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Whistleblower Suit Prompts Schwartz Pharma to Pay $22M to Resolve False Claims

May 5, 2010

Whistleblowers who reported Schwarz Pharma Inc., a subsidiary of Belgium-based UCB S.A., for submitting “false quarterly reports to the government related to a pair of drugs, Deponit and Hyoscyamine Sulfate Extended Release (Hyoscyamine Sulfate ER)” will share in the $22 million the company will pay to settle the allegations.  According to DoJ:

Deponit is a nitroglycerin skin patch that has been used to prevent angina. Hyoscyamine Sulfate ER is an antispasmodic medication that has been used to treat various stomach, intestinal, and urinary tract disorders that involve cramps, colic, or other painful muscle contractions. While the active ingredients in Deponit and Hyoscyamine Sulfate ER had been in products on the market for many years, the Food and Drug Administration made determinations in 1997 and 1999 that resulted in the drugs being ineligible for reimbursement by government health care programs such as Medicaid.

“Pharmaceutical companies must provide accurate and complete information to the government about the drugs they manufacture,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “There will be consequences for companies who provide false information to obtain taxpayer dollars for their drugs.”

The Schwartz payment is one of a string of recent settlements under federal and state false claims acts involving pharmaceutical companies. See e.g. Johnson & Johnson’s settlement for off-label marketing of Topomax. Since January 2009, the federal government has recovered over $2.38 billion with the assistance of whistleblowers under the qui tam provisions of the False Claims Act.

To report Medicare fraud or Medicaid fraud, contact Frohsin & Barger.

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