DUSA Pharmaceuticals pays $20.75 million to settle whistleblower’s allegations

by Ben Vernia | August 30th, 2020

On August 24, the Department of Justice announced that DUSA Pharmaceuticals, Inc, has agreed to pay nearly $21 million to settle a whistleblower’s allegations that the company provided unapproved instructions for the use of one of its drugs. According to DOJ’s press release:

Massachusetts-based DUSA Pharmaceuticals, Inc. (DUSA), a subsidiary of Sun Pharmaceutical Industries, Inc. (Sun Pharma), has agreed to pay the United States $20.75 million to resolve allegations that DUSA caused physicians to submit false claims to Medicare and the Federal Employee Health Benefit Program by knowingly promoting an administration process for the drug Levulan Kerastick that contradicted the product instructions approved by the U.S. Food and Drug Administration (FDA) and was unsupported by sufficient clinical evidence.

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Levulan Kerastick is a prescription topical solution approved by the United States Food and Drug Administration (FDA) for the treatment of minimally to moderately thick actinic keratosis (AKs) of the face or scalp.  At all relevant times, the “Dosage and Administration” section of the drug’s FDA-approved instructions described a two-stage process involving application of the topical solution to the target lesions and then, following an incubation period of 14 to 18 hours, illumination of the target lesion with blue light.  

The United States alleged that, by January 2014, senior management at both DUSA and Sun Pharma knew that administration of Levulan Kerastick employing short incubation periods ranging from one to three hours resulted in AK clearance rates significantly lower than those achieved in clinical trials using 14 to 18-hour incubation.  Nonetheless, between January 2014 and December 2016, DUSA allegedly encouraged physicians to use these demonstrably less effective short incubation periods by using, among other things, paid physician speaker programs, paid physician peer-to-peer discussions, promotion by DUSA’s sales force, and the dissemination of incomplete or misleading responses to questions from prescribing doctors.  The department further alleged that DUSA failed to inform physicians that administering the drug using short incubation periods resulted in significantly lower AK clearance rates than achieved with the longer incubation period described in the FDA-approved instructions, and, in some instances, the company falsely stated that AK clearance rates were the same for the shorter and less effective incubation periods. 

 As part of the settlement, DUSA and its parent company, Sun Pharma, have agreed to enter into a Corporate Integrity Agreement with HHS-OIG.  That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.

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The company has also agreed to enter into a five-year Corporate Integrity Agreement with the Department of Heath and Human Services Office of Inspector General. DOJ announced that the whistleblower will receive approximately $3.5 million of the settlement (a 16.9% relator’s share).

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