Veloxis Pharmaceuticals, Inc. (“Veloxis”) recently agreed to pay more than $46 million to resolve criminal and civil allegations that it paid kickbacks to health care professionals to encourage prescriptions and sales of a brand-name immunosuppression drug to kidney transplant recipients instead of a generic drug.
What makes this settlement noteworthy is that it includes a civil penalty of $1.55 million to address claims that Veloxis knowingly failed to report to the Centers for Medicare and Medicaid Services payments to health care professionals (“HCPs”) under the federal Open Payments Program (also known as the Physician Payments Sunshine Act or “Sunshine Act”). This civil penalty is the largest penalty ever imposed under the Sunshine Act.
In the settlement, the Department of Justice (“DOJ”) alleged that Veloxis violated the criminal Anti-Kickback Statute through lavish meals, “large quantities” of “expensive alcohol,” gifts, flights, and hotel stays at luxury resorts for HCPs in exchange for the HCPs recommending or prescribing Envarsus XR, a drug used to prevent organ rejection in patients who have received a kidney transplant. The recipients of these purported kickbacks includ...