Valeant pays $54 million to settle U.S. kickback, fraud claims

Thu Jun 9, 2016 5:45pm EDT
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By Jonathan Stempel

NEW YORK (Reuters) - Valeant Pharmaceuticals International Inc will pay $54 million to settle civil charges that its Salix unit paid illegal kickbacks to induce doctors to prescribe seven of its products, causing the submission of thousands of fraudulent reimbursement claims to the U.S. government.

The accord announced on Thursday by the U.S. Department of Justice covers alleged improper activity at the former Salix Pharmaceuticals Inc from 2009 to 2013, predating its April 2015 acquisition by Valeant for more than $11 billion.

Salix admitted and accepted responsibility for routinely paying doctors hundreds or thousands of dollars, or offering perks including lavish meals at restaurants such as Le Bernardin and Nobu, to attend some of its roughly 10,000 "speaker programs," including many with little or no educational value.

One doctor from Rochester, New York allegedly received more than $200,000 for attending numerous events, including some where he was told not to do slide presentations and that dinner was the only gathering planned.

"Receipts from Salix's speaker programs - which were approved by managers - evidence the existence of speaker programs that were quite clearly happy hours," the government added.

The Justice Department said the kickback scheme worked, as many attendees began prescribing Salix products more often.

It said this led to thousands of false payment claims being submitted to Medicare and Medicaid, and two healthcare programs serving active and retired military personnel.

"Salix found a way to pay doctors money and treated them to fancy meals to push their drugs," U.S. Attorney Preet Bharara in Manhattan said in a statement.   Continued...

The headquarters of Valeant Pharmaceuticals International Inc is seen in Laval, Quebec, Canada on November 9, 2015.   REUTERS/Christinne Muschi/File Photo