The Department of Justice last week announced a $125 million settlement with the New Jersey-based pharmaceutical manufacturer Warner Chilcott to resolve criminal and civil liability for alleged violations of the federal anti-kickback statute.
The day before the settlement was announced a federal grand jury indicted the former president of Warner Chilcott’s pharmaceuticals division, Car Reichel. Reichel was charged with conspiracy to pay kickbacks to physicians.
The settlement resolved allegations that Warner Chilcott paid kickbacks to physicians to induce them to prescribe a variety of drugs. These payments included free dinners at expensive restaurants and speaker fees for attending those dinners, even though the dinners were largely social events that did not include clinical discussions.
The investigation into Warner Chilcott’s wrongdoing began when a whistleblower filed a qui tam action in federal court in Massachusetts, United States ex rel. Alexander, et al. v. Warner Chilcott plc, et al., Civil Action No. 11-CA-1121 (D. Mass.). This indictment follows the DOJ’s recent guidance that it will place an increased focus on seeking accountability from individual wrongdoers in corporate fraud schemes.