Pharmaceutical Manufacturer Assertio Therapeutics Inc. Agrees to Pay $3.6M to Resolve Allegations that It Violated the False Claims Act in Connection with Marketing its Fentanyl Product

The Justice Department announced today that Assertio Therapeutics Inc., formerly known as Depomed Inc., (Assertio), a pharmaceutical company headquartered in Lake Forest, Illinois, has agreed to pay $3.6 million to resolve claims that Assertio violated the False Claims Act (FCA) by causing the submission of false claims for the transmucosal immediate-release fentanyl (TIRF) drug Lazanda for individuals who did not have breakthrough cancer pain.

Lazanda, a fentanyl nasal spray, is approved by the FDA solely for break-through cancer pain in patients who are already receiving and who are tolerant to opioid therapy for their underlying persistent cancer pain. The United States alleges that, between 2013 and 2017, Assertio, which was known as Depomed at the time, caused the submission of false claims to the Medicare and TRICARE programs by focusing its marketing on pain specialists who were prescribing high volumes of TIRF products, including those who were flagged for diversion or who were later indicted. The United States further alleges that Assertio placed high-volume TIRF prescribers on its speakers’ bureau and advisory boards and developed its “Signature Support Program” to ensure that Lazanda prescriptions would be approved by insurance companies, including Medicare Part D plans. The United States contends that Assertio’s marketing efforts caused prescribers to write Lazanda prescriptions for Medicare and TRICARE beneficiaries who did not have breakthrough cancer pain, resulting in the submission of false claims to Medicare and TRICARE from thirteen high-volume prescribers.

“This company took steps to boost its profits despite the risk of boosting the deadly opioid epidemic, said U.S. Attorney Edward R. Martin Jr. for the District of Columbia. “Our office will continue to seek out violations like this that demonstrate a brazen disregard for the safety of the public.”

“At a time when communities across the country are still dealing with the devasting impact of the opioid epidemic, pharmaceutical companies have a responsibility to uphold the highest standards of integrity,” said Acting Assistant Director Darren Cox of the FBI’s Criminal Investigative Division. “This settlement reflects the FBI’s unwavering commitment to protecting public health and holding those accountable who fuel addiction and defraud federal healthcare programs through deceptive marketing of powerful drugs like fentanyl.”

“Violations of the False Claims Act such as the illegal prescribing practices alleged in this settlement are especially egregious considering the opioid epidemic,” said Deputy Inspector General Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work with our law enforcement partners to ensure health care providers and corporations involved in schemes that threaten patient safety are held accountable.”

The civil settlement includes the resolution of claims under the qui tam, or whistleblower, provisions of the FCA by Noelle Webb and Nicole Novellino, who previously worked at Assertio as sales representatives. The FCA authorizes private parties to sue on behalf of the United States for false claims and share in any recovery. The qui tam case is captioned United States ex rel. Webb et al. v. Assertio Therapeutics Inc., f/k/a Depomed, Inc., No. 1:17-02309 (D.D.C.). Pursuant to the settlement, relators will receive a $657,000 share of the settlement amount.

The Justice Department’s Civil Division, Commercial Litigation Branch (Fraud Section), and the U.S. Attorney’s Office for the District of Columbia handled this matter. The Federal Bureau of Investigation, led by its Washington Field Office; the Food and Drug Administration’s Office of Criminal Investigations; and the Department of Health and Human Services Office of Inspector General provided substantial assistance in the investigation and resolution.

Today’s settlement illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the FCA. 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).

Senior Trial Counsel Sarah Arni, Trial Attorney Matthew Arrow, and Assistant Director Natalie Waites of the Civil Division’s Fraud Section and Assistant U.S. Attorney Darrell Valdez for the District of Columbia handled this matter.

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