2011 Annual Report - Virginia Attorney General

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2011 REPORT OF THE ATTORNEY GENERAL
assigned those personal care aides to care for Medicaid patients in their homes. As a
result, from October 2007 through June 2010, HCVA billed and was paid Medicaid
funds for non-certified, untrained personal care aides placed with Medicaid patients.
HCVA was sentenced to three years probation, a fine of $10,000 and ordered to pay
$323,420 in restitution. McElwain was sentenced to sixteen months in prison,
followed by a three-year term of supervised release.
In addition to obtaining significant criminal recoveries, MFCU also settled
several noteworthy civil matters. One case was a settlement involving Forest
Laboratories, Inc. and Forest Pharmaceuticals, Inc., (together, Forest) in which
MFCU played a leading role in the investigation and negotiation of the settlement
recovery on behalf of the states. The National Association of Medicaid Fraud Control
Units (NAMFCU) appointed a global case team led by counsel from Virginia, AAG
Lelia Winget-Hernandez, to negotiate a multimillion dollar settlement on behalf of the
Medicaid participating states. The underlying investigation was based on several qui
tam civil actions filed in federal district courts and state courts across the country.
The state Medicaid settlement resolved civil liability against Forest for its efforts to
illegally market the prescription drugs Celexa and Lexapro for off-label uses (both
drugs are approved by the Food and Drug Administration as antidepressants), and
illegal distribution of Levothroid based on the company's increased distribution of the
drug after it was no longer classified as a covered outpatient drug within the meaning
of 42 U.S.C. § 1396r-8(k)(2). The civil settlement released Forest from civil liability
based on the company’s illegal marketing and kickback schemes to promote Celexa
and Lexapro and the illegal distribution of Levathroid. The total civil settlement was
$149.1 million, of which $131,140,212 was designated as the recovery to the
Medicaid program, including federal and state shares. The total recovery to the state
share of the Medicaid program was $60,324,497.48. The final settlement to the
Commonwealth of Virginia was $1,003,703.90, including interest. In addition to a
civil recovery, Forest pleaded guilty to violation of 18 U.S.C. § 1505 in that the
company corruptly endeavored to influence, obstruct, and impede an agency
proceeding; violations of 21 U.S.C. §§ 331(a), 333(a)(1), 352(f)(1) for introducing an
unapproved drug, Levothroid, into interstate commerce; and violations of 21 U.S.C.
§§ 331(a), 333(a)(1), 352(f)(1) for introducing a misbranded drug, Celexa, into
interstate commerce.
MFCU also expects to participate in a settlement involving a $950 million
recovery for the United States and the participating states based on an investigation
involving Merck Sharp & Dohme Corp. (Merck). The NAMFCU-appointed global
case team worked with the Department of Justice and the states to negotiate a
settlement with Merck on behalf of the state Medicaid programs. Once the agreement
is finalized, the state Medicaid settlement will resolve civil liability against Merck for
its practices to market Vioxx for unapproved uses resulting in payment of Medicaid
reimbursements for the drug. Specifically, the civil Medicaid settlement will resolve
civil liability against the company for improperly engaging in practices designed to
market, advertise and promote Vioxx for treatment of rheumatoid arthritis, a
condition that Vioxx is not approved by the Food & Drug Administration to treat.
Moreover, the settlement will resolve civil liability against the company for
improperly promoting the cardiovascular safety of Vioxx based on improper
statements and misleading promotional materials. Based on the state Medicaid