The U.S. Justice Department filed a case against Lance Armstrong and his company Tailwind Sports last week, alleging that Armstrong and Tailwind defrauded the U.S. Postal Service (USPS) out of millions of dollars in connection with the sponsorship of his cycling team. The complaint, which was filed in U.S. District Court for the District of Columbia, alleges that Armstrong’s use of prohibited drugs constitutes a breach of contract with the USPS, whereby the USPS paid approximately $40 million to sponsor the USPS cycling team from 1998 to 2004. Armstrong and Tailwind Sports could be liable for more than $100 million in damages, however, since the federal government intervened under the False Claims Act, which provides for treble damages.
The U.S. Department of Justice announced last week that it is intervening in a qui tam whistleblower suit against Novartis Pharmaceuticals Corporation brought under the False Claims Act. The lawsuit’s claims accuse Novartis’ Cardiovascular Diseases Division of fraudulently billing Medicare, Medicaid, TRICARE, and other federal and state-funding healthcare programs in connection with kickback schemes involving various drugs, including Lotrel, Valturna, and Starlix. Pursuant to a “pay to play” scheme, Novartis allegedly paid off doctors who prescribed its drugs.
This is not the first time Novartis has found itself the subject of alleged healthcare fraud violations. In September 2010, Novartis agreed to pay approximately $422 million in criminal and civil fines and penalties to resolve claims that it had illegally marketed and paid kickbacks in connection with the drugs Trileptal, Diovan, Zelnorm, Sandostatin, Tekturna, and Exforge.
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