participate in the agreement. The civil settlement addresses allegations by the United States that, from 2010 through 2014, RB Group directly or through its subsidiaries knowingly: (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions without any counseling or psychosocial support and for uses that were unsafe, ineffective, and medically unnecessary and that were often diverted for uses that lacked a legitimate medical purpose; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone in order to improperly control pricing of Suboxone, including pricing to federal healthcare programs. Under a separate agreement with the Federal Trade Commission (FTC), RB Group has agreed to pay $50 million to resolve claims that [FN17] it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). Opioid maker Insys Therapeutics settles civil and criminal claims with federal government for $225 million The U.S. Department of Justice recently announced that Opioid manufacturer Insys Therapeutics has agreed to a global resolution to settle the government's separate criminal and civil investigations. As part of the criminal resolution, Insys will enter into a deferred prosecution agreement with the government, and Insys' operating subsidiary will plead guilty to five counts of mail fraud. The company will also pay a $2 million fine and $28 million in forfeiture. As part of the civil resolution, Insys agreed to pay $195 million to settle allegations that it violated the False Claims Act. Both the criminal and civil investigations originated out of Insys' payment of kickbacks and other unlawful marketing practices in connection with the marketing of Subsys. Subsys is a sublingual fentanyl spray, which is a powerful and highly addictive opioid painkiller. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving (and tolerant to) around-the-clock opioid therapy. The U.S. Attorney's Office for the District of Massachusetts filed an Information charging Insys and its operating subsidiary with five counts of mail fraud. According to the charging document, from August 2012 to June 2015, the company began using “speaker programs” to increase brand awareness of Subsys through peer-to-peer educational lunches and dinners. These programs, however, were actually used as a vehicle to pay bribes and kickbacks to specific practitioners in exchange for increased Subsys prescriptions to patients and for increased dosage of those prescriptions. For example, one practitioner targeted by Insys was a physician's assistant who practiced with a pain clinic in Somersworth, New Hampshire. During the first year that Subsys was on the market, the physician's assistant did not write any Subsys prescriptions for his patients. In May 2013, the physician's assistant joined Insys' speaker program knowing that it was a way to receive kickbacks for writing Subsys prescriptions. After joining the speaker program, the physician's assistant wrote approximately 672 Subsys prescriptions for his patients, many of which were medically unnecessary. The physician's assistant received $44,000 in kickbacks from Insys for these prescriptions. As part of the criminal resolution, Insys agreed to a detailed statement of facts outlining its criminal conduct with respect to the illegal marketing of Subsys. The company will also enter into a five-year deferred prosecution agreement with the government. Insys' operating subsidiary will plead guilty to five counts of mail fraud pursuant to the plea agreement that will be filed in the District of Massachusetts. Insys will pay a criminal fine of $2 million and forfeiture of $28 million. Earlier this year, five former Insys executives were convicted at trial of racketeering conspiracy in connection with the marketing of Subsys. Eight Insys executives have now been convicted in Boston for crimes relating to the illegal marketing of Subsys. In April 2018, the United States also intervened in five qui tam lawsuits accusing Insys of violating the False Claims Act. In its Complaint, the United States alleged that Arizona-based Insys paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. In addition to payments for the “sham” speaker program speeches referenced in the criminal matter, the kickbacks also allegedly took the form of jobs for the prescribers' relatives and friends, as well as lavish meals and entertainment. The United States also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients' diagnoses in order to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries. According to Principal Deputy Associate Attorney General Claire Murray, “The Department of Justice is committed to taking steps to address the opioid epidemic. Illegal conduct by pharmaceutical manufacturers, especially in the midst of the opioid crisis, will © 2020 Thomson Reuters. No claim to original U.S. Government Works. -15- not be tolerated. We will continue to investigate and vigorously prosecute these types of allegations and hold opioid manufacturers accountable under the law.” Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division also commented on the settlement, stating that, “The opioid epidemic has devastated communities and ravaged families across this country. The Department of Justice is committed to using the legal tools at our disposal to combat the illegal marketing and distribution of opioids, including fentanyl. Today's settlement sends a strong message to pharmaceutical manufacturers that the kinds of illegal conduct that we have alleged in this case will not be tolerated. I want to assure the families and communities ravaged by this epidemic that the Department of Justice will hold opioid manufacturers accountable for their actions.” Insys entered into a five-year Corporate Integrity Agreement (CIA) and Conditional Exclusion Release with the Office of Inspector General (OIG). Because of the company's extensive cooperation in the prosecution of “culpable individuals” and its agreement to enhanced CIA requirements, OIG did not pursue exclusion of Insys from federal health care programs at this time. The CIA includes enhanced material breach provisions, designed to protect Federal health care programs and beneficiaries. Insys also admitted to a Statement of Facts and acknowledged that the facts provide a basis for permissive exclusion. OIG did not release its permissive exclusion authority, as it usually does for CIA parties in False Claims Act settlements. OIG, however, will provide such a release only after Insys satisfies its obligations under the CIA. The allegations resolved by the settlement relate to five lawsuits that were filed under the qui tam, or whistleblower, provisions of the False Claims Act. This Act allows private citizens to bring suit on behalf of the United States for false claims and share in any recovery. The whistleblowers' share of the recently announced settlement has yet to be been determined. Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, noted that, “The announced settlement is a vivid example of the Department of Defense's dogged efforts to protect the integrity of the U.S. military's health care system and its beneficiaries. DCIS remains committed to working with its law enforcement partners and the U.S. Attorney's Office to combat health care fraud, especially when pharmaceutical companies use taxpayers' dollars to induce physicians with bribes and kickbacks to [FN18] prescribe their drugs for unauthorized off-label usage that may very well endanger the recipient's health and safety.” DOJ criminally charges 41 people for alleged role in pill mill clinics and pharmacies resulting in diversion of 23 million opiate pills The Department of Justice has charged 41 individuals for their alleged involvement in a network of “pill mill” clinics and pharmacies. Those charged include medical providers, clinic owners and managers, pharmacists, pharmacy owners and managers, as well as drug dealers and traffickers. Their actions allegedly resulted in the diversion of approximately 23 million oxycodone, hydrocodone, and carisoprodol pills. Federal law enforcement agents also executed 36 search warrants including 15 pharmacies and six “pill mill” clinics, as well as other offices and residences. These warrants were intended to disrupt networks of opioid diversion. The Drug Enforcement Administration (DEA) also served immediate suspension orders on seven pharmacies and two providers involved in dispensing controlled substances without legitimate medical purpose. The Health Care Fraud Unit of the Criminal Division's Fraud Section (HCF Unit) led the enforcement actions in conjunction with U.S. Attorney's Offices (USAOs) for the Southern and Eastern Districts of Texas and District of Massachusetts, as well as the DEA and task force officers from greater Houston police departments and the FBI. The charges allege participating doctors, medical professionals, and pharmacies knew the prescriptions had no legitimate medical purpose and were outside the usual course of professional practice. In some cases, “crew leaders” and “runners” allegedly filled or had the individuals who posed as patients fill the illegal prescriptions at Houston-area pharmacies. The owner and pharmacist in charge at one pill mill pharmacy allegedly dispensed the second highest amount of oxycodone 30mg pills of all pharmacies in the entire State of Texas in 2019, and the ninth highest amount in the nation. One hundred percent of the oxycodone dispended by this pharmacy was in the highest available dosage strength of that drug. The indictments also allege that drug dealers and traffickers diverted and distributed the controlled substances to the streets, and that some pills were trafficked from Houston to Boston. According to Assistant Attorney General Brian A. Benczkowski of the Justice Department's Criminal Division, “Today's action shows that the Department of Justice continues to relentlessly pursue criminals, including medical professionals, who peddle opioids for profit. Our use of data analytics means that no one engaging in this criminal behavior is invisible. And if you behave like a drug dealer, we are going to find you and treat you like a drug dealer.” Special Agent in Charge Will R. Glaspy of the DEA's Houston Division also commented on the indictments, noting that, “This type of criminal activity is, in part, what is fueling the 68,500 overdose deaths per year across the United States. The DEA and our numerous law enforcement partners will not sit silently while drug dealers wearing lab coats conspire with street dealers to flood our communities with over 23 million dangerous and highly addictive pills.