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Tyler Schneider
Tyler Schneider
Attorney •

Benicar Maker Pays $39 Million to Settle Kickback Allegations

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Daiicho Sankyo, the manufacturer of Benicar, has been ordered to pay $39 million in civil damages and penalties to settle alleged violations against the False Claims Act. Various states will share in the $39 million settlement, while the whistleblower, a former company sales rep who alerted the U.S. Department of Justice to Daiicho Sankyo’s illegal activities, will receive $6.1 million under the Act’s Qui Tam provision.

Improper Kickbacks

The company was accused of paying physicians improper kickbacks in the form of speaker fees as part of Daiichi’s Physician Organization and Discussion programs, known as PODs, which were run from Jan. 1, 2005, through March 31, 2011, as well as other speaker programs that were held from Jan. 1, 2004, through Feb. 4, 2011. The promotions were found to cause false claims to be submitted to federal health care programs such as Medicaid, Medicare, and TRICARE.

The Wall Street Journal reported that speaking fees were paid to physicians for speaking only to their own office staff or spouse, and even when participants took turns speaking about duplicative topics at lavish dinners paid for by Daiicho Sankyo. According to the terms of the settlement agreement, Daiichi Sankyo has also agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services Office of the Inspector General to undertake substantial internal compliance reforms over the next five years.

The purpose of the 1986 Anti-Kickback statute was to ensure that physicians’ medical judgment and recommendations would not be influenced or compromised by improper payments and gifts made to health care providers. The statute prohibits anyone from offering, paying, soliciting, or receiving payment to encourage referrals of items or services covered by federal health care programs.

Since 2009, the Justice Department has recovered a total of more than $23.3 billion through False Claims Act cases, with more than $14.9 of that amount recovered in cases involving fraud against federal health care programs.