Fentanyl Qui Tam Settlement for $9 Million
Eric L. Young of Young Law Group, P.C., announced today that private equity firm Belhealth Investment Partners, its principals, and their portfolio companies, Linden Care and Quick Care, have agreed to pay $9 Million to settle alleged False Claims Act violations in a qui tam complaint first filed by YLG in 2016.
After the Department of Justice declined to intervene in the case, YLG was joined by Kang Haggerty, LLC, Richard J. Hollawell & Associates, and Miller Shah, LLP, in successfully resolving claims alleging that Defendants unlawfully distributed Subsys, a potent, rapid-onset fentanyl sublingual spray, in violation of the Controlled Substances Act.
YLG filed the original qui tam complaint against Insys Therapeutics, Inc. and Linden Care LLC in 2016. The government intervened in this case in 2018 only as to the claims against Defendant Insys, the well-known defunct manufacturer of Subsys. YLG and Kang Haggerty’s amended complaint alleged that between 2013 through at least 2016, mail order specialty pharmacies Linden Care and Quick Care, under Belhealth’s control and direction, dispensed thousands of Subsys prescriptions nationwide to government healthcare programs for widespread off-label and non-medically accepted uses, despite the known high potential for abuse of the drug.
“The egregiousness of defendants’ misconduct motivated us to aggressively pursue the case against Linden Care and Belhealth despite the Government’s decision not to intervene in the case,” said Eric L. Young. Young added, “This case serves as a tragic reminder of how corporate greed has fueled the opioid epidemic that has devastated the lives of so many Americans and their families.”
Young emphasized that, in recent years, qui tam plaintiffs have increased efforts to hold private equity firms accountable under the False Claims Act. “Thankfully, False Claims Act plaintiffs, including the Department of Justice, may be more likely to pursue cases against private equity firms when there is evidence that the firm was actively involved in the company’s day-to-day operations, knew about the alleged fraud, but did nothing to stop it. We are pleased that the successful outcome of our case will provide additional legal support for these efforts”, Young stated.
The case is captioned United States ex rel. Jane Doe v. Insys Therapeutics, No. 2:16-cv-7937-JLS-AS (C.D. Cal.).
Other Fentanyl Qui Tam Cases of Note
- United States v. Insys Therapeutics
In June of 2019, Opioid manufacturer Insys Therapeutics agreed to pay $225 million settle civil and criminal allegations related to its marketing of Subsys, a fentanyl-based pain medication. Pleading guilty to 5 counts of mail fraud, the company was fined $2 million and $28 million in forfeiture. For their civil fine, Insys agreed to pay $195 million, bringing the total amount to $225 million.Insys was accused of engaging in illegal marketing practices of paying kickbacks and bribes to healthcare providers in order to increase sales for Subsys. - United States v. Mallinckrodt ARD LLC
In 2017, the Department of Justice announced that the pharmaceutical manufacturer Mallinckrodt ARD LLC agreed to pay $35 million to settle allegations that it violated the False Claims Act by failing to report suspicious orders of controlled substances, including fentanyl. Mallinckrodt was accused of supplying overly excessive amounts of opioids to pharmacies that were engaging in diversion and illegal distribution.In 2022, Mallinckrodt settled for $260 million for alleged underpayments of Medicaid drug rebates for the drug H.P. Acthar Gelas well as more illegal kickbacks. - United States v. Purdue Pharma
Although not specifically a fentanyl qui tam case, it is worth mentioning the high-profile litigation involving Purdue Pharma, the manufacturer of OxyContin, which is an opioid medication. In recent years, there have been numerous lawsuits and legal actions against Purdue Pharma, alleging deceptive marketing practices that contributed to the opioid crisis. While fentanyl is not the focus of these cases, they are relevant to the broader issue of opioid abuse and pharmaceutical misconduct.