kaléo Inc., a Virginia-based pharmaceutical manufacturer, has agreed to pay the United States $12.7 million to resolve allegations that kaléo caused the submission of false claims for the drug Evzio, an injectable form of naloxone hydrochloride indicated for use to reverse opioid overdose. Evzio was the highest-priced version of naloxone on the market, and insurers frequently required the submission of prior authorization requests before they would approve coverage for Evzio.

The United States alleged that, between March 14, 2017, and April 30, 2020, kaléo directed prescribing doctors to send Evzio prescriptions to certain preferred pharmacies that in turn (1) submitted false prior authorization requests for Evzio that misrepresented to insurers that the prescribing physicians submitted the request when the pharmacies did so and/or contained false or misleading assertions about the patients’ medical histories, such as false statements that patients had previously tried and failed less costly alternatives to Evzio, and (2) dispensed Evzio without collecting or attempting to collect co-payment obligations from government beneficiaries.

The United States contends that kaléo knew of or deliberately ignored this pharmacy misconduct, but nevertheless kept directing business to these pharmacies. The United States also alleged that kaléo provided illegal remuneration to prescribing physicians and their office staff in violation of the Anti-Kickback Statute to induce and reward their prescribing of Evzio.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Rebecca Socol, a former employee of kaléo. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of the resolution with kaléo, Ms. Socol will receive $2,548,600 of the settlement amount. The qui tam case is captioned United States ex rel. Socol v. kaléo, Inc., 18-cv010050-RGS (D. Mass.) (under seal).

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the HHS OIG; DCIS; OPM OIG; the FBI; and the U.S. Postal Service Office of Inspector General.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was handled by Trial Attorney Sarah Arni and Assistant U.S. Attorneys David Derusha and Abraham George.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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