Biovail Pleads Guilty To Illegal Kickback Scheme That Resulted In False Claims

Biovail, a major player in the pharmaceutical industry, pled guilty last week to charges of paying illegal kickbacks to medical professionals who recommended or prescribed Biovail’s hypertension drug, Cardizem L.A.   Biovail has been sentenced to pay a $22.2 million criminal fine, and has also agreed to pay $2.4 million to resolve allegations that its conduct caused the submission of false claims for payment of federal funds. 

According to federal prosecutors,  Biovail paid thousands of medical professionals up to $1,000 to enroll between 11 and 15 patients in a special plan that required the professionals to write Cardizem prescriptions.  These included prescriptions that were paid by the Medicaid program.

Federal law prohibits the payment of kickbacks, bribes, or rebates for the purposes of inducing a person to order or recommend the purchase of any item paid for by a federal health care program, including a Medicaid program.  Similarly, the federal False Claims Act prohibits the facilitation of false or fraudulent claims for payment to the government. In 2003 alone, the Medicaid program paid out more than $3 million in reimbursements for Cardizem-brand prescriptions nationwide.  

Cardizem L.A. was introduced in March 2003 as the world’s first 24-hour time-release hypertension medication.  Apparently, Biovail shareholder value was tightly linked to Cardizem L.A.’s success.  In an email prior to the medication’s launch, a Biovail vice president urged pharmaceutical sales representatives to “deliver growth” because his personal “net worth would shrink dramatically” if the new Cardizem brand failed.

Biovail has been developing, manufacturing and distributing pharmaceutical products since the 1990s, and boasts a portfolio of well-known brands such as Ativan, Well-Butrin, Ultram, and Zovirax.   In Canada, Biovail’s drugs are marketed and sold directly to primary care physicians.  According to Biovail’s website, the company “intends to develop or acquire a specialty sales force” to promote certain products “directly to specialists in the U.S.”  Hopefully, this sales force will use legitimate marketing techniques that do not result in violations of the False Claims Act.

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