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Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians

This is not a Texas company, but it is a good example of how some manufacturers try to cloak improper payments under the veil of legitimate compensation.

The device manufacturer paid millions of dollars in “advertising assistance, practice development, practice support, and purported unrestricted educational grants” directly to local healthcare providers to induce sales of their products. Moreover, these inducements were only paid to select providers to reward them for past sales. The press release highlights the fact that the manufacturer’s compliance officer warned them of the practice, but those warnings went unheeded.

This matter started as a qui tam (Whistleblower) action under the False Claims Act by the former chief compliance officer of the company.

Source: Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians

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Professional Relators Have No Right to Sue for Beneficial Conduct

The Seventh Circuit determined that professional qui tam relators formed as “investment vehicles for financial speculators” should not be allowed to challenge conduct determined by the government likely to be lawful, and definitely beneficial to the government and the public.

The court creates a new standard for dismissal, joining the standards articulated in Sequoia Orange and Swift. Under the new standard, “[t]he Government may dismiss the action without the relator’s consent if the relator receives notice and opportunity to be heard.”

Source: United States ex re. Cimznhca, LLC v. UCB, Inc.