Florida Participates in Largest Healthcare Fraud Settlement in U.S. History

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

GlaxoSmithKline (GSK), a prescription drug manufacturer, has agreed to pay $3 billion in fines to resolve healthcare fraud allegations in what has become largest healthcare fraud settlement in U.S. history. The settlement was announced by federal prosecutors on July 1, 2012, and in a press release from the Florida Attorney General on July 2, 2012.

Florida to Receive $56 Million In Settlement.

Florida will receive more than $56 million as part of the settlement with GSK. Florida Attorney General, Pam Bondi, announced the state's participation in the settlement on July 2, 2012.

Settlement Resolves List of Allegations Related to Healthcare Fraud.

The settlement resolves allegations that GSK:

• Marketed the depression drug Paxil for off-label uses, such as use by children and adolescents; 
• Marketed the depression drug Wellbutrin for off-label uses, such as for weight loss and treatment of sexual dysfunction, and at higher-than-approved dosages; 
• Marketed the asthma drug Advair for off-label uses, including first-line use for asthma;
• Marketed the seizure medication Lamictal for off-label uses, including bipolar depression, neuropathic pain, and various other psychiatric conditions; 
• Marketed the nausea drug Zofran for off-label uses, including pregnancy-related nausea; 
• Made false representations regarding the safety and efficacy of Paxil, Wellbutrin, Advair, Lamictal, Zofran, and the diabetes drug Avandia;
• Offered kickbacks to healthcare professionals to induce them to promote and prescribe certain prescription drugs; and
• Submitted incorrect pricing data for various prescription drugs, thereby underpaying rebates owed to Medicaid and other federal healthcare programs.

GSK to Plead Guilty to Criminal Charges.

As part of the settlement, GSK has agreed to plead guilty to criminal charges that it violated the federal Food, Drug, and Cosmetic Act (FDCA). Allegedly, GSK introduced Wellbutrin and Paxil into interstate commerce when the drugs contained labels that were not in accordance with their FDA approvals. Additionally, GSK allegedly failed to report certain clinical data regarding Avandia to the FDA.

Settlement Originated From Whistleblower Actions.

The settlement is based on four qui tam, or whistleblower, actions brought by individuals pursuant to state and federal false claims. To view the federal False Claims Act, click here. A National Association of Medicaid Fraud Control Units team, along with several other federal agencies, investigated the matter and conducted settlement negotiations with the defendants. Florida’s civil investigation was handled by the Attorney General’s Complex Civil Enforcement Bureau, which is part of the Medicaid Fraud Control Unit.

Contact Health Law Attorneys Experienced in Healthcare Fraud Cases.

The Health Law Firm represents physicians, medical practices, pharmacists, pharmacies, and other health providers in healthcare fraud cases, including investigations, regulatory matters, litigation, and audits involving government health programs (Medicare, Medicaid, TRICARE).

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at http://www.thehealthlawfirm.com/.

Sources Include:

Meale, Jenn. "Attorney General Bondi's Office Reaches Historic Healthcare Fraud Settlement." Florida Office of the Attorney General. (July 2, 2012). Press Release. From:
http://www.myfloridalegal.com/newsrel.nsf/newsreleases/E494FDADFF113AC885257A2F0068F790

Schmidt, Michael S. and Katie Thomas. "GlaxoSmithKline Agrees to Pay $3 Billion in Fraud Settlement." New York Times. (July 2, 2012). From:
http://www.nytimes.com/2012/07/03/business/glaxosmithkline-agrees-to-pay-3-billion-in-fraud-settlement.html?pagewanted=all

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  http://www.thehealthlawfirm.com/  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Franck's Pharmacy Announces Sterile Compounding Service Shutdown; Recalls Compunding Prescriptions

Franck's Pharmacy, Inc. located in Ocala, Florida, recently issued a recall for its compounded prescriptions. The prescriptions impacted by this recall include all sterile human and veterinary compounded prescriptions distributed by Franck’s Pharmacy from November 21, 2011 to May 21, 2012. Franck's Pharmacy made the announcement on the company's website on May 24, 2012. To see the recall click here.
Recall Based on FDA Findings of Fungal Growth in Pharmacy's Clean Room.
The recall was allegedly prompted by action by the U.S. Food and Drug Administration (FDA). The FDA notified Franck's Pharmacy that environmental sampling of the pharmacy's clean room revealed the presence of microorganisms and fungal growth. Because of the FDA's findings, Franck's Pharmacy decided to recall its sterile compounds to prevent any possible risk of infection to patients.
Franck's Pharmacy Urges Physicians to Assist in Recall Efforts.
Franck's Pharmacy is seeking the assistance of physicians in alerting patients who may be impacted by the recall. Franck's Pharmacy is also advising physicians to review and evaluate patient records to determine if any adverse events may have resulted from use of the recalled products. Any adverse events should be reported to Franck’s Pharmacy and the FDA’s MedWatch program.
Franck's Pharmacy Ceases Production of Sterile Compounds.
Franck's Pharmacy also announced that it will stop producing sterile compounds at its Ocala lab facility for the present. Franck's Pharmacy made the announcement via e-mail on May 23, 2012. The e-mail also confirmed that several employees had been laid off. Allegedly, these employees were terminated due to the sterile compounding shutdown. Franck's Pharmacy will continue to compound non-sterile human and veterinary medicine.
Franck's Pharmacy Recently Linked to Eye Infection Outbreak.
Franck's Pharmacy decided to cease sterile compounding after the Centers for Disease Control and Prevention (CDC) issued a warning urging physicians not to use sterile products made by Franck's Pharmacy. The warning was issued after the CDC traced a rare fungal eye infection back to the pharmacy. The infection impacted at least 30 patients who allegedly had undergone some type of eye procedure in which Franck's Pharmacy products were used. For additional information on this, click here.
Prior Deaths of 30 Polo Ponies.
In an earlier unfortunate incident in 2009, Franck's Pharmacy's compounding of veterinarian prescriptions allegedly led to the deaths of approximately 30 expensive polo ponies here in Florida. Click here for details. In the aftermath of that case, the FDA attempted to prevent Franck's Pharmacy from any further compounding of pharmaceuticals for veterinary purposes. The FDA eventually lost the case heard by the U.S. District Court, Middle District of Florida, which ruled in favor of Franck's Pharmacy. The decision can be seen here.
Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.
The Health Law Firm represents pharmacists and pharmacies in investigations, regulatory matters, licensing issues, litigation, inspections and audits. The firm's attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.
To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at http://www.thehealthlawfirm.com/.
Sources Include:
Franck, Paul. "Urgent: Compounding Prescriptions Recall." Franck's Pharmacy. Press Release. (May 23, 2012). From
http://www.francks.com/
Medina, Carlos E. "Franck's Ceases Sterile Compounding Service." Ocala.com. (May 23, 2012) From
http://www.ocala.com/article/20120523/ARTICLES/120529872/-1/entertainment02?template/