McEldrew Young Whistleblower Lawsuit Against Valeant Subsidiary Salix Settles For $54 Million

McEldrew Young, Attorneys-at-Law, announces a $54 million dollar settlement of its False Claims Act qui tam lawsuit against Salix Pharmaceuticals, a subsidiary of Valeant Pharmaceuticals, by the United States Department of Justice (“DOJ”).  Salix knowingly caused the submission of false claims to Medicare and Medicaid by paying kickbacks to prescribing physicians, including sham “speaking” fees, according to the allegations in the lawsuit In re Salix, Case No. 12-3870, in the United States District Court for the Southern District of New York.

“Drug and medical device companies have paid billions of dollars to doctors as speakers, researchers and consultants,” declared Eric L. Young, Esq., a Partner at McEldrew Young.  “Salix crossed the line and those payments became kickbacks when its speaker programs stopped focusing on education and instead rewarded doctors for writing prescriptions.”

McEldrew Young’s 2012 qui tam lawsuit against Salix and the resulting government investigation revealed a company lavishing prescribers with thousands of dollars in speaking fees, expensive dinners, drinks, and entertainment in order to increase the number of prescriptions written by doctors for Xifaxan, Apriso, Relistor, MoviPrep, OsmoPrep, Solesta and Deflux.  From January 2009 through December 2013, Salix employees throughout the United States held “speaker” programs that were primarily social in nature.  The complained of misconduct included, for example:

  • Gatherings at high-end restaurants with little or no time discussing Salix drugs;
  • Doctors attending multiple programs on the same topic over a short period of time;
  • Pre-recorded presentations which were not played or were not in a location conducive to watching or listening; and
  • Gatherings including non-healthcare professionals such as physicians’ spouses.

Salix decided to resolve the government’s investigation into its sham speaker program payments after being confronted with a mountain of evidence provided, in large part, by our clients,” said James J. McEldrew, III, a Partner at McEldrew Young, and Past President of the Philadelphia Trial Lawyers Association. “These practices could not have been stopped without a tremendous team effort including our clients, who were determined to do the right thing for American patients and taxpayers, and the Justice Department attorneys, who worked tirelessly on the case.”

McEldrew Young worked closely with Joseph Trautwein of Joseph Trautwein & Associates who represented one of several whistleblowers in the case.

The Salix lawsuit is one of several filed by McEldrew Young attorneys concerning allegations that pharmaceutical companies engaged in the payment of sham “speaker” fees.  McEldrew Young continues to pursue separate lawsuits against Novartis, Pfizer and Teva seeking the recovery of billions of dollars in payments made by Medicare and Medicaid over the past decade.  These lawsuits are captioned U.S. ex rel. Bilotta v. Novartis Pharmaceuticals Corp., Case No. 11 Civ. 0071 (S.D.N.Y.), U.S. ex rel. Brown et al. v. Pfizer, Inc., Case No. 05-6795 (E.D. Pa) and U.S. ex rel. Arnstein et al. v. Teva Pharmaceuticals, Inc. et al. Case No. 13 Civ. 3702 (S.D.N.Y.).

The Anti-Kickback Statute makes it unlawful to knowingly offer or pay any remuneration (whether in cash or in kind) in exchange for the referral of business paid for by a federal government healthcare program, such as Medicare or Medicaid.  42 U.S.C. § 1320a-7b(b).  The False Claims Act rewards individuals reporting violations of the Anti-Kickback Statute through a qui tam lawsuit with rewards of between 15 and 30 percent of the government’s recovery.

McEldrew Young represents whistleblowers throughout the United States and abroad reporting corporate wrongdoing to the U.S. Government through reward programs created by the False Claims Act, the Dodd-Frank Act, the Motor Vehicle Safety Whistleblower Act, and the IRS Whistleblower Program.  Through these laws, our attorneys help clients report health care fraud, government contract fraud, securities fraud, delayed motor vehicle recalls, and tax evasion, among other things. The firm is led by James J. McEldrew, III and Eric L. YoungJim McEldrew is a trial attorney and Past President of the Philadelphia Trial Lawyers Association.  Eric L. Young is a whistleblower attorney with a distinguished track record of success in whistleblower cases.  Eric has represented whistleblower clients in cases against some of the largest pharmaceutical companies in the world, in addition to having secured the first-ever whistleblower reward paid by the IRS Whistleblower Office in 2011.

Joseph Trautwein has more than sixteen years experience in complex civil litigation including twelve years of service with the U.S. Department of Justice. He was Assistant U.S. Attorney in the civil division of the Philadelphia office until 2010, focusing primarily on health care and defense contractor fraud. Trautwein continues to pursue corporate wrongdoing on behalf of consumers and the government.