DUSA Pharmaceuticals To Pay $20.75 Million to Settle False Claims Act Whistleblower Case

DUSA Pharmaceuticals, Inc. (DUSA) has agreed to pay $20.75 million to the federal government to settle allegations that it promoted methods of using the drug Levulan Kerastick that contradicted instructions the Food and Drug Administration (FDA) had approved. The case was brought by whistleblower Aaron Chung, an ex-member of the DUSA sales team. Chung brought the claim under the qui tam whistleblower provision of the False Claims Act, and the government took up prosecution of the case soon after. Chung claims the senior management at DUSA ignored the proper treatment method the FDA’s Dosage and Administration division had approved and instead promoted a less effective method to increase Levulan Kerastick sales.

Levulan Kerastick is a drug that comes in the form of a cream, used primarily to treat actinic keratosis or small scaly lesions that form on the skin after years of prolonged sun exposure. The FDA’s approved treatment method is to apply the cream to the affected spots and let it rest for 14 to 18 hours, before treating it with a blue light. The government alleges that since 2014, DUSA knew through clinical trials that the most effective way to use the drug was a 14 to 18 hours application, but instead, promoted a much shorter 1 to 3 hour application period. This representation may have caused patients to use the drug multiple times in shorter application periods that were ineffective instead of using it once, in the most effective way. Between 2014 and 2016, DUSA allegedly used its sales force to promote this shorter treatment method and paid physician speaking programs to encourage the incorrect use of Levulan Kerastick. DUSA also allegedly misrepresented the short application period’s effectiveness use to doctors who requested the information, claiming that the results of the short and long application periods were comparable. This campaign of misrepresentation prevented doctors from giving their patients the most accurate information about how to use the drug.

DUSA and its parent company Sun Pharmaceutical Industries (SPI) have agreed to enter a Corporate Integrity Agreement (CIA) with the Office of the Inspector General. The terms of this agreement mandate that SPI and DUSA incorporate new review methods and standards to catch fraudulent behavior like this before it happens again.

Under the False Claims Act, whistleblowers are entitled to 10 to 30% of the money that the government recovers from the lawsuit. Aaron Chung will receive over $3.5 million for his part in bringing the case. Whistleblowers like Chung can bring to light fraud that the government otherwise may not be able to discover. This settlement once again proves that the False Claims Act is extremely effective in encouraging whistleblowers to step forward and discouraging pharmaceutical companies from further fraudulent behavior.

Read the Department of Justice’s press release here.

Exit mobile version