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Forest Labs whistleblower collects $7.8 million for ‘speaker fees’ settlement

The DOJ Thursday settled a case with a pharma company accused of paying doctors illegal speaking fees.

The settlement resolves allegations filed in Milwaukee federal court by a w former pharmaceutical sales rep at Forest Laboratories LLC, located in New York.

Kurt Kroenig will receive $7.8 million as part of the settlement.

Forest Labs settled the allegations for $38 million. The federal government will receive $35.5 million and state Medicaid programs will receive $2.5 million. 

The Medicaid program is funded jointly by the state and federal governments.

Kroenig filed a lawsuit under the qui tam or whistleblower provisions of the False Claims Act. It allows private individuals to sue on behalf of the government for false claims and to share in any recovery.

Forest Labs and and a subsidiary paid speaking fees to doctors of $500 to $2,500.

The DOJ said some doctors were paid when the speaking events didn't happen or no licensed health professionals attended.

Sometimes the same attendees attended multiple programs over a short period of time, the DOJ said, or when the meals associated with the programs exceeded Forest’s internal cost limitations.

The fees were paid for speaker programs between 2008 and 2011.

The payments violated the federal anti-kickback law because they were allegedly paid to increase perscriptions of three drugs -- Bystolic, a blood pressure medicine, Savella, used for fibromyalgia, and Namenda, to treat dementia.

Forest Labs denies any wrongdoing in the settlement announced Dec. 15.

Nola Hitchcock Cross is the attorney for the whistleblower, Kurt Kroening.
"The allegations are that the company was essentially paying doctors related to the amount of their prescriptions under the guise of paying them for speaking, which is normally referred to in the health care fraud arena as 'pay to play,'" Cross said.

The DOJ said the claims resolved by the settlement were allegations only and there has been no determination of liability.

The case was United States ex rel. Kroening v. Forest Pharmaceuticals, Inc., et al.


Richard L. Cassin is the publisher and editor of the FCPA Blog.