Business Crimes Hotline

DISTRICT OF COLUMBIA

Alpharma Agrees to $42.5 Million Settlement of False Claims Act Allegations

On March 16, 2010, the DOJ announced that U.S.-based pharmaceutical manufacturer Alpharma Inc., now a wholly owned subsidiary of King Pharmaceuticals, Inc, the Bristol, TN-based corporation, has agreed to pay $42.5 million as part of a settlement of alleged False Claims Act violations tied to marketing efforts for Kadian, the company's morphine-based painkiller used to treat long-term moderate to severe pain. The settlement will also resolve a related qui tam whistleblower lawsuit brought against the company in 2006 by Debra Parks.

The False Claims Act allegations, encompassing activities from Jan. 1, 2000 through Dec. 29, 2008, allege that Alpharma used payments to health care providers to induce Kadian's promotion and prescription to prospective patients. Additionally, Alpharma is alleged to have misrepresented both the drug's effectiveness and its safety.

The $42.5 million settlement will be split amongst the federal government, relevant state governments, and Ms. Parks, with the latter's share deducted from the federal portion of the funds. Accordingly, the federal government will receive approximately $28.27 million, the states will receive approximately $8.9 million, and Ms. Parks will receive the remaining $5.33 million.

The DOJ noted that its has used the False Claims Act, which contains provisions enabling private citizens possessing knowledge of suspected fraud against the federal government to initiate a lawsuit on behalf of the United States and thereby split any subsequent recovery, to recover over $3 billion since January 2009. Of that total, roughly $2.2 billion was recovered in cases alleging federal health care program fraud.

DISTRICT OF COLUMBIA

Alpharma Agrees to $42.5 Million Settlement of False Claims Act Allegations

On March 16, 2010, the DOJ announced that U.S.-based pharmaceutical manufacturer Alpharma Inc., now a wholly owned subsidiary of King Pharmaceuticals, Inc, the Bristol, TN-based corporation, has agreed to pay $42.5 million as part of a settlement of alleged False Claims Act violations tied to marketing efforts for Kadian, the company's morphine-based painkiller used to treat long-term moderate to severe pain. The settlement will also resolve a related qui tam whistleblower lawsuit brought against the company in 2006 by Debra Parks.

The False Claims Act allegations, encompassing activities from Jan. 1, 2000 through Dec. 29, 2008, allege that Alpharma used payments to health care providers to induce Kadian's promotion and prescription to prospective patients. Additionally, Alpharma is alleged to have misrepresented both the drug's effectiveness and its safety.

The $42.5 million settlement will be split amongst the federal government, relevant state governments, and Ms. Parks, with the latter's share deducted from the federal portion of the funds. Accordingly, the federal government will receive approximately $28.27 million, the states will receive approximately $8.9 million, and Ms. Parks will receive the remaining $5.33 million.

The DOJ noted that its has used the False Claims Act, which contains provisions enabling private citizens possessing knowledge of suspected fraud against the federal government to initiate a lawsuit on behalf of the United States and thereby split any subsequent recovery, to recover over $3 billion since January 2009. Of that total, roughly $2.2 billion was recovered in cases alleging federal health care program fraud.