Benicar Settlement Results in $39M Payment by Daiichi Sankyo Over Kickbacks

Daiichi Sankyo has agreed to pay $39 million to settle charges that it illegally paid kickbacks to doctors who prescribed the blockbuster blood pressure medication Benicar, as well as similar medications. 

The Federal Bureau of Investigation announced the Benicar kickback settlement on January 9, indicating that the payments will resolve allegations that Daiichi Sankyo violated the False Claims Act and committed Medicare fraud by paying doctors who prescribed Benicar, Azor, Tribenzor, and Welchol with lavish meals and payments for speeches promoting the drugs.

According to the FBI and the U.S. Department of Justice, the kickbacks occurred between January 1, 2004 and March 31, 2011, in the form of honoraria payments, meals and other incentives that occurred as part of its Physician opinion & Discussion program and other programs.

Law enforcement officials say Daiichi Sankyo even paid doctors when they only spoke to their own staff in his or her own office or even their own wives. They also paid doctors for speaking engagements that never actually happened, according to the allegations.

Investigators say the company also paid the doctors through lavish meals which even sometimes exceeded the company’s own policy limiting such meals to $140 per person.

“Drug companies are prohibited from using lavish entertainment and padded speaker program payments to induce physicians to prescribe their drugs for beneficiaries of federal health care programs,” U.S. Attorney for the District of Massachusetts Carmen M. Ortiz said in the FBI press release. “Settlements like this one show that the government will continue to pursue health care companies that use kickbacks to promote their products.”

In addition to the $39 million settlement agreement, Daiichi Sankyo has also entered into a Corporate Integrity Agreement to make internal compliance reforms over the next five years.

Benicar Lawsuits Over Failure to Warn

The Benicar settlement is the latest in a continuing series of problems for Daiichi Sankyo involving their blockbuster blood pressure drug.

The programs ended about a year before a study published by the Mayo Clinic provided the first information for consumers about the potential link between Benicar and chronic diarrhea or other symptoms similar to celiac disease.

That research was followed by an FDA warning issued in July 2013, which informed consumers and the medical community that side effects of Benicar may cause sprue-like enteropathy to develop months or even years after first use of the medication, resulting in symptoms like chronic diarrhea, weight loss and other gastrointestinal injuries. The warnings were applied to Benicar and other blood pressure medications sold by Daiichi Sankyo that contain the active pharmaceutical ingredient olmesartan, including Benicar HCT, Azor and Tribenzor.

Over the past year, Daiichi Sankyo has faced a growing number of Benicar lawsuits filed by individuals throughout the U.S., which allege that the drug maker knew or should have known about the risk of sprue-like enteropathy for years, yet withheld information from the medical community and failed to warn consumers that chronic diarrhea and other symptoms may be caused by use of the medications.

In many cases, plaintiffs involved int he lawsuits indicate that they have repeatedly been hospitalized on Benicar because doctors were unaware that the symptoms may be caused by their blood pressure medication. The Benicar problems have often been misdiagnosed as Celiac disease or unclassified sprue, resulting in continued use of the medication, which could leave users with long-term intestinal damage.

Although the diarrhea symptoms associated with sprue-like enteropathy typically resolve when the medication is no longer used, the problems can cause permanent damage to the intestines, known as villous atrophy from Benicar.

A motion was filed last month seeking to consolidate the Benicar litigation in the federal court system, centralizing the cases before one judge for coordinated pretrial proceedings and a series of early test trials to gauge how juries may respond to certain evidence and testimony that may be repeated throughout the litigation. If the request is granted, lawsuits filed in U.S. District Courts nationwide will be transferred in a multidistrict litigation (MDL). However, if Benicar settlements or another resolution for the litigation is not reached following pretrial proceedings, Daiichi Sankyo could face hundreds of individual trials throughout the country.