U.S. pharmaceutical company to pay $15.4 million following illegal kickback scheme

Mallinckrodt ARD LLC, an American pharmaceutical company formerly known as Questcor Pharmaceuticals Inc., has agreed to pay $15.4 million following claims that, as Questcor, the company paid illegal kickbacks to doctors.

These kickbacks came in the form of “lavish dinner and entertainment” between 2009-2013. This was done to persuade doctors to prescribe the company’s drug, H.P. Acthar Gel (Acthar), to patients.

In other words, the company “wined and dined” doctors to influence Medicare prescriptions and turn a profit.

“The Department of Justice will hold companies accountable for the payment of illegal kickbacks in any form,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Improper inducements have no place in our federal healthcare system, which depends on physicians making decisions based on the healthcare needs of their patients and not on or influenced by personal financial considerations.”

According to the U.S. Department of Justice, during the four-year period, twelve Questcor sales representatives in charge of marketing the drug provided “illegal remuneration to health care providers in the form of lavish meals and entertainment expenses.” This remuneration was done to induce Acthar Medicare referrals from health care providers, which violated the U.S. Anti-Kickback Statute and the submission of false claims to Medicare.

“When companies buy off doctors, patients suffer,” said U.S. Attorney McSwain. My Office is committed to rooting out this type of behavior and the Anti-Kickback Statute is a critical tool in that fight. We will continue to protect the integrity of our healthcare system by holding drug companies accountable for their conduct.”

The company’s illegal activities were only picked up thanks to a whistleblower who will be receiving $2.9 million of the settlement, reports the DOJ.

“Paying kickbacks to win business, as contended in this case, cheats taxpayers and the patients who rely on government health care programs for essential care,” said Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue working with our law enforcement partners to hold accountable entities paying such kickbacks.”