ISTA Settles Healthcare Fraud Claims for $33.5M; Whistleblower to get $2.5M
ISTA Pharmaceuticals has pleaded guilty to federal felony charges of conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the Federal Anti-Kickback Statute, the U.S. Department of Justice announced last week. In addition to criminal fines and asset forfeiture, ISTA has also entered into a civil settlement for knowingly submitting or causing the submission of false claims to federal health care programs.
Under the Food, Drug and Cosmetic Act (FDCA), it is illegal for a drug company to introduce into interstate commerce any drug that the company intends will be used for purposes not approved by the Food and Drug Administration (FDA). Xibrom is approved by the FDA to treat pain and inflammation following cataract surgery; however, some ISTA employees promoted Xibrom for unapproved new uses, including the use of Xibrom following Lasik and glaucoma surgeries, and for the treatment and prevention of cystoid macular edema. Some ISTA employees were told by management not to write down certain interactions with physicians regarding unapproved new uses, and not to leave certain printed materials in physicians' offices relating to unapproved new uses, in order to avoid detection.
ISTA also pled guilty to a conspiracy to knowingly and willfully offer or pay remuneration to physicians to induce those physicians to prescribe Xibrom, in violation of the federal Anti-Kickback Statute. Certain ISTA employees provided physicians with free Vitrase, another ISTA product, with the intent to induce such physicians to refer individuals to pharmacies for Xibrom. ISTA also provided other illegal remuneration, including sponsoring an event for a non-profit group associated with a particular physician, a golf outing, a wine-tasting event, paid consulting or speaker arrangements, and honoraria for participation in advisory meetings which were intended to be marketing opportunities. ISTA agreed to pay $18 million to the federal government under the terms of its plea agreement.
ISTA also agreed to pay $15 million to resolve civil allegations regarding its marketing of Xibrom, which caused false claims to be submitted to government health care programs. The United States alleged that ISTA's violations of the Anti-Kickback Statute resulted in false claims being submitted to federal health care programs.
In addition to the above, ISTA’s parent company, Bausch+Lomb (B+L), has also agreed to enter into a corporate integrity agreement to prevent future violations.
The lawsuit was originally filed by two whistleblowers under the False Claims Act. One of the whistleblowers, Keith Schenkel, was a former employee of ISTA. The False Claims Act allows private citizens with knowledge of fraud to sue on behalf of the government and share in the recovery. Schenkel will receive $2.5 million as his share of the civil settlement.
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.