Pharmaceutical Company and its CEO Pay $47 Million in Kickback Settlement

From the cost of treatment to the price of pharmaceuticals, healthcare in the United States is incredibly expensive. With billions of dollars going through federal programs such as Medicare and Medicaid, unscrupulous manufacturers and providers might be tempted to engage in deception in order to increase their revenue. 

One example is a recent $47 million settlement paid by pharmaceutical company QOL Medical LLC and its CEO, Frederick E. Cooper in response to they violated the False Claims Act (FCA) and related state statutes. QOL makes a prescription drug called Sucraid, which is approved for patients with Congenital Sucrase-Isomaltase Deficiency (CSID), a rare genetic condition that affects a person’s ability to digest table sugar and causes symptoms such as diarrhea and stomach pain.

To boost sales of Sucraid, QOL sent free Carbon-13 breath test kits to healthcare providers, encouraging their use for patients with general gastrointestinal symptoms. Though the company said that the tests could pinpoint whether a person suffered from CSID or not, there are many conditions besides CSID that would cause a positive test result. Nevertheless, many doctors and medical facilities administered the test and prescribed Sucraid if the breath test indicated a problem. 

The FCA prohibits offering kickbacks to induce medical product use or healthcare service referrals. According to the government, supplying free tests to the medical providers constituted an unlawful inducement. Subsequently, claims made under Tricare and other government programs for Sucraid were fraudulent. This legal action was initiated by four former QOL employees who filed a qui tam lawsuit on the government’s behalf against their former company. 

While QOL and Cooper admitted no liability, the $47 million payment resolves the allegations and emphasizes the importance of transparency and ethical conduct in the pharmaceutical industry. Kickbacks and misleading diagnostic claims harm patients and drive up costs for government-funded healthcare programs. Often, it is employees with inside knowledge who are in the best position to identify and report fraud. 

If you suspect fraud or unethical practices in the healthcare sector, the False Claims Act offers a mechanism to report wrongdoing. Whistleblowers can play a vital role in exposing fraud while being eligible for financial rewards. Contact Kardell Law Group if you are aware of kickbacks, deceptive billing or any other misconduct that you have noticed in the course of your work.