Pharmaceutical company QOL Medical LLC and its CEO, Frederick E. Cooper, have agreed to pay $47 million to resolve allegations of submitting false claims to federal health care programs. These claims were reportedly induced by offering kickbacks in the form of free Carbon-13 breath testing services for their drug Sucraid.
Sucraid is an FDA-approved treatment for Congenital Sucrase-Isomaltase Deficiency (CSID), a condition affecting digestion of sucrose. Beginning in 2018, QOL distributed free Carbon-13 breath test kits to healthcare providers, claiming they could "rule in or rule out" CSID. However, this test does not specifically diagnose CSID as other conditions can result in similar test outcomes.
QOL's marketing strategy involved analyzing these tests and sharing results with their sales force to target providers whose patients had positive results. Sales representatives were instructed to promote Sucraid based on these findings. Some representatives also claimed the tests definitively diagnosed CSID without scientific backing.
As part of the settlement, QOL and Cooper admitted responsibility for certain facts underlying the agreement. Principal Deputy Assistant Attorney General Brian M. Boynton stated that “participants in the federal healthcare system...may not offer improper inducements to generate business.”
Acting U.S. Attorney Joshua S. Levy highlighted that “QOL provided free goods to doctors and patients in order to induce prescriptions for the very expensive drug.” Special Agent Roberto Coviello emphasized that “kickback arrangements can compromise medical decisions.”
The Defense Criminal Investigative Service's Patrick J. Hegarty noted that this settlement underscores their commitment to protecting programs like TRICARE from fraudulent activities.
The allegations originated from a whistleblower case filed by former QOL employees under the False Claims Act, which allows private parties to sue for fraud on behalf of the United States and share in any recovery. Approximately $43.6 million will be recovered federally, with $3.4 million allocated for State Medicaid programs.
Trial Attorneys Emily Bussigel and Paige Ammons along with Assistant U.S. Attorneys Brian LaMacchia and Lindsey Ross managed this matter on behalf of the Justice Department’s Civil Division.
It is important to note that except for admitted facts by QOL and Cooper, all resolved claims are allegations only with no determination of liability made.