Pharmaceutical Firm to Pay $42.5M for False Claims about Pain-Relief Drug

American pharmaceutical manufacturer Alpharma Inc. has agreed to pay $42.5 million to resolve False Claims Act allegations in connection with the marketing of the morphine-based drug Kadian, the Justice Department announced. The settlement resolves allegations that, between Jan. 1, 2000, and Dec. 29, 2008, Alpharma paid health care providers to induce them to promote or prescribe Kadian and made misrepresentations about the safety and efficacy of the drug, which is used to treat chronic moderate to severe pain. Alpharma is now a wholly-owned subsidiary of Bristol, Tenn.-based King Pharmaceuticals Inc.

Under the agreement announced March 16, the proceeds from the settlement will be split between the federal government and various states, with the United States receiving roughly $33.6 million to resolve the federal claims and the states receiving approximately $8.9 million to settle their respective claims.

"Illegal marketing of pharmaceutical drugs jeopardizes the public's confidence in our health care system," said Tony West, assistant attorney general for DOJ's Civil Division. "All consumers have the right to know that their health care provider's judgment about drugs they should take has not been undermined by misinformation or kickbacks from pharmaceutical manufacturers."

The settlement resolves a lawsuit brought by a whistleblower, Debra Parks, in 2006 under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under March 16 civil settlement, Parks will receive $5.33 million out of the federal share of the recovery.

"Health care decisions must be based solely upon what is best for the individual patient and not on which pharmaceutical company is paying the doctor the biggest kickback," said Rod J. Rosenstein, U.S. attorney for the District of Maryland.

West and Rosenstein noted that the settlement is part of the government's emphasis on combating health care fraud and that one of the most powerful tools in that effort is the False Claims Act, which DOJ has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. DOJ's total recoveries in False Claims Act cases since January 2009 have topped $3 billion.

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