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -16- In addition to the Strike Force prosecutions, law enforcement conducted additional enforcement actions, including the execution of search warrants and suspension of DEA registration numbers. In the Southern District of Texas, 350 law enforcement personnel executed a total of 36 search and seizure warrants including 15 pharmacies and six clinics. DEA also issued nine immediate suspension orders (ISOs) to support related investigative efforts to interrupt an opioid drug diversion distribution chain. The Fraud Section leads the Medicare Fraud Strike Force (MFSF), which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, MFSF maintains 15 strike forces operating in 24 districts and has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. Special Agent in Charge Perrye K. Turner of the FBI's Houston Field Office also commented on the recent charges. Turner noted that, “Opioid abuse has a devastating and far reaching effect on our society. The doctors, nurses and pharmacists in this case allegedly misused their positions, violating the trust of the public they took an oath to serve. Together with their co-conspirators, these medical professionals released millions of highly addictive drugs onto the streets of our community. FBI Houston remains committed to working alongside our federal, state, and local partners to combat this epidemic and protect our neighborhoods.” In addition to the cases publicized today, Assistant Attorney General Benczkowski and U.S. Attorneys Ryan K. Patrick and John F. Bash also announced that the HCF Strike Force will expand into the Rio Grande Valley and San Antonio, making it the 24th district with such a presence. The HCF Strike Force is a joint law enforcement effort that brings together the resources and expertise of the HCF Unit, USAOs and law enforcement partners at the FBI, Health and Human Services - Office of the Inspector General (HHS-OIG) and DEA. “By and large, these clinics are all about money and not the patient,” said U.S. Attorney Patrick. “If it was about the patient, no legitimate doctor would write, and no legitimate pharmacy would fill, these massive amounts and combinations of controlled substances. Pill mills are magnets for crime and should be eradicated. I am happy and willing to partner with any agency or police department in shutting down and prosecuting these places. I am also eager to expand our work into healthcare fraud in the Rio Grande Valley. These grifters are wasting tax payer money and making healthcare more expensive for everyone else.” According to U.S. Attorney Bash, “I am excited to team with Assistant Attorney General Benczkowski and U.S. Attorney Patrick to fight healthcare fraud in San Antonio and the Rio Grande Valley. Fraud in the healthcare system not only rips off innocent victims and taxpayers, but it also quite often endangers the health of patients – as with the illegal distribution of addictive opioids. For that reason, [FN19] it's a major priority for all of us.” Johnson & Johnson announces settlement with two Ohio counties in Cleveland-based opioid lawsuit Johnson & Johnson and its Janssen Pharmaceutical Companies recently announced a settlement agreement with the Ohio counties of Cuyahoga and Summit that resolves all of the counties' claims with no admission of liability. The settlement also removes the company from the federal trial scheduled to begin October 21, 2019. As part of the agreement, the company will make a combined $10 million settlement payment to the counties. According to a press release from the company, “The settlement allows the Company to avoid the resource demands and uncertainty of a trial as it continues to seek meaningful progress in addressing the nation's opioid crisis. The Company recognizes the opioid crisis is a complex public health challenge and is working collaboratively to help communities and people in need.” Under the terms of the settlement, Johnson and Johnson has also agreed to reimburse $5 million of the counties' legal fees and other expenses incurred in preparation for the trial. Furthermore, the company will direct $5.4 million of its charitable contributions to non- profit organizations related to opioid-related programs in these two counties. The press release also stated that the company “is open to identifying an appropriate, comprehensive resolution of the overall opioid litigation. At the same time, the Company remains prepared to defend its actions. The Company responsibly marketed DURAGESIC®, NUCYNTA® and NUCYNTA® ER, which, since launch, have accounted for less than one percent of total opioid prescriptions in the United States. The Company sold the U.S. marketing rights for NUCYNTA® in 2015 and has not marketed DURAGESIC® in the U.S. [FN20] since 2008.” Drug maker Avanir settles civil and criminal allegations relating to its marketing of Nuedexta; agrees to pay over $100 million The Justice Department recently announced charges against Avanir Pharmaceuticals (Avanir), a pharmaceutical manufacturer based in Aliso Viejo, California, for allegedly paying kickbacks to a physician to induce prescriptions of its drug Nuedexta. The Northern District of Ohio also announced indictments of four individuals, including former Avanir employees and one of the top prescribers of Nuedexta in the country, who were allegedly involved in the same kickback scheme. Avanir has also agreed to pay over $95 million to resolve civil False Claims Act allegations of kickbacks as well as its false and misleading marketing of Nuedexta to providers in long term care facilities to induce them to prescribe it for behaviors commonly associated with dementia patients, which is not an approved use of the drug. