Two Drug Companies to Pay $38Mln to Resolve Fraud, Kickback Allegations

Two of US biomedical company Allergan’s subsidiaries, Forest Laboratories and Forest Pharmaceuticals, will pay $38 million to settle violations of the False Claims Act, a law that makes people and businesses financially liable for defrauding the federal government, according to the US Department of Justice.

WASHINGTON (Sputnik) – Two of US biomedical company Allergan’s subsidiaries, Forest Laboratories and Forest Pharmaceuticals, will pay $38 million to settle violations of the False Claims Act, a law that makes people and businesses financially liable for defrauding the federal government, the Department of Justice said in a release.

“Forest Laboratories LLC, located in New York, New York, and…Forest Pharmaceuticals Inc., have agreed to pay $38 million to resolve allegations that they violated the False Claims Act by paying kickbacks to induce physicians to prescribe the drugs Bystolic, Savella, and Namenda,” Thursday’s release stated.

It added that the settlement resolves civil charges from the Justice Department that the subsidiaries breached the Anti-Kickback Statute, which prohibits the exchange of any use of bribery to induce referrals or services covered by federal health insurance programs.

As a result of the settlements, the US government will receive $35.5 million and state-run Medicaid programs will get $2.5 million, the release explained.

On Wednesday, the Justice Department announced it recovered more than $4.7 billion from civil cases under the False Claims Act during fiscal year 2016, which ended September 30.