NC Attorney General announces $40 Million Whistleblower Settlement

By Martin & Jones on February 6, 2014

North Carolina Attorney General Roy Cooper, on February 3, 2014, announced a multi-state and federal settlement with a medical device manufacturer that engaged in improper marketing and the payment of illegal kickbacks. CareFusion will pay $40.1 million to resolve allegations it improperly promoted and marketed its surgical preparation solution Chloraprep and concealed kickbacks to a physician who promoted the drug. The State of North Carolina will receive $581,363.13 to resolve allegations that CareFusion defrauded the state’s Medicaid program.

CareFusion purportedly promoted and marketed Chloraprep for uses that had not been approved by the U.S. Food and Drug Administration (FDA). CareFusion improperly promoted the surgical preparation solution for use with intravenous preparation and suture care, even though the FDA had specifically rejected Chloraprep for those uses. The company also improperly entered into agreements to make payments to Healthcare Concepts, Inc. to promote Chloraprep to other healthcare providers. The misconduct on the part of CareFusion resulted in false and/or fraudulent claims being submitted to government-funded healthcare programs, such as Medicaid.