In July 2018, medical device manufacturer AngioDynamics, Inc., agreed to pay the United States $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare ...

AngioDynamics Settles False Claims Act Allegations for $12.5 Million and more...



AngioDynamics Settles False Claims Act Allegations for $12.5 Million

In July 2018, medical device manufacturer AngioDynamics, Inc., agreed to pay the United States $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of their two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK).

The $12.5 million is split in two separate settlements – an $11.5 million settlement to resolve allegations that AngioDynamics caused false claims to be submitted to government healthcare procedures involving an unapproved drug-delivery device (LC Bead) that was marked with false and misleading promotional claims.

The government alleged that from May 2006 through December 2011, AngioDynamics served as the U.S. distributor for Biocompatibles plc, the manufacturer of LC Bead, and marketed LC Bead for use as a drug-delivery device in combination with chemotherapy drugs. The government further alleged that AngioDynamics personnel routinely claimed that this particular use of LC Bead, which FDA had twice declined to approve, was “better,” “superior,” “safer,” and “less toxic” than alternative treatments, even though there was insufficient clinical evidence to support the truthfulness of these claims. The federal share of the civil settlement is approximately $10.9 million, and the state Medicaid share of the civil settlement is approximately $600,000.  The government previously resolved related criminal and civil claims against Biocompatibles in November 2016.

The other $1 million calculated in the settlement is to resolve allegations that AngioDynamics caused false claims to be submitted to federal healthcare programs in connection with the use of the PVAK. In 2008, AngioDynamics acquired the PVAK as part of a product suite that uses a laser to close or collapse malfunctioning veins. The PVAK was FDA-cleared only for use in treating superficial veins, and in 2011, AngioDynamics requested that the FDA clearance include the treatment of perforator veins. The FDA would not grant such a clearance as the treatment of perforator veins constitutes a new indication for which safety and efficacy were unknown. Then, AngioDynamics voluntarily recalled the PVAK and re-issued the product under a new name, the 400 micron kit, that did not refer to the unapproved use of treating perforator veins. Notwithstanding the recall and rebranding, select AngioDynamics personnel, as part of a continued campaign to market the device to treat perforator veins, falsely represented to providers that Medicare would cover this use despite Medicare coverage restrictions to the contrary.

“This settlement reflects the expectation that medical device manufacturers will give doctors accurate information about devices they manufacture and underscores the vital role of the False Claims Act in protecting the public,” said United States Attorney Grant C. Jaquith for the Northern District of New York. “We will continue to use all available tools to help secure patient safety and ensure the integrity of healthcare services claims submitted to the government.”

“Medical device makers have an obligation to provide truthful information to protect both patients and the integrity of government health programs,” said Special Agent in Charge Scott J. Lampert of the U.S. Health and Human Services Department Office of Inspector General.  “We will continue to thoroughly investigate health care fraud allegations.”

Doctors Do Their Part in the Battle Against Opioids

In a report released by the American Medical Association (AMA) , it was found that nationwide, more than 19 million fewer prescriptions for opioids were issued from 2016 to 2017, resulting in a 9 percent decrease. Since 2013, the number of opioid prescriptions has decreased by more than 55 million, a 22.2 percent decrease. Overall, opioid prescribing has been reduced nationwide for the fifth year in a row as of the close of 2017 and all fifty states have seen declines in opioid prescribing over the same period.

When it comes to individual states, Pennsylvania doctors wrote 1.3 million fewer prescriptions for opioids in 2017 than they did in 2016. The steep decline in Pennsylvania of 14 percent was the among the largest in the nation.

These numbers do not signal a complete and total success, however. Multiple physician leaders understand that this is progress, but there is still work to be done. “While the report shows how physician leadership is advancing the fight against the opioid epidemic, both nationally and in Pennsylvania, we know there is much work left to do before we can turn the tide,” said John Gallagher, MD, chair of the Pennsylvania Medical Society’s Opioid Task Force.

