Assertio Therapeutics, formerly known as Depomed, will pay $3.6m to settle charges that it caused false claims to be submitted to Medicare and TRICARE when it targeted its advertising at pain specialists who were prescribing high volumes of products similar to its product Lazanda, a nasal spray that contains fentanyl.
Lazanda is only FDA-approved for “breakthrough” cancer pain for patients already on an opioid regimen. But according to a press release, between 2014 and 2017, Assertio marketed its product to known high-volume prescribers of transmucosal immediate-release fentanyl (TIRF) products like Lazanda, some of whom were flagged for drug diversion or later indicted.
According to the DOJ, Assertio also strategically placed those high-volume prescribers on its speakers’ bureau and advisory boards in a bid to make sure Lazanda would be approved by insurance companies, including Medicare Part D plans.
According to the government, that conduct violated the False Claims Act (FCA) because its advertising led to Lazanda being prescribed to patients who did not have breakthrough pain by those high-volume prescribers when they submitted claims to Medicare and TRICARE.
The lawsuit against Assertio began as a qui tam action filed by relators who were advertising employees of the company. Their share of the final settlement amount has not yet been determined.
“This company took steps to boost its profits despite the risk of boosting the deadly opioid epidemic,” said US Attorney Martin. “My office will continue to seek out violations like this that demonstrate a brazen disregard for the safety of the public.”
The settlement resolves the claims without requiring Assertio to admit liability.
False claims, marketing, enforcement priorities
Under the FCA, healthcare companies can be charged with submitting false claims to the government if they are submitted to government-sponsored programs like Medicare or Medicaid.
In a recent conversation with GRIP, healthcare attorneys Barry Posner and Tama Kudman emphasized that marketing practices are a frequently overlooked area that can lead to false claims.
Those false claims do not require specific proof of intent to defraud, making the FCA’s scope of enforcement particularly expansive.
And the DOJ has signaled that it will not be relenting on False Claim Act enforcement, making the priority a standout in an administration otherwise committed to aggressive deregulatory efforts.
Similar efforts are also being applied to use the FCA to pursue enforcement actions against companies that breach cybersecurity procedures agreed to in government contracts.
So far this year, healthcare companies and their contractors have reached settlements with the Department of Justice over violations of the False Claims Act, resulting in hundreds of millions of dollars in penalties – including $650m from McKinsey and $350m from Walgreens, both for their role in the opioid crisis.
Qui tam cases are filed by private relators, who share a percent of the recovery, and constitute the bulk of FCA lawsuits. The qui tam provision was recently ruled unconstitutional by the Firth Circuit Court of Appeals.
