Less than two months after outlining its intent to target executives entwined in corporate fraud schemes, the Department of Justice (DOJ) arrested a pharmaceutical executive and charged him with paying kickbacks to physicians.
Warner Chilcott PLC, which was acquired by Allergan in 2013, agreed Thursday to plead guilty to kickback charges and pay $125 million in civil and criminal fines for paying physicians to prescribe certain drugs manufactured by the company, according to the DOJ. Between 2009 and 2013, the company provided payments for "Medical Education Events," along with dinners, lunches and receptions at expensive restaurants. The company also paid physician "speakers" who did not actually speak about the drugs.
In a surprising twist, federal agents also arrested the president of Warner Chilcott, Carl Reichel, according to the Wall Street Journal. Prosecutors allege that Reichel was the one who influenced sales representatives to provide physicians with meals and speaking fees to entice them to prescribe certain drugs.
Reichel pleaded not guilty Thursday, but the enforcement action was met with applause from anti-fraud advocates.
"This is a red letter day for integrity," Patrick Burns, head of Taxpayers Against Fraud Education Fund, told the WSJ. "This needs to happen more often."
In September, the DOJ issued a memo indicating it would prosecute individuals entwined in corporate fraud schemes, following previous remarks from the assistant attorney general that the government would be targeting healthcare executives engaged in fraud. Still, Reichel's arrest represents a rare enforcement action taken by the agency that has allowed pharmaceutical companies to enter multi-million dollar settlements to avoid fraud prosecutions.
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Without accountability, pharma will happily keep dishing out kickback settlements