01.15.14
CareFusion Corp. will pay $40.1 million to settle federal allegations that the company paid kickbacks to boost sales of a pre-surgical skin treatment called ChloraPrep, and marketed the product for off-label uses (i.e., for applications not approved by the U.S. Food and Drug Administration [FDA]).
U.S. Department of Justice (DOJ) said the fine resolves allegations that CareFusion violated the federal False Claims Act by paying $11.6 million to a doctor to promote its ChloraPrep product to healthcare providers. The doctor, Charles Denham, received the kickbacks while serving as co-chair of the safe practices committee of the nonprofit National Quality Forum, which makes recommendations on healthcare practices, according to the DOJ.
"Corrupting the standard-setting process through kickbacks can affect the healthcare treatment choices that doctors and hospitals may make for patients," Stuart Delery, assistant attorney general for the Justice Department's civil division, said in a statement.
The lawsuit also claimed that CareFusion promoted ChloraPrep from September 2009 through August 2011 for unapproved uses. The FDA only approved ChloraPrep to prepare patients' skin for surgery or injections.
CareFusion officials say the company set aside funds for the settlement in the first quarter of 2013. CareFusion previously disclosed on April 25 that it had reached an agreement, in principle, to pay the government to resolve the allegations.
"We are pleased to resolve this matter and are confident we have strong practices, processes and controls in place," said Kieran T. Gallahue, chairman and CEO of the San Diego, Calif.-based company. "We have made significant investments during the past several years to improve our quality and compliance systems, including our sales and marketing practices, and will continue to do so as part of our commitment to adhering to the highest standards and aligning with best global practices."
The agreement to pay the fine also resolves a whistleblower lawsuit first brought in September 2010 by Cynthia Kirk, a former vice president of regulatory affairs at a CareFusion infection prevention unit. She will receive $3.26 million through the settlement, which along with the lawsuit was unsealed this week by the federal court in Kansas City, Kansas.
U.S. Department of Justice (DOJ) said the fine resolves allegations that CareFusion violated the federal False Claims Act by paying $11.6 million to a doctor to promote its ChloraPrep product to healthcare providers. The doctor, Charles Denham, received the kickbacks while serving as co-chair of the safe practices committee of the nonprofit National Quality Forum, which makes recommendations on healthcare practices, according to the DOJ.
"Corrupting the standard-setting process through kickbacks can affect the healthcare treatment choices that doctors and hospitals may make for patients," Stuart Delery, assistant attorney general for the Justice Department's civil division, said in a statement.
The lawsuit also claimed that CareFusion promoted ChloraPrep from September 2009 through August 2011 for unapproved uses. The FDA only approved ChloraPrep to prepare patients' skin for surgery or injections.
CareFusion officials say the company set aside funds for the settlement in the first quarter of 2013. CareFusion previously disclosed on April 25 that it had reached an agreement, in principle, to pay the government to resolve the allegations.
"We are pleased to resolve this matter and are confident we have strong practices, processes and controls in place," said Kieran T. Gallahue, chairman and CEO of the San Diego, Calif.-based company. "We have made significant investments during the past several years to improve our quality and compliance systems, including our sales and marketing practices, and will continue to do so as part of our commitment to adhering to the highest standards and aligning with best global practices."
The agreement to pay the fine also resolves a whistleblower lawsuit first brought in September 2010 by Cynthia Kirk, a former vice president of regulatory affairs at a CareFusion infection prevention unit. She will receive $3.26 million through the settlement, which along with the lawsuit was unsealed this week by the federal court in Kansas City, Kansas.