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U.S. Settles with Accredo Health, Intervenes Against Novartis

According to the Justice Department, specialty pharmacy, Accredo Health Group, has agreed to pay $60 million to settle allegations that it violated the False Claims Act in connection with a kickback scheme involving the prescription drug Exjade. The government announced that it has intervened in the portion of the case against Novartis Pharmaceuticals Corp. involving the same alleged conduct.

Exjade is a prescription medication used to treat hemosiderosis – a chronic condition caused when a person has too much iron in their blood. The body stores excess iron in the heart and liver, which can cause damage to those organs. According to the Exjade website, it is used to help reduce iron levels in the blood. The main cause of chronic iron overload is receiving multiple blood transfusions. Sickle cell disease is one condition that requires frequent transfusions.

In 2011, a former Novartis area sales manager, David Kester of Raleigh, North Carolina, filed a qui tam action alleging that pharmaceutical giant Novartis engaged in an illegal kickback scheme involving Exjade and other medications. According to the whistleblower’s Complaint, between 2007 and 2012, Novartis provided kickbacks to specialty pharmacies, including Accredo, in the form of patient referrals and cash remuneration styled as “performance rebates” or “performance discounts” in return for recommending that pharmacy customers refill Exjade. In addition, the government claimed that Accredo’s employees knowingly understated the serious and potentially life-threatening side effects of Exjade when promoting the drug to patients. The government alleges that each submission to Medicaid, Medicare, or other government health care program that resulted from the kickback scheme was a violation of the False Claims Act.

The Justice Department announced that Accredo has agreed to settle the False Claims Act allegations. It will pay $45 million to the federal government for the false claims submitted to Medicare and $15 million to the states for the false claims submitted to the states’ various Medicaid programs. The government intervened as to the allegations against Novartis. The trial of those claims is set for November.

The whistleblower will be entitled to a portion of the monies received by the government as his reward under the qui tam provisions of the False Claims Act.

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