DOJ Recovers $694.5 Million From Merck, Cephalon & Kyphon

Industry groups report that the Department of Justice recovered a whopping $694.5 million in settlements from a medical device manufacturer and two pharmaceutical companies during FY 2008.

"Merck paid $361 million to resolve allegations that it knowingly failed to pay proper rebates to Medicaid and other government healthcare programs, and also used illegal incentives to persuade healthcare providers to prescribe its products. The lawsuits revolved around the selling practices of three Merck drugs: Zocor, Vioxx and Pepcid.

Cephalon paid $258 million to resolve claims related to off-label marketing, and the subsequent charges made to federal health insurance programs like Medicare, Medicaid and others.

Kyphon Inc., now Medtronic Spine LLC, paid $75 million to settle lawsuits for knowingly causing the submission of false claims to Medicare for its kyphoplasty procedure. The lawsuit alleged that Kyphon persuaded hospitals to perform the minimally invasive surgery on an inpatient basis, rather than for the more appropriate (and less costly) outpatient treatment." Read more.