Sanofi-Aventis Agrees to $190 Million Settlement for Alleged False Claims Act Violations Regarding ANZEMET

On September 10, 2007, the U.S. Department of Justice announced that French pharmaceutical company Sanofi-Aventis (“Aventis”), formerly Aventis Pharmaceuticals Inc., agreed to pay $190 million to settle allegations that the company caused false claims to be filed with Medicare and other federal health programs.  The settlement agreement was a result of the company’s alleged fraudulent pricing and marketing of ANZEMET (dolasetron mesylate), which is an antiemetic drug used primarily in conjunction with oncology and radiation treatment.  The government’s investigation commenced after the filing of a Federal False Claims Act (“FCA”) suit by Ven-A-Care of the Florida Keys Inc., a home-infusion company.  The FCA allows for private persons to file a qui tam or whistleblower suit on behalf of the government.  As part of the settlement, the Ven-A-Care whistleblowers will receive approximately $32 million.

The government alleged that Aventis engaged in a scheme to set and maintain fraudulent and inflated prices for ANZEMET knowing that federal health care programs established reimbursement rates based on those prices.  The government further alleged that Aventis used the difference between the inflated prices that the company reported and the actual prices for the drugs charged to its customers –commonly known as the “spread”– to market, promote and sell ANZEMET.  Because reimbursement from federal programs was based on the fraudulent, inflated prices, the government contended that Aventis caused false and fraudulent claims to be submitted to federal health care programs, thereby violating the FCA.

In exchange for the Department of Health and Human Services Office of Inspector General’s (“OIG”) agreement not to seek an exclusion of Aventis from federal health care programs, Aventis agreed to enter into a Corporate Integrity Agreement (“CIA”) for five years.  The Aventis CIA includes requirements to:

• Hire a compliance officer and appoint a compliance committee;
• Develop a written code of conduct and written policies and procedures regarding the operation of Aventis’ compliance program;
• Implement a comprehensive employee training and education program;
• Hire an independent review organization to review claims submitted to the federal health care programs;
• Establish a confidential disclosure program;
• Restrict employment of ineligible persons;
• Report accurate average sales prices and average manufacturer’s prices for its drugs covered by federal health care programs to 1) the Medicaid programs of those States that have entered into the Settlement Agreement with Aventis and 2) to a commercial drug price reporting service (such as First DataBank, Inc.) designated by any Settlement State pursuant to a related state settlement agreement; and
• Submit a variety of reports to OIG.

ADDITIONAL INFORMATION:

• General Information on CIAs
• Information on OIG Administrative Enforcement Actions

By Noelle C. Sitthikul