Victory Pharma will pay $12.2 million for allegedly paying doctors to write prescriptions for its drugs, Attorney General Roy Cooper announced Feb. 18.
“Tax dollars were wasted on what may have been unnecessary prescriptions,” Cooper said. “This kind of fraud drives up health costs for all of us, and that’s why we’re continuing to crack down on it.”
The settlement resolves allegations that Victory Pharma paid physicians for writing prescriptions for the drugs Naprelan (an anti-inflammatory drug), Xodol (a painkiller), Fexmid (a muscle relaxant) and Dolgic (used to treat tension headaches) for three years beginning in 2007.
Under the agreement, Victory Pharma will pay $12.2 million to states and the federal government to compensate Medicaid, Medicare, and other taxpayer funded health care programs for its illegal conduct. As part of the settlement, North Carolina will receive $293,891.40 in restitution and other recovery.
North Carolina and the other states allege that between Jan. 1, 2007 and Dec. 31, 2009, Victory Pharma sales representatives paid doctors in cash and through gifts such as in-office lunches, dinners, snacks, meals at upscale restaurants, tickets to sporting events, and other forms of entertainment, to induce them to prescribe the company’s drugs. The resulting prescriptions were paid for or reimbursed by Medicaid and other taxpayer-funded health care programs.
This settlement is based on a whistleblower action that was filed in the United States District Court for the Southern District of California under state and federal false claims statutes. Victory Pharma has also entered into a deferred prosecution agreement to resolve the federal government’s concurrent criminal charges.
The North Carolina settlement agreement was reached by Cooper’s Medicaid Investigations Division and the North Carolina Division of Medical Assistance.
The MID investigates fraud and abuse in the Medicaid program by hospitals, doctors, pharmaceutical companies, medical equipment companies, mental health and personal care providers, ambulance services and others, as well as patient abuse and neglect in Medicaidfunded facilities.
Over the past decade, Cooper’s MID has recouped more than $500 million and helped to convict hundreds of individuals on criminal charges. During the federal fiscal year that ended September 30, 2012, the MID won 33 criminal convictions and 14 civil settlements that recovered $94,390,397.85 from Medicaid abusers.