BioScrip to Settle False Health Care Claims for $15M

BioScrip has agreed to pay $15 million to resolve allegations under the False Claims Act that they received kickbacks from Novartis in exchange for recommending refills to patients, the Department of Justice announced earlier this week.

Novartis allegedly provided kickbacks to BioScrip, in the form of patient referrals and in the guise of rebates, in exchange for BioScrip recommending refills to its Exjade patients. This Exjade scheme violated the federal anti-kickback statute, which prohibits the offer or payment of remuneration to induce the purchase or recommendation of any drug or service covered by Medicare, Medicaid, or another federal healthcare program.

Novartis markets and manufactures Exjade, an iron chelation drug approved for use by patients who have iron overload resulting from blood transfusions. BioScrip was part of a Novartis created distribution network for Exjade, and through this network, Novartis was able to refer Exjade patients to particular pharmacies within the network. In order to obtain greater numbers of patient referrals and rebates, BioScrip, in coordination with Novartis, implemented a program of calling patients to recommend Exjade refills or to get patients who stopped ordering Exjade refills to resume their orders.

Novartis and BioScrip promoted these calls as part of an effort to offer clinical “counseling” or “education” to Exjade patients while emphasizing the importance of getting refills, but allegedly ignored Exjade’s serious, potentially life-threatening side effects, such as kidney failure and gastrointestinal hemorrhaging.

BioScrip has agreed to pay $11,685,705.43 to the United States, admit numerous facts concerning its relationship with Novartis, and agrees to cooperate with the United States in the prosecution of the claims against Novartis. BioScrip has also agreed to pay $3.31 million to a group of States to settle the States’ claims based on the same alleged conduct.

The lawsuit was originally filed by Oswald Bilotta, a former Novartis sales representative, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Bilotta’s portion of the settlement has not yet been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.