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Benicar Maker Fined for Making False Payments to Induce Sales

By Rheingold Giuffra Ruffo Plotkin & Hellman LLP

The US seller of Benicar, Daiichi Sankyo, Inc., on January 9 agreed to pay a massive fine for paying kickbacks to doctors to induce them to prescribe the drug. The company will pay $39 million to settle claims brought under the Federal False Claims Act, with the money going both to the federal government and various states whose Medicaid program paid for Benicar.

While Benicar, which is known generically as olmesartan is the main drug involved in the scandal, other Daiichi drugs containing olmesartan are involved: Azor and Tribenzor. Further a cholesterol lowering drug made by Daiichi, Welchol, is also involved.

The federal civil suit arose out of a whistleblower suit begun by a former Daiichi sales person, Kathy Fragoules. She will receive over $6 million of the settlement for disclosing the fraudulent conduct.

Her information showed that under the guise of setting up a speaker’s bureau, where prescribing doctors would provide helpful information to other physicians, Daiichi was paying large sums to individual doctors, who prescribed a lot of these drugs, to go to lavish private parties, where they in effect spoke to each other.

The Japan News-Japan is where the parent company of Daiichi is located-quoted the federal lawyer who worked out the settlement as saying that “drug companies are prohibited from using lavish entertainment and padded speaker-program payments” to induce doctors to prescribe drugs which Medicare and Medicaid have to pay for.

The fraudulent conduct occurred between 2004 and 2011, within the time when our clients and others were exposed to physicians who may have prescribed Benicar under financial influence by Daiichi. Our firm is involved in both state and federal lawsuits for Benicar users who developed diarrhea and weight loss due to a condition called sprue and also enteropathy. The condition can be serious t hat it can lead to death, as is claimed in one of the suits we have brought. If you know anyone who was injured by Benicar, we would appreciate getting in contact with him or her.

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