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -17- According to Assistant Attorney Jody Hunt of the Department of Justice's Civil Division, “Kickbacks have the power to corrupt a provider's medical judgment. And it is particularly concerning when a pharmaceutical company uses kickbacks to drive up sales in connection with a vulnerable population, such as elderly patients in nursing care facilities.” As alleged in a one-count Information filed today in the United States District Court for the Northern District of Georgia, Avanir violated the Anti-Kickback Statute by paying a doctor to induce him to become a high prescriber of Nuedexta to beneficiaries of federal healthcare programs. The company allegedly offered the doctor financial incentives to write additional Nuedexta prescriptions for beneficiaries of federal healthcare programs, and inducing him to recommend that other physicians prescribe Nuedexta to beneficiaries of federal healthcare programs. The Northern District of Georgia also announced a deferred prosecution agreement resolving the charge. Under the agreement's terms, Avanir will pay a monetary penalty in the amount of $7,800,000, and a forfeiture in the amount of $5,074,895. The United States will defer prosecuting Avanir for a period of three years to allow the company to comply with the agreement's terms. The agreement will not be final until accepted by the court. The Northern District of Ohio also announced indictments of four individuals who paid or received kickbacks from Avanir. According to U.S. Attorney for the Northern District of Ohio, Justin Herdman, “Doctors should prescribe medicine based on what is best for their patients, not on which drug company is paying for their travel and meals.” In a separate civil settlement, Avanir has agreed to pay $95,972,017 to the United States to resolve allegations under the False Claims Act related to its marketing of Nuedexta. The government alleged that, between October 29, 2010, and December 31, 2016, Avanir provided remuneration in the form of money, honoraria, travel, and food to certain physicians and other health care professionals to induce them to write prescriptions for Nuedexta. One form of remuneration included Avanir's payment to certain health care professionals to give talks (also known as “speaker's programs”) about Nuedexta based on their willingness to prescribe Nuedexta. These events were primarily social, with no educational value. Avanir also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA requires, among other things, that Avanir implement additional controls around its interactions with physicians and conduct internal and external monitoring of promotional and other activities. It also increases individual accountability by requiring compliance-related certifications from its Board and key executives. Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the Department of Health and Human Services, also commented on the settlement. Mr. Jackson stated that, “Paying kickbacks to medical providers in an effort to increase profits is illegal and diminishes the trust and credibility of drug companies who engage in these activities. My agency's five-year compliance agreement [FN21] with Avanir has been tailored to ensure such alleged behavior will not be repeated.” Several states reach $117 million settlement with Johnson & Johnson and Ethicon over marketing of transvaginal surgical mesh devices Connecticut Attorney General William Tong and Consumer Protection Commissioner Michelle H. Seagull recently announced a multistate settlement, including 40 other states and the District of Columbia, requiring Johnson & Johnson and its subsidiary Ethicon, Inc. to pay nearly $116.9 million for their allegedly deceptive marketing of transvaginal surgical mesh devices. Transvaginal surgical mesh is a synthetic material that is surgically implanted through the vagina to support the pelvic organs of women who suffer from stress urinary incontinence or pelvic organ prolapse. According to Tong's office, a multistate investigation found the companies violated state consumer protection laws by misrepresenting the safety and effectiveness of the devices and failing to sufficiently disclose risks associated with their use. Connecticut will receive $1.96 million under the settlement. Attorney General Tong commented on the settlement, stating that, “Johnson & Johnson and Ethicon falsely marketed these devices as safe and failed to warn women of serious side effects. These practices were unlawful and unacceptable. This significant settlement —the fourth largest consumer protection health fraud multistate settlement in U.S. history—sends a clear message that states will aggressively pursue such deceptive medical marketing cases.” Tong further noted that, “In addition to the $116.9 million fine, the companies have agreed to a series of important changes to their marketing practices to ensure patients have knowledge about all relevant risks associated with these devices.” State Consumer Protection Commissioner Michelle H. Seagull also commented on the settlement, observing that, “Deceptive marketing practices are always troubling, but they become even more serious when those claims are related to products that are supposed to make us healthier – but actually have a risk of hurting us. I am pleased that this settlement has been reached, and hope that that this helps ensure that others will follow the law when advertising products like this in the future.” The multistate investigation concluded that the companies misrepresented or failed to adequately disclose the products' possible side effects, including the risk of chronic pain and inflammation, mesh erosion through the vagina, incontinence developing after surgery, © 2020 Thomson Reuters. No claim to original U.S. Government Works. -18- painful sexual relations, and vaginal scarring. The companies were allegedly aware of the possibility for serious medical complications but did not provide sufficient warnings to consumers or surgeons who implanted the devices. Under the settlement, Johnson & Johnson has agreed to pay $116.86 million to the 41 participating states and District of Columbia. The settlement also involves injunctive relief, requiring full disclosure of the device's risks and accurate information on promotional material, in addition to the product's “information for use” package