Healthcare Business News

$11.4 million settlement in pharma kickback case

By Beth Kutscher
Posted: December 27, 2012 - 6:45 pm ET

Victory Pharma, San Diego, which sold all of its assets last year, has entered into an $11.4 million settlement with the U.S. Justice Department to resolve allegations that it used pricey trips, tickets and dinners to entice physicians to prescribe its products.

The Justice Department has made fraud and abuse a key area of focus under the Obama administration, collecting more than $4.9 billion in the fiscal year ended Sept. 30. The Victory Pharma agreement comes on the heels of two high-dollar settlements. Last week, biotech giant Amgen agreed to pay $762 million over its marketing of the anemia drug Aranesp, and drugmaker Sanofi US agreed to pay $109 million to resolve anti-kickback allegations relating to its marketing practices.

Victory Pharma no longer does business after selling its nine marketed products in July 2011 to Shionogi & Co., based in Osaka, Japan.

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Under a deferred-prosecution agreement, the company will pay $1.4 million to settle allegations that it violated the Anti-Kickback Statute and $9.9 million for allegations relating to the False Claims Act, according to a Justice Department news release.

The Justice Department said Victory sales reps courted doctors with tickets to sporting events, concerts and plays; spa outings, golf games and ski trips; and dinners at expensive restaurants. The company also had its reps schedule paid “preceptorships,” where they shadowed doctors in their offices in an attempt to boost prescribing of Victory products, according to the agency.

The marketed drugs included pain medications Naprelan, Xodol, Fexmid and Dolgic.

Former sales rep Chad Miller filed the whistle-blower case in San Diego; he will receive $1.7 million under the agreement.

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