Sanofi-Aventis U.S. Inc. and Sanofi-Aventis U.S. LLC (collectively “Sanofi US”), two subsidiaries of French pharmaceutical company Sanofi, have agreed to pay $109 million to settle a qui tam lawsuit. The settlement resolves allegations that Sanofi US violated the False Claims Act in connection with the drug Hyalgan, a knee injection used to treat osteoarthritis knee pain.
The allegations were first made by former Sanofi US sales representative Mark Giddarie in 2010. Giddarie filed an action under the qui tam provisions of the False Claims Act alleging that Sanofi US gave doctors free samples of Hyalgan to induce them to prescribe the knee injections for their patients, in violation of the Anti-Kickback Statute. The government alleged that, in addition to the free Hyalgan samples, Sanofi US sales representatives regularly treated the physicians and their staff to lavish meals at Sanofi US’s expense.
The whistleblower also alleged that Sanofi-US falsified the average sales price for Hyalgan by not taking into consideration the free units. The government uses average sales prices of drugs to set reimbursement rates. The inaccurate price reports caused Medicare, Medicaid and other government health care programs to pay inflated amounts for the drugs.
The government contends that the free samples given along with the purchased Hyalgan resulted in a lower average price to the physicians. Because government insurance programs reimbursed physicians the same amount for Hyalgan and its direct competitor, medical practices that purchased the lower priced option, received a greater reimbursement profit.
The whistleblower will receive $18.5 million of the settlement amount as his reward under the qui tam provisions.