inserts. Included in the specific requirements set forth in the settlement, the companies must: • Refrain from referring to the mesh as “FDA approved” when that is not the case; • Refrain from representing in promotions that risks associated with mesh can be eliminated with surgical experience or technique alone; • Ensure that product training provided to medical professionals covers the risks associated with the mesh; • Omit claims that surgical mesh stretches after implantation, that it remains soft after implantation, that foreign body reactions are transient and that foreign body reactions “may” occur (when in fact they will occur); • Disclose that mesh risks include: fistula formation, inflammation, as well as mesh extrusion, exposure and erosion into the vagina and other organs; • Disclose risks of tissue contraction, pain with intercourse, loss of sexual function, urge incontinence, de novo incontinence, infection following transvaginal implantation and vaginal scarring; and • Disclose that risks include that revision surgeries may be necessary to treat complications, that revision surgeries may not resolve complications and that revision surgeries are also associated with a risk of adverse reactions. States who joined Connecticut in the multistate settlement include Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, [FN22] Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, and Wisconsin. Oregon Attorney General explains decision to reject Purdue Pharma's opioid settlement proposal Oregon Attorney General Ellen Rosenblum recently released a statement explaining why she joined 24 other state attorneys general in rejecting an opioid settlement proposal from Purdue Pharma and members of the Sackler family, who run the company. Oregon's lawsuit, which was filed in state court in Multnomah County, alleges that Purdue “lit the match that sparked an inferno of addiction and related devastation across our state and nation.” Several other similar lawsuits have been filed around the country by states and local governments, as well as by Indian tribes. The proposed settlement, valued at approximately $10 billion to be paid out over several years, was rejected by Rosenblum. She suggests that the Sacklers have “drained” nearly $11 billion from their company. According to Rosenblum, “So instead of cash from Purdue or from the Sacklers' current holdings, a disingenuous scheme is being pushed on us: Purdue has filed for bankruptcy. Purdue is to be turned into a Public Benefit Trust — and will continue to sell opioids, the proceeds from which will be used to fund most of the proposed settlement over the next seven years.” Rosenblum also stated that, “We need transparency as to the riches the Sacklers have absconded with. We need more in compensation than is currently being proposed, and we need it now — not seven years from now…. We need more Naloxone, a powerful medicine that can reverse overdoses. We need more treatment options for substance use. We need to have Purdue Pharma [FN23] liquidated, not repurposed. And we need to have the Sacklers permanently banned from the pharmaceutical business.” Reckitt Benckiser Group settles with states for $700 million over Suboxone marketing claims Pennsylvania Attorney General Josh Shapiro recently announced that Pennsylvania and other states have reached a $700 million settlement with pharmaceutical distributor Reckitt Benckiser Group, resolving allegations that the company improperly marketed Suboxone and defrauded state Medicaid systems. Suboxone is a drug approved for use by individuals recovering from substance abuse disorder to avoid or reduce withdrawal symptoms while they undergo treatment. Suboxone and its active ingredient, buprenorphine, are addictive opioids. According to Attorney General Shapiro, “Suboxone is critical for helping individuals recovering from substance abuse disorder reduce withdrawal symptoms and stay in recovery. But this company improperly marketed it by not revealing its risks and promoting it to physicians with unsafe prescribing practices. Reckitt's recklessness put the health and wellbeing of patients at risk and defrauded state Medicaid systems, which provide health care to low income residents. Today's settlement holds Reckitt accountable for its misconduct and restores badly needed funds to the Medicaid programs.” Reckitt is a public limited company headquartered in Slough, England, the United Kingdom. Reckitt's wholly owned subsidiary Indivior Inc. (then known as Reckitt Benckiser Pharmaceuticals Inc.) distributed, marketed, and sold Suboxone Sublingual Tablets and Suboxone Sublingual Film in the United States until December 23, 2014. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -19- Under the terms of the settlement, Reckitt will pay $700 million to resolve various civil fraud allegations impacting Medicaid and other government healthcare programs. More than $400 million of the settlement will go to the Medicaid programs. Pennsylvania will receive more than $53 million of the settlement. The civil settlement resolves allegations that, from 2010 through 2014, Reckitt, directly or through its subsidiaries, knowingly: • Promoted the sale and use of Suboxone to physicians who were writing prescriptions to patients without any counseling or psychosocial support and for uses that were unsafe, ineffective, medically unnecessary, and often diverted for an illegitimate medical purpose. • Promoted the sale or use of Suboxone Sublingual Film based on false and misleading claims that it was less subject to diversion and abuse than other buprenorphine products and less susceptible to accidental pediatric exposure than Suboxone Sublingual Tablets; • Submitted