Hagens Berman Blog

Whistleblower News: Mallinckrodt, Options Clearing Corporation, Opioids, Vaping

by HB Whistleblower Legal Team

09/05/2019

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Drug Maker Mallinckrodt Agrees to Pay Over $15 Million to Resolve Alleged False Claims Act Liability for “Wining and Dining” Doctors

Pharmaceutical company Mallinckrodt ARD LLC (formerly known as Mallinckrodt ARD Inc. and previously Questcor Pharmaceuticals Inc. "Questcor"), has agreed to pay $15.4 million to resolve claims that Questcor paid illegal kickbacks to doctors, in the form of lavish dinners and entertainment, to induce prescriptions of the company’s drug, H.P. Acthar Gel (Acthar) from 2009 through 2013.

The allegations that are the subject of yesterday’s settlement were originally alleged in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act.  The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery.  The act also permits the government to intervene in such actions, as the government previously did in the two whistleblower cases.  The whistleblowers will receive approximately $2.926 million of the settlement.  The government is continuing to pursue claims in these two matters alleging that Mallinckrodt violated the False Claims Act by using a foundation as a conduit to pay illegal kickbacks in the form of copay subsidies for Acthar.  These claims are not being resolved by the settlement. read more »

SEC and CFTC Charge Options Clearing Corp. With Failing to Establish and Maintain Adequate Risk Management Policies

OCC to Pay Combined $20 Million Penalty

The Securities and Exchange Commission and the Commodity Futures Trading Commission today announced that the Options Clearing Corporation (OCC) will undertake remedial efforts and pay $20 million in penalties to settle charges that it failed to implement policies to manage certain risks as required by U.S. laws and SEC and CFTC rules.

According to the SEC’s and CFTC’s respective orders, Chicago-based OCC failed to establish and enforce policies and procedures involving financial risk management, operational requirements, and information-systems security.  The SEC’s order also found that OCC changed policies on core risk management issues without obtaining required SEC approval.

As the U.S.’s sole registered clearing agency for exchange-listed option contracts on equities, OCC was designated in 2012 as a systemically important financial market utility, or SIFMU. read more »

J&J, Walgreens, and Others Must Face Lawsuits Claiming Conspiracy to Push Opioids, Judge Rules

Johnson & Johnson, Cardinal Health, and other makers and distributors of opioid painkillers must face lawsuits claiming they banded together to wrongfully push sales of the addictive pills, a judge ruled as the first federal trial over the medicines looms next month.

U.S. District Judge Dan Polster ruled Tuesday that juries must decide whether to hold companies like pharmacy chain Walgreens Boots Alliance liable for undertaking “coordinated efforts” to commit “unlawful acts” in the marketing, delivering, and selling of opioids. read more »

Amid Vaping Crackdown, Michigan to Ban Sale of Flavored E-Cigarettes

Gov. Gretchen Whitmer of Michigan said Wednesday that she would outlaw the sale of flavored e-cigarettes in her state, part of a national crackdown on vaping amid a recent spike in illnesses tied to the products.

Ms. Whitmer, who would become the nation’s first governor to issue such a ban, said the decision came in response to increased e-cigarette use among teenagers and marketing that she said targeted youths. Dr. Joneigh Khaldun, the state’s chief medical executive, called youth vaping a public health crisis.

“Companies selling vaping products are using candy flavors to hook children on nicotine and misleading claims to promote the belief that these products are safe,” Ms. Whitmer, a Democrat, said in a statement. “That ends today.” read more »