“What is needed now,” said Patrice A. Harris, MD, MA, chair of the American Medical Association’s Opioid Task Force on the national level, “is a concerted effort to greatly expand access to high quality care for pain and for substance use disorders. Unless and until we do that, this epidemic will not end.”

The AMA report includes additional actions physicians and other healthcare professionals can take to help end the opioid epidemic. Some suggestions include:

  • Registering for and using their state prescription drug monitoring program, a system that enables doctors to check a database of information about other prescriptions issued to a patient;
  • Enhancing their own education about safe and effective prescribing practices and other approaches to treating pain. For example, in 2017, more than 549,700 physicians and other health care workers across the nation completed continuing medical education trainings and accessed other education resources;
  • Increasing access to comprehensive treatment for opioid use disorders, including medication-assisted treatment;
  • Ensuring that patients in pain receive the care they need to avoid the stigma of pain;
  • Reducing the stigma of having a substance use disorder through recognition that they are treatable medical conditions; and
  • Increasing access to naloxone, an opioid overdose reversing drug, through co-prescribing and other overdose prevention measures as well as expanding Good Samaritan laws.

In a nod to the importance of CME when it comes to the opioid epidemic, the AMA report notes that in addition to the staggering statistic above of over half a million healthcare providers completing CME, in 2016 and 2017, physicians and other health care professionals used the AMA opioid microsite website to access education and training resources from the nation’s medical societies and other trusted sources a total of 19,260 times. These materials cover opioid prescribing, pain management, screening for substance use disorders, and related areas.

Swarming on the Opioid Crisis (Part 2)

This is the second article in the series exploring the major themes emerging from recent efforts to combat the ‘opioid crisis’ and their potential impact on drug manufacturers’ compliance programs. In this article, we explore the pressures facing the DEA to reduce diversion and the possibility of changes to the quota system.

As the opioid epidemic continues to solidify its status as the most prominent contemporary public health issue, the search for a single responsible party continues through a heated finger-pointing debate in Washington. Between a flurry of legislative activity in Congress and a seemingly infinite spool of opioid-related litigation at the federal, state and local levels of government, one might think that the pharmaceutical industry is shouldering the entire burden of the blame; it is not. Competing targets have emerged that include health care providers, pharmacists and even the Drug Enforcement Agency (“DEA”) itself.

To read the full article, visit Life Science Compliance Update.

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Humana Faces Anti-Kickback and False Claims Act Suit

A federal judge recently denied motions by Humana Inc., in an ongoing whistleblower lawsuit with Hoffman-LaRoche Ltd. The lawsuit was brought by a former Roche Diagnostics employee, Crystal Derrick, who alleged that Roche inappropriately dismissed debt that Humana owed to Roche to keep Roche’s diabetes testing products on Humana’s formularies and to exclude competing products.

The complaint, filed in June 2014, alleges that the dismissed debt gave Roche inappropriate access to insurance plan participants of Humana’s. The complaint further alleges that Humana was planning to cut Roche’s products from its Medicare Advantage plans and Medicare prescription drug plans’ formularies in March of 2013 until it was realized that Roche had overpaid Humana in rebates. Roche allegedly determined the overpayment (of roughly $45 million) to be “an opportunity to be placed back on Humana’s formularies.”

According to the recent ruling, Roche offered to settle the $45 million debt for a mere $27.6 million because it did not want to lose the Humana relationship. Humana allegedly balked at the discount and said they would return no more than $20 million of the debt. Negotiations continued through December 2013 when Humana and Roche agreed on a contract requiring Humana to repay no more than $11 million and to place Roche’s diabetes products back on Humana’s formularies and exclude competing brands.

