Attorney General McKenna announces latest drug company settlement
OLYMPIA – Washington will receive more than $3.2 million in its newest settlement with a drug manufacturer. Washington State Attorney General Rob McKenna today announced an agreement with Forest Pharmaceuticals Inc., resolving claims by the federal government and several states regarding the illegal marketing of three drugs.
“Rules for doing business with Medicaid protect public health and taxpayer dollars,” McKenna said. “These settlement funds, along with the millions netted by our Medicaid fraud team every year, help fill a financial hole created by companies that skirt the rules.”
McKenna added that this year, his Medicaid Fraud Control Unit (MFCU) has recovered over $14.4 million through legal action against drug companies. More than $19 million was recovered in 2009.
The subsidiary of Forest Laboratories, Inc., of New York City, will pay $770,628 in restitution to the state Medicaid program and $847,957 in penalties, deposited into the state’s general fund. The rest, about $1.6 million, is returned to the federal government to cover its share of Medicaid contributions.
On Sept. 15, Forest Pharmaceuticals entered a plea agreement in which the company accepted responsibility for criminal actions relating to the distribution of Levothroid, used to treat hypothyroidism, between August 2001 to 2003. The company also admitted to illegally promoting anti-depression drugs Celexa and Lexapro for pediatric use when they were only approved treating adult depression.
Sales tactics included directing salespeople to promote the pediatric use of Celexa in calls to physicians who treat minors, and hiring speakers to talk to pediatric specialists about the benefits of prescribing it to children and teens. The federal government also alleges that the drug company publicized one study showing that Celexa worked for adults, while downplaying less favorable results concerning the product’s effectiveness for treating depression in teens.
The government also alleges that Forest engaged in such marketing conduct in connection with Lexapro, which lacked any approvals for pediatric use at that time. The government alleged that illegal sales tactics for both drugs also included kickbacks – cash payments disguised as grants or consulting fees, expensive meals and lavish entertainment – to induce physicians to prescribe the drugs.
The drug company agreed to settle pending allegations that it caused false claims to be submitted to federal health care programs for the drugs Levothroid, Celexa and Lexapro.
As part of the civil settlement, more than $88 million will be distributed to the federal government and more than $60 million will be distributed to and shared by the states. Settlement payments are calculated based on how much taxpayer money was spent on drugs in states during the time that a drug was improperly marketed.
The cases resolved by the civil settlement are United States ex rel. Christopher R. Gobble, et al. v. Forest Laboratories, Inc. & Forest Pharmaceuticals, Inc.; United States ex rel. Joseph Piacentile, et al. v. Forest Laboratories, Inc.; and United States ex rel. Constance Conradv. Forest Pharmaceuticals, Inc., et al.
This matter was handled by the U.S. Attorney’s Office for the District of Massachusetts and the Civil Division of the Department of Justice. Assistance was also provided by the National Association of Medicaid Fraud Control Units and the offices of various state Attorneys General.
U.S. Department of Justice News Release (details civil and criminal charges)
Janelle Guthrie, AGO Communications Director, (360) 586-0725