a petition to the Food and Drug Administration on Sept. 25, 2012, that fraudulently claimed it had discontinued manufacturing and selling Suboxone Sublingual Tablet “due to safety concerns” about the formulation of the drug; and • Took other steps to fraudulently delay the entry of generic competition for various forms of Suboxone to improperly control the pricing of Suboxone, including pricing to federal healthcare programs. The civil settlement resolves the claims against Reckitt brought in six qui tam lawsuits pending in federal courts in the Western District of Virginia and the District of New Jersey. A National Association of Medicaid Fraud Control Units (“NAMFCU”) Team participated in the [FN24] investigation and in settlement negotiations. Four states settle with drug makers and distributors for $48 billion over alleged roles in opioid epidemic North Carolina Attorney General Josh Stein recently announced that he, along with the attorneys general of Tennessee, Pennsylvania, and Texas, have reached a $48 billion settlement framework with Cardinal Health, McKesson, AmersourceBergen, Johnson & Johnson, and Teva over their alleged roles in the opioid epidemic. The attorneys general are hopeful that other states will join this agreement in the near future. The settlement includes $22 billion in cash and $26 billion in medication assisted treatment drugs and their distribution over 10 years. According to Attorney General Stein, “The opioid epidemic has ripped through our communities and left a trail of death and destruction in its wake. This agreement is an important step in our progress to help restore people's lives. Not only will it provide significant funds and treatment drugs to help people get healthy, it will go a long way in preventing the pill mills that fed so many people's addictions in North Carolina and around the nation.” In addition to the money and treatment drugs, McKesson, Cardinal, and Amerisource Bergen have also agreed to change their policies to prevent over-distribution in the future. Those three companies agreed to take aggressive internal action, including conducting data aggregation and review to prevent over distribution, conducting due diligence on pharmacies to prevent pill mills, and training delivery drivers to identify and report potential pill mills. McKesson, Cardinal, and AmerisourceBergen have also agreed to work to develop an independent clearinghouse to aggregate data and identify where drugs are being sent and at what rate. Johnson & Johnson and Teva, two manufacturers of opioids, have agreed to abstain from marketing any opioid products. The recently announced framework is an agreement in principle. Each state and its local governments will receive a share of the $22 billion in cash to take action to abate the crisis, including providing addiction treatment, community paramedic services, and telehealth [FN25] treatment. The distribution of cash will be based on a formula that will be finalized in the future. Illinois announces $242 million settlement with drug companies over Medicaid rate setting Illinois Attorney General Kwame Raoul recently announced that the state has recovered $242 million in a settlement with several drug companies resolving allegations that the companies inflated the wholesale prices used in setting the rates for Medicaid reimbursements. The companies involved in the settlement include Abbott Laboratories, Inc.; Aventis Pharmaceuticals Inc.; Aventis Behring LLC, n/k/a ZLB Behring; B. Braun Medical Inc.; Forest Laboratories, Inc.; GlaxoSmithKline LLC; Johnson & Johnson, Inc.; Janssen Pharmaceutical Products, LP; McNeil-PPC, Inc.; Ortho Biotech Products, LP; Ortho-McNeil Pharmaceutical, Inc.; Novartis Pharmaceuticals Corporation; Pfizer Inc.; Pharmacia Corporation; and TAP Pharmaceutical Products, Inc. This is the final settlement in the Attorney General's lawsuit against more than four dozen drug makers for allegedly fraudulently inflating prices for prescription medications. The Illinois Attorney General's office has recovered more than $678 million in settlements from the suit. According to Attorney General Raoul, “These companies engaged in a deceptive and illegal scheme to manipulate the drug pricing system to boost their own earnings, and the people of Illinois paid the price. I am pleased that we were able to hold them accountable for their actions and recover $678 million for the state. My office is committed to continuing to fight on behalf of consumers to stop unfair conduct by drug companies.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -20- In 2005, the Attorney General's office filed a lawsuit against the drug companies for allegedly deceptive practices related to the Average Wholesale Price (AWP) of numerous prescription drugs. The lawsuit claimed that the drug makers fraudulently published inflated AWPs seeking larger profits for themselves. State Medicaid programs use the AWP to determine reimbursement amounts for drugs prescribed to Medicaid patients. The lawsuit alleged that the inflated prices resulted in overpayment in drug costs by the state of Illinois. The [FN26] recently announced settlement fully resolves the 2005 lawsuit. DOJ announces lawsuit over alleged infringement of HIV related patents owned by HHS The U.S. Department of Justice recently announced that the United States has filed a complaint alleging infringement by Gilead Sciences Inc. and Gilead Sciences Ireland UC (collectively, Gilead) of four U.S. patents awarded to and owned by the United States, Department of Health and Human Services (HHS). The patents at issue cover specific drug regimens used for pre-exposure prophylaxis (commonly referred to as PrEP) that prevents HIV transmission. The complaint alleges infringement in connection with two of Gilead's drugs, Truvada and Descovy. Gilead markets these drugs for use to prevent HIV as part of the PrEP regimen. Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division noted that, “Gilead has received billions of dollars in revenue from HIV prevention regimens invented by HHS researchers and patented by the United States. This lawsuit demonstrates the Department's commitment to protect the government's intellectual property and hold accountable those who seek to unfairly gain from the government's research without paying reasonable royalties as the law requires.” HHS Secretary Alex Azar II also commented on the lawsuit, stating that, “HHS recognizes Gilead's role in selling Truvada and Descovy to patients for prevention of HIV. Communities have put these drugs to use in saving lives and reducing the spread of HIV. However, Gilead must respect the U.S. patent system, the groundbreaking work by CDC researchers, and the substantial taxpayer contributions to the development of these drugs. The complaint filed today seeks to ensure that they do.” In the early 2000's, researchers at the Centers for Disease Control and Prevention's (CDC) Division of HIV/AIDS Prevention invented two-drug regimens that could prevent people from becoming infected with HIV. These inventions demonstrated that regular prophylactic doses of a combination of two antiretroviral drugs could prevent the transmission and reproduction of the virus that causes AIDS in at- risk populations. The government has spent hundreds of millions of dollars on clinical studies of these treatment regimens. According to the DOJ, “These regimens have ushered in a new era in HIV prevention and are currently a critical component of the government's efforts to end the HIV epidemic.” During the 2019 State of the Union address, President Trump announced a new initiative entitled “Ending the HIV Epidemic: A Plan for America,” with the goal of reducing new HIV infections by 90 percent by 2030. Expanding the use of PrEP drug regimens will be a key component for preventing the spread of HIV across the United States. Gilead manufactures, markets, and sells Truvada and Descovy. Gilead had originally obtained FDA approvals for those products to be used solely for treating HIV in combination with other drugs. It was only after CDC's PrEP work and subsequent human trials that Gilead sought FDA approvals for Truvada and Descovy to be used as part of PrEP drug regimens to prevent HIV. Gilead now markets and sells Truvada and Descovy for PrEP regimens that CDC developed and patented. The DOJ contends that Gilead has repeatedly refused to obtain a license for use of the patented drug regimens, while continuing to profit from hundreds of millions of dollars of publicly funded research. Instead of paying royalties owed to the United States, Gilead has challenged the validity of all four patents before the Patent and Trademark Office. The DOJ argues that this move contradicts the testimony of Gilead's CEO, Daniel O'Day, before the Oversight Committee of the U.S. House of Representatives that Gilead had “chosen not to challenge [the United States'] patents because we [FN27] value our collaborative relationship with the agency.” The United States maintains that all four patents were validly issued. © Copyright Thomson/West - NETSCAN's Health Policy Tracking Service [FN1] . “Drug Maker Actelion Agrees to Pay $360 Million to Resolve False Claims Act Liability for Paying Kickbacks,” December 6, 2018, available at: https://www.justice.gov/opa/pr/drug-maker-actelion-agrees-pay-360-million-resolve-false-claims-act-liability-paying. [FN2] . “Eight Dallas-Area Pharmacy Owners and Marketers Charged in $9 Million Kickback Scheme,” December 19, 2018, available at: https://www.justice.gov/opa/pr/eight-dallas-area-pharmacy-owners-and-marketers-charged-9-million-kickback-scheme. [FN3] © 2020 Thomson Reuters. No claim to original U.S. Government Works. -21- . “Manhattan U.S. Attorney Announces $269.2 Million Recovery From Walgreens In Two Civil Healthcare Fraud Settlements,” January 22, 2019, available at: https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-2692-million-recovery-walgreens-two- civil-healthcare. [FN4] . “District Court Enters Permanent Injunction Against Pennsylvania Compounding Pharmacy and its Owner to Prevent Adulteration Of Drugs,” February 7, 2019, available at: https://www.justice.gov/opa/pr/district-court-enters-permanent-injunction-against-pennsylvania-compounding-pharmacy-and-its. [FN5] . “RAOUL announces $120 million settlement with Johnson & Johnson and Medical Device Business Inc. over false & misleading statements,” January 22, 2019, available at: http://www.illinoisattorneygeneral.gov/pressroom/2019_01/20190122.html. [FN6] . “FTC Enters Global Settlement to Resolve Reverse-Payment Charges against Teva,” February 19, 2019, available at: https:// www.ftc.gov/news-events/press-releases/2019/02/ftc-enters-global-settlement-resolve-reverse-payment-charges. [FN7] . “Mississippi Woman Pleads Guilty to Health Care Fraud, Money Laundering and Tax Evasion Charges for Role in $200 Million Compounding Pharmacy Scheme,” February 20, 2019, available at: https://www.justice.gov/opa/pr/mississippi-woman-pleads-guilty-health-care-fraud-money-laundering-and-tax-evasion-charges. [FN8] . “Lehigh Valley Technologies, Inc. to Pay $4 Million to Resolve False Claims Act Liability for Scheme to Avoid FDA New Drug Application Fee,” February 22, 2019, available at: https://www.justice.gov/usao-edpa/pr/lehigh-valley-technologies-inc-pay-4-million- resolve-false-claims-act-liability-schem-0. [FN9] . “Florida