U.S. accuses Valeant’s Salix unit of kickbacks, false claims

NEW YORK The United States has joined a whistleblower lawsuit accusing the Salix unit of Valeant Pharmaceuticals International Inc of paying illegal kickbacks to doctors and submitting fraudulent reimbursement claims to the government.

In a complaint made public on Thursday in the U.S. District Court in Manhattan, the government said Salix knowingly paid kickbacks to doctors, including monetary payments and lavish meals at restaurants such as Le Bernardin and Nobu, to induce them to prescribe seven of its drugs and medical devices.

The government said the scheme worked, causing thousands of false claims for payment to be submitted to federal health care programs including Medicare, Medicaid and a program overseen by the Department of Veterans Affairs.

Salix’s alleged improper activity occurred from January 2009 to December 2013, well before Valeant in April 2015 acquired the company for more than $11 billion.

Spokespeople for Valeant and Salix declined to provide immediate comment.

The lawsuit deepens the troubles facing Laval, Quebec-based Valeant, whose stock has fallen on intense scrutiny and concern over its business and accounting practices and high debt load.

Salix is accused in the lawsuit of violating the federal False Claims Act, for which the government is seeking triple damages and civil penalties, and a federal anti-kickback statute, for which the government also seeks damages.

The lawsuit combines two cases previously brought by physician Steven Peikin and four former Salix employees.

False Claims Act lawsuits allow whistleblowers to bring cases on behalf of the U.S. government, and share in any recoveries.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown and Richard Chang)

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