Victory Pharma to Pay $11.4 Million in Kickbacks Probe

Victory Pharma Inc., a San Diego, California-based pharmaceutical company, will pay $11.4 million to resolve claims it paid kickbacks to doctors to induce them to write prescriptions for Victory’s products.

Under a deferred prosecution agreement, Victory Pharma will avoid criminal and civil liability for alleged kickback and false claims violations in its marketing of Naprelan, Xodol, Fexmid and Dolgic, the U.S. Justice Department said today in a statement.

The kickbacks included tickets to professional and collegiate sporting events, tickets to concerts and plays, dinners at expensive restaurants and spa, golf and ski outings, according to the statement. The settlement also resolves claims Victory improperly used sales representatives’ “shadowing” of doctors in their offices to induce doctors to prescribe the company’s products, according to the statement.

“Kickback schemes undermine the integrity of medical decisions, subvert the health marketplace and waste taxpayer dollars,” Stuart F. Delery, a Justice Department deputy assistant attorney general, said in the statement. “We will continue to hold accountable those who refuse to play by the rules and provide illegal incentives to influence the decision making of health care providers.”

In July 2011, Shionogi Inc., the U.S.-based unit of Japan’s Shionogi & Co., acquired all of Victory Pharma’s marketed products, Shionogi said in a statement last year.

Jonathan Diesenhaus, a lawyer representing Victory Pharma, didn’t immediately return a call seeking comment.

The allegations were part of a whistle-blower lawsuit filed in federal court in San Diego.

The civil case is Miller v. Victory Pharma, 09-cv-00636, U.S. District Court, Southern District of California (San Diego).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net;

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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