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Pharmaceutical manufacturer settles kickback charges with 49 states, D.C.

Handshake-whiteDaiichi Sankyo has reached a settlement with 49 states and the District of Columbia resolving charges that it violated federal law by using lavish meals and speaker programs to induce physicians to prescribe the drugs Azor, Benicar, Tribenzor, and Welchol.

Under the agreement, Daiichi, a global drug company, agreed to pay $39 million to the United States and state Medicaid programs, $10 million dollars to state Medicaid programs, and $19 million to other federal programs.

New York state, which led the litigation, will receive just over $2.3 million as part of the deal. The settlement covers every state except for Arizona.

“A physician’s decision concerning what drugs to prescribe should be based on what is best for the patient, not what perks they may get from a drug company,” New York Attorney General Eric Schneiderman said.

The settlement resolves charges that Daiichi caused false claims to be submitted to the Medicaid program – and other federal programs – for Azor, Benicar, Tribenzor, and Welchol. The claims were false because Daiichi provided kickbacks to prescribing physicians.

The agreement alleges that the kickbacks were provided from January 1, 2004 through February 4, 2011.

It also alleges that some physicians spoke only to his or her office staff; the audience sometimes included the physician’s spouse; payments were made to physicians even when participants took turns “speaking” about duplicative topics at dinners paid for by the drug maker; and the dinners were lavish and, sometimes, exceeded internal Daiichi cost limitations of $140 a person.

The settlement stems from a complaint filed by whistleblower, Kathy Fragoules, a former Daiichi sales representative, Schneiderman said.

Azor, Benicar, and Tribenzor are used to treat high blood pressure, and Welchol is a cholesterol treatment.

Copyright 2015, Rita R. Robison, Consumer Specialist

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