A former president at Warner Chilcott was arrested on Oct. 29 and charged in a criminal kickbacks conspiracy. In addition, the drugmaker agreed to pay $125 million as part of a False Claims Act (FCA) settlement and felony charge of health care fraud W. Carl Reichel, president of Warner Chilcott PLC’s pharmaceuticals division from 2009 to 2011, was charged with conspiring to pay kickbacks to physicians. The indictment is seen as vindication of the Justice Department’s much-publicized promise to hold executives accountable for company wrongdoing. It appears the DOJ wasn’t bluffing. Carmen Ortiz, the U.S. attorney for Massachusetts, said in a statement:
Today’s enforcement actions demonstrate that the government will seek not only to hold companies accountable but will identify and charge corporate officials responsible for the fraud.
The DOJ also said that a Warner Chilcott subsidiary will pay $102 million to resolve FCA allegations brought by whistleblowers and a $23 million criminal fine after pleading guilty to a felony health care fraud charge. Warner Chilcott was purchased in 2013 by Actavis PLC, which is now Allergan PLC.
In addition, four other individuals are facing criminal punishment as part of an illegal marketing scheme involving numerous prescription drugs. They include two former district managers who have pled guilty to health care fraud and violations of the Health Insurance Portability and Accountability Act. A third district manager has also been charged with HIPAA violations, and a doctor has been charged with accepting kickbacks in exchange for prescribing Warner Chilcott’s osteoporosis drugs.
The announcement of the arrest described sweeping criminal misconduct at Warner Chilcott from 2009 to 2013, including sham medical education events designed by management as cover for supplying physicians with expensive freebies. Company management, according to the government, directed a scheme in which money and lavish meals were given to doctors, especially high-prescribing doctors who received kickbacks disguised as speaking fees. I could write a book about what all this company was doing and it would be a best seller. If you want the full story, contact Andrew Brashier at 800-898-2034 or by email at Andrew.Brashier@beasleyallen.com.
Two former Warner Chilcott sales representatives who brought the case in 2011 will share a $23 million reward for their efforts. The whistleblowers are represented by W. Scott Simmer and Thomas J. Poulin of Simmer Law Group PLLC, Stephen A. Weiss of Seeger Weiss LLP and Steven F. Molo of MoloLamken LLP. The U.S. is represented by Sonya A. Rao, Susan Poswistilo and Colin Huntley of the U.S. Department of Justice and Robert K. DeConti of the Office of Inspector General at the U.S. Department of Health and Human Services.