Lawyers for Dallas-based Baron & Budd and Austin-based Slack Davis worked with federal prosecutors to force Sanofi-Aventis U.S. to pay $11.85 million to settle litigation charging the pharmaceutical company with violating the federal False Claims Act by paying kickbacks to Medicare patients though a nonprofit patient assistance program.
Lawsuits filed by the law firms – and later supported by the U.S. Justice Department – accuse Sanofi of selling a multiple sclerosis drug called Lemtrada to Medicare recipients for nearly $100,000 per patient per year.
The settlement agreement, which was announced Friday, was the result of a whistleblower complaint that initially exposed the scheme.
The lawsuits alleged that Sanofi, which is a French-owned company with its U.S. headquarters in New Jersey, made illegal payments to a non-profit entity called The Assistance Fund, which covered the copay patients needed to get Lemtrada.
“Sanofi used the charity as a conduit to funnel money to patients taking Sanofi’s very expensive drug, all at the expense of the Medicare program,” according to a statement released by federal prosecutors.
The lawsuits claim that Sanofi sought to undermine the Medicare program through its use of kickbacks disguised as routine charitable donations aimed at helping patients battling multiple sclerosis and who struggled to afford costly copays.
“Sanofi rigged the system so those taking its drug Lemtrada gained an unfair advantage over patients using other medications, and with today’s settlement, they are finally being held accountable for their actions,” according to a Justice Department statement.
Baron & Budd partner Scott Simmer said that this litigation and settlement is “proof that whistleblowers are essential in fighting fraud against the government and taxpayers.”
“These drug companies need to be held accountable for wasting taxpayer dollars and defrauding government programs under the guise of a charitable organization,” Simmer said.
John Davis, a partner at Slack Davis Sanger in Austin said that the $11.85 million settlement “sends a strong deterrence message against fraudulently driving up government program spending and illegally steering those taxpayer dollars to corporate profit ledgers.
“The case is also a reminder of the important role that whistleblowers play in policing government programs; when civic-minded individuals come forward with credible evidence of fraud, everyone benefits except the wrongdoer,” Davis added.