Kaleo Inc. Agrees to Pay $ 12.7 Million to Resolve Allegations of False Claims for Anti-Overdose Drug | Takeover bid

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Kaleo Inc., a Virginia-based pharmaceutical manufacturer, has agreed to pay the United States $ 12.7 million to resolve allegations that Kaleo caused false claims to be made for the drug Evzio, an injectable form of naloxone hydrochloride indicated for reversing opioid overdoses. Evzio was the most expensive version of naloxone on the market, and insurers frequently required the submission of pre-authorization applications before approving Evzio coverage.

The United States has alleged that between March 14, 2017 and April 30, 2020, kaleo ordered prescribing physicians to send prescriptions for Evzio to certain preferred pharmacies who in turn (1) submitted bogus claims for ‘pre-authorization for Evzio who misrepresented to insurers that the prescriber physicians submitted the request when pharmacies did and / or contained false or misleading claims about patients’ medical history, such as misrepresentation that patients had previously tried and failed cheaper alternatives to Evzio, and (2) issued Evzio without collecting or attempting to collect co-payment obligations from government beneficiaries. The United States claims that Kaleo was aware of or deliberately ignored this pharmacy fault, but continued to direct business to these pharmacies nonetheless. The United States also alleged that kaleo provided illegal remuneration to prescribing physicians and their office staff in violation of the Anti-Kickback Statute to induce and reward their prescription of Evzio.

“True and accurate documentation is essential to the integrity of federal health care programs,” said Acting Assistant Attorney General Brian M. Boynton of the Civil Division of the Department of Justice. “Today’s regulations demonstrate that the ministry will hold those who undermine these programs to account by ensuring that false statements are brought before the government. “

“When a pharmaceutical manufacturer knowingly engages with bad actors, it hurts the federal health care system – and it can expect us to see it,” Acting US Attorney Nathaniel R. Mendell said for the District of Massachusetts. “Today’s regulations are our final signal to pharmaceutical manufacturers that my office does not tolerate healthcare fraud and will continue to enforce the law.”

“The American people, as taxpayers and consumers alike, expect drug companies like Kaleo to comply with applicable laws and regulations,” said Special Agent in Charge Phillip M. Coyne of the US Department of Health and social services, Office of the Inspector General (HHS BIG). “When a pharmaceutical company engages in fraud with the aim of increasing profits, it erodes public confidence in the healthcare system, can compromise the patient-physician relationship and wastes valuable funds from the healthcare program. government. We will continue to investigate allegations of fraud in close cooperation with our law enforcement partners. “

“Today’s settlement resolves allegations that Kaleo used giveaways to induce and reward suppliers for prescribing the company’s expensive anti-overdose drug, while turning a blind eye to fraudulent drugstore practices that deflected taxpayer funded health care programs – programs we all pay for and depend on, ”said Special Agent in Charge Joseph R. Bonavolonta of the FBI Division in Boston. “These unsavory tactics only fuel the commitment of the FBI and our law enforcement partners to aggressively root out those who seek to increase their bottom line at the expense of hard-working taxpayers.”

“Misrepresentation undermines the integrity of the federal employee health benefits program,” said acting Assistant Inspector General Norbert E. Vint of the US Bureau of Personnel Management, Bureau of the Inspector General (OPM OIG). “The OPM OIG is committed to protecting federal health care programs from deceptive schemes that increase the cost of medical care and waste taxpayer dollars. “

“The protection of TRICARE, the health system of the military and their dependents, is a top priority for the Office of the Inspector General of the Defense Criminal Investigation Service (DCIS) of the Ministry of Defense”, said Special Agent in Charge Patrick J. Hegarty of DCIS, North East. Field office. “When companies submit fake authorizations for high-priced medical goods and services, they undermine the integrity of TRICARE and place an unnecessary financial burden on the program. The settlement agreement announced today is the result of a joint effort and demonstrates DCIS’s continued commitment to work with our law enforcement partners to investigate healthcare fraud.

The Civil Settlement includes the resolution of claims filed under the qui tam or whistleblower provisions of the False Claims Act by Rebecca Socol, a former kaleo employee. Under these provisions, a private party can sue on behalf of the United States and receive a portion of any recovery. As part of the resolution with Kaleo, Ms. Socol will receive $ 2,548,600 of the settlement amount. The qui tam case is captioned United States ex rel. Socol v. Kaleo, Inc., 18-cv010050-RGS (D. Mass.) (Under seal).

The resolution obtained in this case is the result of a coordinated effort between the Civil Division of the Department of Justice, the Commercial Litigation Branch, the Fraud Section and the United States Attorney’s Office for the District of Massachusetts, with assistance from HHS OIG; DCIS; OPM BIG; the FBI; and the Office of the Inspector General of United States Postal Services.

The investigation and resolution of this case illustrates the government’s focus on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Advice and complaints from all sources regarding potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The case was handled by trial lawyer Sarah Arni and assistant US attorneys David Derusha and Abraham George.

The claims resolved by the settlement are only allegations and there has been no determination of liability.

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