Ivax Pharmaceuticals to Pay $14 Million to Resolve False Claims Act Lawsuit

Ivax Pharmaceuticals enters into a settlement agreement with the United States to resolveFalse Claims Act allegations. Shelley R. Slade, attorney for qui tam plaintiff David Kammerer, comments on the policy concerns and implications of the settlement.

Vogel, Slade & Goldstein, LLP announced today that the United States and the law firm’s client, David Kammerer, have entered into a settlement agreement with Ivax Pharmaceutical, Inc., a manufacturer of generic drugs, to resolve kickback allegations in a qui tam lawsuit filed by Mr. Kammerer. The United States intervened in Mr. Kammerer’s qui tam action, captioned U.S. ex rel. Kammerer, et al. v. Ivax, et al. (Civil Action No. 05-11519-RGS), which is pending in United States District Court in Massachusetts, in December 2008. Mr. Kammerer is a financial analyst who was employed by Omnicare at corporate headquarters between 1997 and 2002. He alleged in his suit that Ivax paid an up-front payment of $8 million in exchange for Omnicare’s agreement to purchase certain generic drugs exclusively from Ivax once the patents on the drugs’ brand name equivalents had expired.

To resolve Mr. Kammerer’s allegations, which were asserted on behalf of the United States and eighteen states, Ivax will pay $14 million, plus interest. Shelley R. Slade attorney to Mr. Kammerer, explained the policy concerns advanced by today’s settlement of the case against Ivax:

“Multi-year kickback schemes that lock in a pharmacy’s purchases of generic drugs in favor of just one generic drug manufacturer are dangerous to patient health. While generic drug manufacturers use the same chemical formula to make any given generic drug, these manufacturers have widely varied track records on the quality of their manufacturing, testing, shipping and storage – each of which can significantly impact the integrity of the final product. Pharmacies should take these key quality indicators into account when choosing which generic drug to purchase – without their hands being tied by prior kickback arrangements.”

Ms. Slade, attorney for Mr. Kammerer, commented: “We hope that today’s settlement, when coupled with the string of recent FCA settlements against companies engaging in similar misconduct, will begin to drive home the message to pharmaceutical manufacturers that they must not continue to sacrifice patient well-being to their bottom line.”

Mr. Kammerer is represented by Shelley R. Slade and Robert L. Vogel of Vogel, Slade & Goldstein, LLP, a law firm that specializes in handling False Claims Act qui tam lawsuits nationwide.