Shire Pharmaceuticals settles landmark kickback case for $350M

Shire Pharmaceuticals, a multinational pharmaceutical company with its U.S. headquarters in Lexington, Mass., has agreed to pay $350 million to settle federal and state False Claims Act allegations, according to the Department of Justice.

"This settlement represents the largest False Claims Act recover by the United States in a kickback case involving a medical device," said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the DOJ's civil division.

The settlement resolves allegations Shire Pharmaceuticals and its subsidiary Advanced BioHealth paid kickbacks and used other unlawful means to induce physicians and clinics to use or overuse Dermagraft, a bioengineered human skin substitute approved by the Food and Drug Administration for the treatment of diabetic foot ulcers.

The government alleged salespeople induced the use of Dermagraft by giving kickbacks to physicians in the form of lavish dinners, drinks, entertainment and travel; medical equipment and supplies; unwarranted payments for purported speaking engagements and bogus case studies; and cash, credits and rebates, according to the DOJ.

The settlement also resolved allegations that Shire unlawfully marketed Dermagraft for uses not approved by the FDA; caused improper coding, verification or certification of Dermagraft claims; and made false statements to inflate the price of Dermagraft.

The allegations against Shire were originally brought in six qui tam, or whistle-blower, lawsuits under the False Claims Act.

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