DOJ Settles with Maker of Overdose-Reversing Drug

On Tuesday the Department of Justice reported a settlement agreement with Kaleo Inc., in connection with allegations that they caused false claims for an anti-overdose drug to be submitted.

According to the press release, Kaléo Inc. is a Virginia-based pharmaceutical manufacturer who created and marketed the drug Evzio. Evzio is a formulation of naloxone hydrochloride which is used to neutralize opioids and reverse an opiod overdose.

Evzio is one of the higher priced opioid overdose drugs, which results in many insurance companies requiring proof that lower cost options were ineffective or not medically indicated prior to granting authorization for the higher cost option.

The United States alleged that Kaléo directed prescribers to send their prescriptions to certain pharmacies. These pharmacies then submitted falsified data regarding the medical history and other requirements to obtain authorization for the treatments. The pharmacies also did not collect co payments from government beneficiaries, encouraging these beneficiaries to patronize those specific pharmacies due to the lower cost. Kaléo was accused of encouraging and favoring these schemes, as well as providing direct remuneration to the prescribers in violation of the Anti-Kickback Statute.

Kaléo has agreed to settle these accusations in exchange for a direct payment of $12.7 million. The settlement also resolves a qui tam action ongoing in Massachusetts. No admission of culpability was included in the settlement.