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Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

FOR IMMEDIATE RELEASE
Thursday, May 5, 2022

Two USAO-EDPA Civil Healthcare Fraud Investigative Teams Honored by HHS-OIG

PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that two separate investigative teams working in the Civil Division of the United States Attorney’s Office for the Eastern District of Pennsylvania were honored for their exemplary service to the U.S. Department of Health and Human Services (HHS) by recovering millions of dollars in healthcare fraud matters.

The first team, comprised of Assistant U.S. Attorneys Anthony Scicchitano, Landon Y. Jones III, and Rebecca Melley, received the 2022 Department of Health and Human Services Office of the Inspector General (“HHS-OIG”) Award for “Excellence in Promoting Quality, Safety, and Value” for their investigation and resolution with several companies concerning alleged generic drug price fixing.

The second team, comprised of Assistant U.S. Attorneys Deborah Frey, Matt Howatt, Civil Division Chief Gregory David, Auditor Dawn Wiggins, Investigator Frank O’Connor, and former Assistant U.S. Attorney John Crutchlow, received a 2022 HHS-OIG Honor Award for “Advancing Excellence and Innovation in recognition of outstanding teamwork and excellence for investigations, recoveries, and cost savings identified through P-Stim investigations.” 

Generic Drug Price Fixing Investigations

This family of investigations into generic drug prix fixing led to three generic pharmaceutical manufacturers, Taro Pharmaceuticals USA, Inc., Sandoz Inc., and Apotex Corporation, paying a total of $447.2 million to resolve alleged violations of the False Claims Act (“FCA”) arising from conspiracies to fix the price of various generic drugs. These conspiracies allegedly resulted in higher drug prices for federal health care programs and beneficiaries. 

Between 2013 and 2015, all three companies allegedly paid and received compensation prohibited by the Anti-Kickback Statute through arrangements on price, supply, and allocation of customers with other pharmaceutical manufacturers for certain generic drugs manufactured by the companies. Taro Pharmaceuticals USA, Inc., headquartered in New York, paid $213.2 million to the government to settle these claims. The Taro drugs allegedly implicated in this scheme address a wide variety of health conditions, and include etodolac, a nonsteroidal anti-inflammatory drug used to treat pain and arthritis, and nystatin-triamcinolone cream and ointment, a combination of an antifungal medicine and steroid used to treat certain kinds of skin infections.  Sandoz Inc., headquartered in New Jersey, paid a settlement of $185 million. The Sandoz drugs at issue include benazepril HCTZ, used to treat hypertension, and clobetasol, a corticosteroid used to treat skin conditions.  Apotex Corporation, headquartered in Florida, paid a $49 million settlement in connection with its sale of pravastatin, a drug used to treat high cholesterol and triglyceride levels. 

P-Stim Investigations

Through a proactive data analysis, this team helped uncover a scheme of improper billings involving electro-acupuncture devices, branded among other names as P-Stim and Stivax. These devices are applied with an adhesive and insertion of a limited number of needles; they do not involve surgery, anesthesia, or take place in an operating room. Federal healthcare programs do not reimburse at all for them, but the devices were marketed and billed as reimbursable as surgically implanted neuro-stimulators. This team led the national Department of Justice effort to apply analytics to healthcare claims data to identify providers who inappropriately billed federal healthcare programs for P-Stim devices, and to investigate and hold accountable responsible marketers and distributors. This effort resulted in several resolutions with responsible parties and coordination with dozens of other U.S. Attorney’s Offices as to other provider investigations for a total recovery of over $25 million. 

“Proactive efforts, relationship-building with other DOJ components and government agencies, and data analytics were the foundation for the excellent results of these two investigative teams,” said U.S. Attorney Williams. “We thank the Inspector General for recognizing their work and we thank the HHS OIG case agents who made these results possible.”

“Congratulations and thank you to our partners at the U.S. Attorney’s Office for the Eastern District of Pennsylvania,” said Maureen R. Dixon, Special Agent in Charge, Office of the Inspector General, U.S. Department of Health and Human Services. “These awards recognize the outstanding teamwork and support provided by the DOJ-EDPA Civil Division’s attorneys, support staff, and analysts which resulted in the recovery of millions of dollars in HHS health care funds. HHS-OIG looks forward to continued collaboration with our Civil Division partners, as we work together, to protect the integrity of the Medicare and Medicaid programs from financial harm.”

Contact: 
UNITED STATES ATTORNEY’S OFFICE EASTERN DISTRICT OF PENNSYLVANIA 615 Chestnut Street, Suite 1250 Philadelphia, PA 19106 JENNIFER CRANDALL Media Contact 215-861-8300 If you have not done so already, follow @USAO_EDPA and @USAttyWilliams on Twitter to get the most up-to-date information about big cases and community news.
Updated May 5, 2022