Pharmaceutical Company to Pay $3.5M to Resolve Allegations of Paying Kickbacks to Doctors

PHILADELPHIA – U.S. Attorney William M. McSwain announced that pharmaceutical company Almirall, LLC, formerly named Aqua Pharmaceuticals, LLC (“Aqua”), will pay $3.5 million to resolve allegations that it employed illegal kickbacks to incentivize physicians to prescribe Aqua’s dermatology pharmaceutical drugs. 

The settlement resolves allegations that, between 2012 and 2017, Aqua knowingly paid kickbacks to dermatology providers in order to induce prescriptions of their drugs. Aqua, through its sales representatives and other employees, allegedly provided physicians with improper in-office and out-of-office meals and food items, entertainment, trips, gift cards, and gifts.  It also engaged health care providers for speaking engagements, advisory boards, and consulting services where one purpose of the compensation was to induce providers to prescribe Aqua drugs.

“Federal law is designed to ensure that doctors and other providers are not improperly influenced by pharmaceutical companies in deciding which drugs to prescribe,” said U.S. Attorney McSwain.  “Our office will do everything in its power to ensure that pharmaceutical companies and prescribers are playing by the rules and that they are not enriching themselves at the expense of patients’ well-being, especially those covered by Medicare and Tricare, the insurance for members of the armed services. This settlement is just the latest example of our office’s strong partnership with HHS-OIG and the Defense Health Agency to protect the integrity of our health care programs.”

“Pharmaceutical companies that ignore rules designed to protect patients will be held accountable. Patients must be able to trust that decisions made by their doctors are based on unbiased professional judgment and not personal gain,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services in Philadelphia. “We will continue to work with the U.S. Attorney’s Office in this District to root out all forms of waste, fraud and abuse in our federal health care programs.”

“I applaud the Department of Justice and the U.S. Attorney for their continued efforts to hold health care providers accountable to the American taxpayer,” said Vice Adm. Raquel Bono, director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefits of our service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participate in fraudulent practices.”

This settlement resolves allegations in a lawsuit filed in the Eastern District of Pennsylvania by a former Aqua sales representative, under the qui tam (or whistleblower) provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. The relator here will receive $735,000 as her share of the recovery in the case. The relator was represented by Brian J. McCormick, Jr., Esq. of Ross Feller Casey LLP, and Claudine Homolash, Esq., of the CQH Firm.

“We thank the whistleblower for coming forward and providing essential assistance to the government. This concerned citizen’s information and assistance were critical to our office’s discovery and investigative efforts in this matter, and we deeply appreciate her contribution,” said U.S. Attorney McSwain.

The federal investigation was conducted in cooperation with the California Department of Insurance, which conducted its own investigation. The Department of Insurance separately agreed to a resolution of $3.1 million with Aqua to resolve similar allegations.

This case was a cooperative effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Office of the Inspector General of the Department of Health and Human Services, and the Defense Health Agency. For the United States Attorney’s Office, Assistant United States Attorney Anthony D. Scicchitano and Auditor Dawn Wiggins handled the investigation and settlement.

The lawsuit is captioned United States ex rel. John Doe v. Aqua Pharmaceuticals, LLC et al., Civil Action No. 15-5086 (E.D. Pa.). The claims resolved by the settlement are allegations only; there has been no determination of liability.