Drug Company Settles Whistleblower Suit for $4 Million

By Daniel Hawn

Published on March 28, 2008

The U.S. subsidiary of Otsuka Pharmaceutical Co. Ltd. agreed Thursday to pay $4 Million to resolve a whistleblower lawsuit filed by physician Joseph Piacentile.

The lawsuit alleged that between 2002 and 2005, Otsuka marketed its schizophrenia drug Abilify for use in children and for the treatment of dementia-related psychosis in elderly patients. Neither of these uses has been approved by the FDA.

While doctors are free to prescribe medications for uses that haven't been FDA approved, pharmaceutical companies are not allowed to market drugs for such "off-label" purposes.

An Otsuka spokeswoman said the company takes compliance with the law very seriously and is glad to have settled the lawsuit.

According to the settlement, Otsuka will pay $2.3 million to the federal government and $1.7 million to state Medicaid programs.

For his role in the lawsuit, Piacentile will receive approximately $348,000 of the federal portion of the settlement, and an additional amount from the Medicaid portion.

Under the federal False Claims Act, citizens are allowed to file lawsuits against companies allegedly engaged in fraud against the government. If the government wins the suit, the person who filed the claim is entitled to a share of any damages recovered.

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