June 13, 2019

DOJ Intervenes in Foundation Kickback Case

The DOJ intervened in two qui tam suits alleging that Mallinckrodt Pharmaceuticals used a charitable foundation to pay kickbacks in connection with one its drugs.  DOJ claims that Mallinckrodt and a company it acquired in 2014, Questcor, used a foundation as a conduit to pay illegal kickbacks in the form of copay subsidies, as the company marketed the drug as “free” to doctors and patients while steeply increasing its price.  This case follows other recent FCA suits against pharmaceutical manufacturers alleging kickbacks involving patient assistance programs and other charities (reported in previous issues of HLBytes). The company pushed back  on the allegations, arguing that the charity operated in compliance with an OIG advisory opinion. Separately, Mallinckrodt agreed this week to pay $15.4 million to settle allegations involving the sales and marketing activities of Questcor.