Cardinal Health pays $8 million to settle kickback qui tam`

by Ben Vernia | April 21st, 2011

On April 21, the Department of Justice announced that Cardinal Health, Inc., has agreed to pay $8 million to settle False Claims Act charges that it paid kickbacks to induce the purchase of prescription drugs. According to DOJ’s press release:

Cardinal Health Inc. has agreed to pay the United States $8 million to resolve claims that it violated the False Claims Act by making payments to induce referral orders for its prescription drugs in violation of the Anti-Kickback Statute, the Justice Department announced today.

Today’s settlement with the Dublin, Ohio-based pharmaceutical distributor resolves a lawsuit filed by former pharmacy owner R. Daniel Saleaumua and pharmacy consultant Kevin Rinne under the qui tam, or whistleblower provisions, of the False Claims Act. Mr. Saleaumua alleged that Cardinal paid him $440,000 in exchange for an agreement that he purchase from Cardinal prescription drugs for his pharmacies. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. Together, Saleaumua and Rinne will receive $760,000 as their share of the government’s recovery.

The relators’ share is only 9.5% of the recovery, although the False Claims Act provides for 15-25% in cases in which the government intervenes. The press release does not explain why the number is lower than 15%.

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