The whistleblower employee – the same employee who realized the overpayment existed – expressed concern to her superiors about the potential violation of two federal laws in the deal: the Anti-Kickback Statute and the False Claims Act. The whistleblower was fired shortly after the deal was executed, and she believes she was terminated because of “her effort to blow the whistle on [Humana’s and Roche’s] unlawful kickback scheme.”

Humana and Roche attempted to get the case thrown out by arguing for dismissal on the ground that the complaint “fails the particularity and plausibility standards of Rule 9(b) and Rule (8). They argue that dismissal is appropriate for the additional reason that the conduct relator attributes to them in the complaint falls within the AKS’s safe harbor provisions and is consistent with Congress’s intent in establishing a ‘managed care’ exception to the statute.

Judge Elaine E. Bucklo, however, did not find their arguments persuasive, reminding the companies that the False Claims Act is designed to encourage whistleblowers to report possible fraud within all industries and that whistleblowers filing False Claims Act violations do not need to provide highly specific details of the apparent fraud, but only their own internal observations that indicate possible criminal activity.

Judge Bucklo stated, “If Roche’s proposed standard was correct, a relator would need to be a False Claims Act expert in order to report suspected fraud internally, which clearly is not the Act’s intended purposed.”

Sanford Heisler Sharps is the firm representing Ms. Derrick, the whistleblower, and attorney Ross Brooks praised Judge Bucklo’s decision, noting, “The Court affirms the important principle that financial arrangements between managed care organizations and pharmaceutical companies are not immune from the False Claims Act and Anti-Kickback Statute.” He continued, saying, “This decision is critical as watchdog groups scrutinize secretive financial arrangements among pharmaceutical companies, pharmacy benefit managers, and insurance companies.”

Sixteenth Annual Independent Medical Education & Grants Summit

On September 13th and 14th, 2018, the 16th Annual Independent Medical Education and Grants Summit will take place at the Philadelphia 201 Hotel in Philadelphia, Pennsylvania. The two-day event boasts a variety of stakeholders, including commercial supporters, CME providers and others, to address leading industry issues centered around translating the value of CME, improving and standardizing outcome reporting formats, and linking CME to patient and healthcare impact. This year’s program will have a special focus on how CME fits into the broader healthcare landscape, how the CME model may need to shift to ensure sustainability, and how to develop and operationalize global CME capabilities.

Day One – Thursday, September 13, 2018

The first day opens with a welcome and opening remarks by Patricia Jassak, the Director of IME and Medical External Affairs at Astellas and the Co-Chairperson of the event. The welcome is followed by a panel discussion on envisioning a future model of CME, then a legislative update from Andrew M. Rosenberg, the Senior Advisor of the CME Coalition.

After a networking and exhibit break, our editor Tom Sullivan will be moderating a panel discussion on the medical education’s future role in the MACRA/MIPS era, with panelists Andrew M. Rosenburg, John Ruggiero, PhD, POA, CHCP, Jeffery Smith, MPP, and Amanda Kaczerski, MS, CHCP.

Three more panel discussions follow, as well as a networking lunch, before the afternoon breaks out into two learning paths – Working Session A focuses on how to align medical education to strategy and evaluate insights and impact, while Working Session B focuses on how to design and communicate an educational initiative. Following those two concurrent sessions are another two concurrent session – Working Session C will discuss how to align strategic considerations for orphan, rare, and ultra-rare diseases, while Working Session D will focus on advance outcomes reporting on a budget.

Two additional speaking sessions round out the first day, along with a networking, wine and cheese reception.

Day Two – Friday, September 14, 2018

The second day will open with a review of Day One by Pamela Mason, co-chairperson and director of the Medical Education Grants Office at AstraZeneca. The morning then branches into panel discussions and presentations, including topics such as best practices for operationalizing global CME, implementing and executing a global CME activity, and how to engage patients in educational design to ensure person centered care and shared decision-making. The day closes out with a presentation on models for patient engagement – a 360 approach, and the conference ends by roughly 3pm on Friday.

If you are interested in attending, you can register here.


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