On December 13, the U.S. Attorneys Office for the District of Massachusetts announced that ASD Specialty Healthcare, LLC, doing business as Besse Medical, agreed to pay $1.67 million to settle allegations that it violated the False Claims Act by making unlawful kickbacks. The case stems from a qui tam lawsuit filed by a whistleblower.
ASD is a Texas-based distributor of specialty medical and pharmaceutical products, including ophthalmological injections that treat neovascular age-related macular degeneration (wet AMD).
According to the government, ASD “provided inventory management systems to retina practices at no cost to induce them to purchase drugs from Besse, in violation of the Anti-Kickback Statute.” The government further alleges that “ASD caused physicians to submit false claims to Medicare, TRICARE and the Department of Veterans Affairs induced by these kickbacks.”
“Pharmaceutical distributors cannot violate the law to gain a financial advantage,” said United States Attorney Joshua S. Levy. “Offering improper incentives to health care customers can increase health care costs and disadvantage competitors who are playing by the rules. Our office is committed to continue pursuing these investigations with our federal law enforcement partners.”
“According to the allegations in today’s settlement, ASD purchased a commercially available product and leveraged it to gain business in violation of the AKS,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue kickbacks at all levels of the distribution chain to preserve the integrity of federal health care programs.”
The case settles allegations raised in a qui tam lawsuit filed by former employees of Regeneron Pharmaceuticals, Inc., a company also a named defendant in the case, which manufactures and sells a drug to treat wet AMD.
The qui tam provisions of the False Claims Act allow individuals to file lawsuits alleging fraud in government contracting on behalf of the United States. In successful qui tam cases, whistleblowers can receive between 15% and 30% of the settlement amount.
The are whistleblowers are set to receive approximately $250,000 as their share of the recovery.
In July 2023, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Bipartisan Legislation Unveiled to Strengthen False Claims Act