WASHINGTON (Legal Newsline) — The Department of Justice announced Jan. 11 that Shire Pharmaceuticals will pay $350 million after allegedly committing federal and state False Claims Act violations by employing kickbacks to induce physicians to use their product.
“This settlement represents the largest False Claims Act recovery by the United States in a kickback case involving a medical device,” said principal deputy assistant attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Kickbacks by suppliers of health care goods and services cast a pall over the integrity of our health care system. Patients deserve the unfettered, independent judgment of their health care professionals.”
According to the department, Shire has a product called “Dermograft,” an FDA approved bio-engineered human skin substitute for treating diabetic foot ulcers. Shire’s Dermograft sales staff purportedly used unlawful methods to convince physicians to use the product on patients. These salespeople, according to the department, induced physicians and clinics via lavish dinners, drinks, entertainment and travel; medical equipment and supplies; and cash, credits and rebates.
“Flagrant and systemic kickback activity of the type at issue in this case is designed to impair and undermine a physician’s independent medical judgment, and will not be tolerated,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.