August 22, 2017 / 4:58 PM / 3 months ago

U.S. Bioservices to resolve kickback claims for $13.4 million: filing

(Reuters) - Specialty pharmacy firm US Bioservices Corp has agreed to pay $13.4 million to settle U.S. government claims that it pushed patients to refill prescriptions of Novartis AG’s iron overload drug Exjade in exchange for referrals from the Swiss drugmaker.

US Bioservices, a unit of drug wholesaler AmerisourceBergen, agreed to pay $10.6 million to the federal government and $2.8 million to states, according to a filing on Tuesday in Manhattan federal court by Acting U.S. Attorney Joon Kim.

The deal, which must be approved by the court, would resolve a civil lawsuit filed by Kim earlier on Tuesday claiming that U.S. federal and state insurance programs were illegally billed for Exjade prescriptions that stemmed from kickbacks.

AmerisourceBergen said in a previous filing with U.S. securities regulators that it was not admitting wrongdoing as part of the settlement.

According to the lawsuit, from August 2010 to March 2012, US Bioservices encouraged patients to refill Exjade prescriptions by having its nurses call them with “one-sided advice,” emphasizing the dangers of not treating iron overload and downplaying the drug’s side effects.

Exjade had been linked to severe side effects including kidney and liver failure and gastrointestinal bleeding, which have resulted in deaths, according to the lawsuit.

US Bioservices also assigned a group of employees known as patient care coordinators to call patients and urge them to refill their prescriptions, the lawsuit said.

US Bioservices competed with two other pharmacy companies that distributed the drug - BioScrip Inc and Express Scripts unit Accredo Health Group Inc - for patient referrals from Novartis. Novartis would dole out the referrals according to how many refills each pharmacy achieved, according to the lawsuit.

As a result of the scheme, the government-run Medicare and Medicaid programs were billed for prescriptions “tainted” by kickbacks, violating federal law, according to the lawsuit.

Novartis previously settled claims that it paid kickbacks to promote Exjade and other drugs for $390 million in 2015. BioScrip and Accredo also previously settled claims, collectively paying $75 million.

The case is United States v. US Bioservices Corp, U.S. District Court, Southern District of New York, No. 17-cv-06353.

Reporting by Brendan Pierson in New York; Editing by Paul Simao

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