Compounding Pharmacy And Its Owners To Pay At Least $775,000 To Resolve False Claims Act Allegations,” February 14, 2019, available at: https://www.justice.gov/usao-mdfl/pr/florida-compounding-pharmacy-and-its-owners-pay-least-775000-resolve-false- claims-act. [FN10] . “Attorney General Hunter Announces Historic $270 Million Settlement with Purdue Pharma, $200 Million to Establish Endowment for OSU Center for Wellness,” March 26, 2019, available at: http://www.oag.ok.gov/attorney-general-hunter-announces-historic-270- million-settlement-with-purdue-pharma-200-million-to-establish-endowment-for-osu-center-for-wellness. [FN11] . “Bayer reaches settlement to resolve Xarelto™ litigation,” March 25, 2019, available at: https://media.bayer.com/baynews/ baynews.nsf/id/Bayer-reaches-settlement-to-resolve-Xarelto-litigation?Open&parent=news-overview-category-search-en&ccm=020. [FN12] . “Indivior Inc. Indicted for Fraudulently Marketing Prescription Opioid,” April 9, 2019, available at: https://www.justice.gov/usao-wdva/pr/ indivior-inc-indicted-fraudulently-marketing-prescription-opioid. [FN13] . “Manhattan U.S. Attorney And DEA Announce Charges Against Rochester Drug Co-Operative And Two Executives For Unlawfully Distributing Controlled Substances,” April 23, 2019, available at: https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-and-dea- announce-charges-against-rochester-drug-co-operative-and. [FN14] . “District Court Enters Permanent Injunction Against Texas Compounding Pharmacy and Its Owners to Prevent Distribution of Adulterated Drugs,” May 22, 2019, available at: https://www.justice.gov/opa/pr/district-court-enters-permanent-injunction-against-texas- compounding-pharmacy-and-its-owners. [FN15] . “DEA and U.S. Attorney in the Western District of Louisiana announce settlement with drug distributor,” May 24, 2019, available at: https://www.dea.gov/press-releases/2019/05/24/dea-and-us-attorney-western-district-louisiana-announce-settlement-drug. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -22- [FN16] . “Pharmaceutical Company Admits to Price Fixing in Violation of Antitrust Law, Resolves Related False Claims Act Violations,” May 31, 2019, available at: https://www.justice.gov/opa/pr/pharmaceutical-company-admits-price-fixing-violation-antitrust-law-resolves-related- false. [FN17] . “Justice Department Obtains $1.4 Billion from Reckitt Benckiser Group in Largest Recovery in a Case Concerning an Opioid Drug in United States History,” July 11, 2019, available at: https://www.justice.gov/opa/pr/justice-department-obtains-14-billion-reckitt- benckiser-group-largest-recovery-case. [FN18] . “Opioid Manufacturer Insys Therapeutics Agrees to Enter $225 Million Global Resolution of Criminal and Civil Investigations,” June 5, 2019, available at: https://www.justice.gov/opa/pr/opioid-manufacturer-insys-therapeutics-agrees-enter-225-million-global-resolution- criminal. [FN19] . “Charges Filed Against Dozens in Trafficking Network Responsible for Diverting Over 23 Million Oxycodone, Hydrocodone and Carisoprodol Pills,” August 28, 2019, available at: https://www.justice.gov/opa/pr/charges-filed-against-dozens-trafficking-network- responsible-diverting-over-23-million. [FN20] . “Johnson & Johnson Reaches Settlement Agreement with Two Ohio Counties Ahead of Upcoming Opioid Trial,” October 1, 2019, available at: https://www.jnj.com/johnson-johnson-reaches-settlement-agreement-with-two-ohio-counties-ahead-of-upcoming-opioid- trial. [FN21] . “Pharmaceutical Company Targeting Elderly Victims Admits to Paying Kickbacks, Resolves Related False Claims Act Violations,” September 26, 2019, available at: https://www.justice.gov/opa/pr/pharmaceutical-company-targeting-elderly-victims-admits-paying- kickbacks-resolves-related. [FN22] . “Attorney General Tong, Department of Consumer Protection Announce $116.9 Million Multistate Settlement With Johnson & Johnson, Ethicon, Inc.,” October 17, 2019, available at: https://portal.ct.gov/AG/Press-Releases/2019-Press-Releases/CT- ANNOUNCES-MULTISTATE-SETTLEMENT-WITH-JOHNSON-AND-JOHNSON-AND-ETHICON. [FN23] . Ellen Rosenblum, “Oregon's AG on why Purdue Pharma's opioid settlement will only fuel the ‘inferno of addiction’,” September 25, 2019, available at: https://www.bizjournals.com/portland/news/2019/09/25/oregons-ag-on-why-purdue-pharmas-opioid-settlement.html. [FN24] . “AG Shapiro Announces $700 Million Settlement with Reckitt Benckiser for Improper Marketing of Suboxone,” October 24, 2019, available at: https://www.attorneygeneral.gov/taking-action/press-releases/ag-shapiro-announces-700-million-settlement-with-reckitt- benckiser-for-improper-marketing-of-suboxone/. [FN25] . “Attorney General Josh Stein Announces $48 Billion Settlement Framework with Five Companies Over Opioid Epidemic,” October 21, 2019, available at: https://ncdoj.gov/attorney-general-josh-stein-announces-48-billion-settlement-framework-with-five-companies-over- opioid-epidemic/. [FN26] . “Attorney General Raoul Announces $242 Million Settlement to Benefit State Of Illinois,” October 28, 2019, available at: http:// www.illinoisattorneygeneral.gov/pressroom/2019_10/20191028.html. [FN27] . “United States Files Complaint against Pharmaceutical Company Gilead for Patent Infringement Related to Truvada® and Descovy® For Pre-Exposure Prophylaxis of HIV,” November 7, 2019, available at: https://www.justice.gov/opa/pr/united-states-files-complaint-against-pharmaceutical-company-gilead-patent-infringement. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -23- Produced by Thomson Reuters Accelus Regulatory Intelligence 05-Feb-2020 © 2020 Thomson Reuters. No claim to original U.S. Government Works. -24-