By the Constantine Cannon Whistleblower Team
On April 29, the Department of Justice (DOJ) announced that California-based pharmaceutical giant Gilead Sciences agreed to pay $202 million to settle charges of violating the False Claims Act and Anti-Kickback Statute. Specifically, the government alleged Gilead provided financial inducements to physicians to speak at or attend sham medical conferences to induce them to prescribe various Gilead HIV drugs. This is the latest in a string of False Claims Act cases the government has brought targeting kickbacks designed to influence medical decision making.
Gilead Paid Physicians to Prescribe Gilead HIV Drugs
The Anti-Kickback Statute prohibits paying or receiving kickbacks in exchange for patient referrals covered by Medicare/Medicaid or other government healthcare programs. It is designed to prevent tainted medical decisions, unnecessary medical treatment, overutilization of medical services, increased program costs, and unfair competition. It covers virtually any form of consideration in exchange for referrals and broadly applies across the healthcare industry. It can even apply to inducements to patients (such a co-pay waivers) to influence their medical choices. Anti-Kickback Statute violations are typically treated as automatic False Claims Act violations.
The Gilead settlement involved very expensive HIV drugs with Medicare typically paying more than $1,000 for a one-month supply. To promote and maximize the sales of these pricey drugs, Gilead held regular “HIV Speaker Programs” where healthcare providers who treat HIV gathered to discuss Gilead’s HIV drugs and other HIV-related subjects. While Gilead held these programs out as educational in nature, they were really designed as a vehicle to provide kickbacks to the participating physicians to induce them to prescribe Gilead’s HIV drugs.
According to the Government, Gilead’s scheme resulted in Medicare and other Government healthcare programs paying out millions of dollars in reimbursement for tainted prescriptions. Here are some of the key facts Gilead admitted to as part of the settlement:
Gilead paid many high-volume prescribers hundreds of thousands of dollars in honoraria to prepare and present as HIV speakers.
Gilead paid travel costs for programs regularly held at desirable destinations like Hawaii, Miami, and New Orleans, sometimes selected by the speakers.
Gilead held many of the programs at high-end restaurants across the country.
Gilead repeatedly invited physicians and other healthcare providers to attend the same HIV program, covering the exact same topic, often within a short period of time. In fact, more than 250 heavy prescribers of Gilead HIV drugs attended Gilead programs on the same topic at least three times within a six-month period.
Many of Gilead’s speakers also attended Gilead’s HIV dinner programs on the same topic, often within a short time after speaking and with the same group of doctors.
Stopping Illegal Kickbacks Remains a DOJ Priority
Strictly enforcing the Anti-Kickback statute has consistently been a top DOJ enforcement priority. As DOJ stressed in its 2024 False Claims Act Roundup, illegal kickbacks “undermine the integrity of federal health care programs by tainting medical decision-making, increasing health care costs, and adversely affecting competition.”
While there has been a definite change in priorities in the heavily influenced Trump DOJ, it seems apparent that the Government’s commitment to go after healthcare kickbacks remains strong. The Government made this clear in announcing the Gilead settlement, holding it out as a warning to other companies to stay away from engaging in similar misconduct:
“For years, Gilead unlawfully sought to increase sales of its HIV drugs, by using its speaker programs to funnel kickbacks to doctors. As alleged, Gilead spent tens of millions of dollars on these programs, including over $20 million in speaking fees and millions more in exorbitant meals, alcohol and travel, all in an effort to induce doctors to prescribe Gilead’s HIV drugs and drive up sales. With this settlement, Gilead has taken responsibility for its conduct and agreed to pay a significant financial penalty. The message is clear, companies that illegally drain taxpayer dollars from federal healthcare programs will be held accountable.”
Notably, only two days after the settlement, DOJ announced (on May 1) another major False Claims Act kickback case. This one against three of the nation’s largest health insurance companies – Aetna, Elevance Health, and Humana – for allegedly paying hundreds of millions of dollars in illegal kickbacks in exchange for Medicare Advantage enrollments. In announcing the action, Deputy Assistant Attorney General repeated the Government’s anti-kickback mantra: “Health care companies that attempt to profit from kickbacks will be held accountable.”
Whistleblowers Are Critical to Uncovering Illegal Kickbacks
Both this newly filed action and the Gilead action were originated by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring lawsuits on behalf of the government against those that defraud the government. In return, successful whistleblower can receive up to 30% of the Government’s recovery. Over the past thirty years, whistleblowers have received close to $10 billion in awards under the statute and have been responsible for originating the majority of False Claims Act cases.
The role of whistleblowers in helping the Government uncover illegal kickback schemes is particularly important given the sophisticated means healthcare providers and physicians use to conceal these schemes. Constantine Cannon whistleblower partner Gordon Schnell notes why whistleblowers are so important in this enforcement area.
“With heavy Government enforcement in this area, healthcare companies are taking to ever-more sophisticated schemes to disguise their improper financial inducements. Without those on the inside with first-hand knowledge of these schemes, the Government has no easy way to identify and take action against them.”
According to Schnell, that is why virtually all False Claims Act kickback cases these days are originated by whistleblowers.
Constantine Cannon Represents Kickback Whistleblowers
Constantine Cannon has substantial experience representing kickback whistleblowers under the False Claims Act. Most recently, we represented the whistleblower who helped DOJ secure a $34 million settlement against dialysis giant DaVita for allegedly paying physicians for referring patients to DaVita’s dialysis centers. Our client received an award of roughly 18.5% of the Government’s recovery.
If you would like to learn more about our work representing kickback whistleblowers or think you have information on potential kickback violations, please don’t hesitate to contact us. We will connect you with an experienced member of our whistleblower team.
DOJ Press Release (Health Insurers)
What It Means to Be a Whistleblower
Read Gilead Pays $202M to Settle False Claims Act Kickback Charges at constantinecannon.com
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