A Massachusetts-based pharmaceutical company will pay $20.75 million settle a whistleblower’s allegations that the company knowingly promoted misleading instructions for a skin lesion drug that caused doctors to submit false claims to Medicare.
DUSA Pharmaceuticals, a subsidiary of Sun Pharmaceutical Industries, Inc. (Sun Pharma), allegedly convinced doctors to speed up the incubation process for the drug Levulan Kerastick, a prescription drug approved by the United States Food and Drug Administration (FDA) for the treatment skin lesions on the face or scalp.
The whistleblower, former DUSA sales representative Aaron Chung, had filed a lawsuit in federal court claiming that DUSA’s and Sun Pharma’s actions violated the False Claims Act. The settlement resolves the lawsuit, and Chung will receive approximately $3.5 million, according to a Department of Justice press release.
DUSA and Sun Pharma have agreed to enter into a Corporate Integrity Agreement with the Office of the Inspector General (OIG) and Health and Human Services (HHS). That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter, the DOJ said.
The FDA-approved process for Levulan Kerastick involved the application of the topical solution to target lesions. After an incubation period of 14-18 hours, doctors would follow with a blue light treatment, according to the DOJ press release.
Between January 2014 and December 2016, managers at DUSA (and later, Sun Pharma) told doctors that using a one- to three-hour incubation period of the drug, before using the blue light treatment, was just as effective.
DUSA and Sun Pharma used “paid physician speaker programs, paid physician peer-to-peer discussions, promotion by DUSA’s sales force, and the dissemination of incomplete or misleading responses to questions from prescribing doctors” to promote the shorter incubation period, the DOJ said.
While the false instructions “may have resulted in more sales and bigger profits, it also meant customers endured the frustration of being repeatedly subjected to less effective treatments to try to get their skin lesions to clear,” said U.S. Attorney Brian T. Moran, for the Western District of Washington, in the DOJ press release.
The DOJ further alleged that DUSA failed to inform physicians that administering the drug using short incubation periods resulted in significantly lower rates of clearing the lesions “than were achieved with the longer incubation period described in the FDA-approved instructions.” In some instances, the company falsely stated that the lesion clearance rates were the same for the shorter and less effective incubation periods, the DOJ said.