Victory Pharma, Inc., Agrees to Pay $11.4 Million to Resolve Kickback Allegations

Victory Pharma, Inc., has agreed to pay $11,420,743 to resolve federal civil and criminal liability arising from its marketing of Naprelan, Xodol, Fexmid, and Dolgic, the Justice Department just announced, citing a whistleblower case.

The settlement resolves allegations that Victory, a specialty pharmaceutical company headquartered in San Diego, promoted its drugs through a wide-ranging scheme of kickbacks to doctors to induce them to write prescriptions for Victory products. Kickbacks included tickets to professional and collegiate sporting events, tickets to concerts and plays, spa outings, golf and ski outings, dinners at expensive restaurants, and other out-of-office events, the Washington Times reports. Some of the prescriptions involved were for patients covered by Medicare and other federal health insurance programs.“By bribing physicians with cash, concert tickets, tickets to sporting events, dinners, and other inducements, Victory Pharma compromised what is supposed to be the physician’s independent and sound medical judgment when they prescribe drugs to their patients,” an attorney representing whistleblower Chad Miller, a former sales representative for Victory, told the Washington Times. Miller filed a False Claims Act lawsuit in the Southern District of California. As part of the settlement, he will receive $1.7 million.

“Kickback schemes undermine the integrity of medical decisions, subvert the health marketplace and waste taxpayer dollars,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division, in a news release from the FBI’s San Diego Division.

The settlement is the result of a coordinated effort by the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Southern District of California; the Federal Bureau of Investigations (FBI); the Veterans Administration, and other federal agencies. The resolution is part of the government’s Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by the Justice Department and the Department of Health and Human Services in 2009.

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