astellas pharma US, Inc. to pay $7.3 million to resolve false claims act allegations
PHILADELPHIA – Pharmaceutical company Astellas Pharma US, Inc., will pay $7.3 million to resolve allegations that it violated the False Claims Act in connection with its marketing and promoting of the drug Mycamine for pediatric use. The settlement was announced today by United States Attorney Zane David Memeger and the Justice Department. Astellas Pharma US, Inc., located in Northbrook, Illinois, manufactures and sells pharmaceutical drugs, including Mycamine.
The settlement resolves allegations that, between 2005 and 2010, Astellas knowingly marketed and promoted the sale of Mycamine for pediatric use, which was not a medically accepted indication and, therefore, not covered by federal health care programs. During this time period, the FDA approved Mycamine to treat adult patients suffering from serious and invasive infections caused by the fungus Candida, including infections in the esophagus, the blood and the abdomen, and to prevent Candida infections in adults undergoing stem cell transplants. From 2005 until June 2013, however, Mycamine was not approved to treat pediatric patients for any use.
“The settlement in this case further demonstrates our commitment to hold responsible any pharmaceutical company that disregards the FDA drug approval process and promotes drugs for uses before they have been deemed safe and effective,” said U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger. “It’s a message that should resonate with all drug companies: there are consequences for violating the False Claims Act and putting profit ahead of government safeguards.”
“The FDA’s drug approval process requires companies to demonstrate the safety and efficacy of their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department will hold accountable pharmaceutical companies that skirt these rules and seek to bill federal health care programs for uses of drugs that are not reimbursable.”
As a result of today’s $7.3 million settlement, the federal government will receive $4.2 million, and state Medicaid programs will receive $3.1 million.
“Pharmaceutical companies that ignore rules designed to protect patients – in this case, children – will be held accountable,” said Nick DiGiulio, Special Agent in Charge for the United States Department of Health and Human Services in Philadelphia. “We will continue to work with the Department of Justice to root out all forms of waste, fraud and abuse in our federal health care programs.”
The allegations resolved by the settlement arose from a lawsuit filed by Frank Smith, a former Astellas sales representative, under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. Smith will receive $708,852.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.
For the Eastern District of Pennsylvania, the settlement in this case was handled by Assistant United States Attorney Susan Becker.
This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Civil Division of the Department of Justice and the Offices of the Inspectors General of the Department of Health and Human Services and Office of Personnel Management. The lawsuit is captioned United States ex rel. Smith v. Astellas Pharma US, Inc. et al., No. 10-999 (E.D. Pa.).
The claims resolved by the settlement are allegations only; there has been no determination of liability.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525