Carol Ostrow Jan. 13, 2015, 11:11am


Daiichi Sankyo, Inc., a pharmaceutical company, has agreed to pay federal and state Medicaid programs more than $39 million over allegations that it used kickbacks to entice physicians into prescribing its medications, the U.S. Department of Justice said on Friday.

The settlement is the result of a whistleblower lawsuit filed by Kathy Fragoules, a former Daiichi employee who alleged the New Jersey-based firm provided entertainment such as dinners and paid speaking engagements to doctors in exchange for their prescribing patients the company's drugs. The medications included Azor, Tribenzor, Welchol and Benicar. 

“The Anti-Kickback Statute prohibits payments intended to influence a physician’s ordering or prescribing decisions,” U.S. Acting Assistant Attorney General Joyce R. Branda said. "Settlements like this one show that the government will continue to pursue health care companies that use kickbacks to promote their products.”

As part of the settlement, Daiichi also will be required to assume internal compliance reforms for the next five years as part of a corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General.

Under the whistleblower provisions of the False Claims Act, private parties can sue on behalf of the United States and receive a portion of any money recovered. In this case, Fragoules will receive $6.1 million of the federal settlement. 

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