Heritage Pharmaceuticals to Pay $$7 Million in False Claims Allegations

F.J. Thomas

Philadelphia, PA (WorkersCompensation.com) – Generic drug maker Heritage Pharmaceuticals of Eatontown, New Jersey will pay $7 million in settlement amid allegations that the company fixed prices and allocated customers for gain according to the Department of Justice (DOJ). The settlement is only a portion of a larger resolution with the Civil and Antitrust Divisions of the DOJ.

The $7 million settlement resolves False Claims Act allegations that the company paid and received compensation from other drug manufacturers from 2012 to 2015, and in the process artificially inflated pricing for drugs that were approved and paid by government payers, including the Tricare and the VA System. A wide range of drugs were impacted and included critical medications used for treatment of high blood pressure, asthma, and diabetes.
Additionally, Heritage Pharmaceuticals has agreed to a three-year deferred prosecution agreement in charges that it violated the Sherman Act by conspiring to eliminate completion by allocating customers, rigging bids and fixing prices. Under the terms of the agreement, Heritage must pay a $250,000 monetary penalty.

According to HealthLeaders, William S. Marth, who became the Heritage CEO in April 2018, blames former executives for the misconduct. Former President Jason Malek, and former CEO and Chairman Jeffrey Glazer entered plea agreements in 2016 after being charged with two counts of criminally violating the Sherman Act. Both former executives paid $25,000 each in penalties with an agreement to cooperate in the multi-state investigation of which Heritage Pharmaceuticals was only one defendant.

Heritage Pharmaceuticals is still listed as a Government Vendor for “Medicinal and Botanical Manufacturing“ on the Government Contracts and Bids (GovCB) website along with other well-known manufacturers such as Allergan.

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