On Sept. 22, the U.S. Department of Justice announced that drug manufacturer, Aegerion Pharmaceuticals Inc., a subsidiary of Novelion Therapeutics Inc., has agreed to plead guilty to criminal charges and pay a multi-million settlement of to resolve allegations of civil false claims.
The Criminal Charges
The criminal charges against Aegerion state that the manufacturer introduced the prescription drug, Juxtapid, into interstate commerce when it was misbranded under the Federal Food, Drug, and Cosmetic Act (FDCA). Juxtapid was approved by the U.S. Food and Drug Administration (FDA) to treat patients suffering from a rare disorder, homozygous familial hypercholesterolemia (HoFH). This condition prevents the body from removing LDL-C, the “bad” cholesterol, from the blood and causes high levels of LDL-C in the body. The drug carried a black box warning for potential liver toxicity and gastrointestinal side effects.
Based on a Risk Evaluation and Mitigation Strategy (REMS) that Aegerion was required to follow, the drug maker was supposed to educate physicians on the serious risks of using Juxtapid, including liver damage, and to tell physicians to only prescribe it to patients who had a diagnosis consistent with HoFH. Allegedly, Aegerion failed to give health care providers accurate and complete information about the disorder and how to properly diagnose it. The company distributed the drug not only for the treatment of HoFH, but also for high cholesterol in general. The company also filed misleading REMS assessment reports.
Aegerion has agreed to plead guilty to these charges and pay a criminal fine and forfeiture of $7.2 million.
Additional Criminal Charges
Aegerion and prosecutors have agreed to deferred prosecution of a felony charge based on Aegerion conspiring to gain patients’ personally identifiable health information without their authorization for commercial gain. This is a violation of the Health Insurance Portability and Accountability Act (HIPAA). Based on the deferred prosecution, Aegerion’s guilty plea will not be entered into the court. Instead, the company is required to implement enhanced compliance with the law. If Aegerion adheres to the terms of the agreement, it can avoid an additional conviction.
The Civil Claims
Based on Aegerion’s criminal conduct, the company caused false claims to be made to government health care programs, including Medicare, Medicaid, and TRICARE, for three years. The drug manufacturer made false and misleading statements to health care providers to led physicians to prescribe the drug to individuals who did not have HoFH. They also caused altered or falsified statements of medical necessity and prior authorizations to be submitted to the federal health care programs. Additionally, the government alleges that Aegerion defrayed patients’ copayments for Juxtapid by funneling funds through Patient Services Inc., which violated the Anti-Kickback Statute. Patient Services Inc. claimed to be a non-profit patient assistance organization.
In regard to the civil claims, Aegerion has entered into a civil consent decree to resolve its civil liability under the FDCA and its failure to adhere to the REMS program. It has also entered into a Corporate Integrity Agreement (CIA), which requires it to implement protocols over the next five years that ensure the company’s promotional activities comply with the law. It will pay $28.8 million over the next three years to resolve the federal and state civil claims. The federal government will receive $26.1 million and the state will receive $2.7 million.
This civil case arose through a qui tam lawsuit filed by three former employees of Aegerion. Together they will receive a total of $4.7 million from the federal proceeds for their participation as whistleblowers.
Do You Have Information About Health Care Fraud?
If you work for a business within the medical industry and you have private information regarding fraud, contact the experienced California qui tam lawyers of Brod Law Firm at (800) 427-7020 to schedule a free consultation today.
(image courtesy of Andres de Armas)