One of 11 ‘false claims’ suits DOJ wants dismissed filed in SDIL by former Lakin partner

By Record News | Dec 28, 2018

BENTON – Six men who formed corporations to sue drug companies on behalf of the government wasted the government’s time, according to the government. 

On Dec. 17, U.S. attorneys in eight districts moved to dismiss 11 false claim suits that entities of the men filed against 38 defendants. 

At Benton, assistant U.S. attorney Nathan Stump moved to dismiss a suit against drug maker UCB and retailer CVS. 

Stump wrote that the allegations conflicted with important policy and enforcement prerogatives of federal health care programs. 


The claims “would undermine common industry practices the federal government has determined are, in this particular case, appropriate and beneficial to federal health care programs and their beneficiaries,” Stump wrote in a motion to dismiss. 

More than 73 million prescriptions written by hundreds of thousands of physicians for millions of beneficiaries were implicated in the lawsuits. 

Further, according to Stump, attorneys in the fraud section of the civil division at the Department of Justice spent 1,500 hours investigating the claims. And, that figure didn’t include the time of other government attorneys, law enforcement agents, investigators, and auditors.

Stump attached a declaration of civil division trial attorney Brian McCabe about the entities that filed the suits as relators of government claims. 

McCabe wrote that on Sept. 27, he met with John Mininno on behalf of National Health Care Analysis Group. 

According to McCabe, Mininno confirmed that Venari Partners, doing business as National Health Care Analysis Group, was a limited liability corporation formed by four entities that were formed by six individuals. 

McCabe attached a message that identified owners of the entities as Peter Riccardo, Joe Riccardo, Brad Blaschak, Michael Callaghan, Jerry Callaghan, and Minnino. 

McCabe attached their script for recruiting survey subjects. 

It read, “We perform our research by conducting 55-minute interviews of nurse educators, diabetes educators, other clinical educators and the pharmaceutical sales reps who work with them. 

“Our hope is that one day we will be able to have a positive influence on how nurse educators are used by the pharmaceutical companies.” 

A caller then offered $125 for the 55 minutes. 

Stump wrote that interviewers didn’t tell individuals that attorneys were collecting information for lawsuits involving their current or former employers, adding that they also didn’t tell individuals they would be named as corroborating witnesses in those suits. 

The six men started the litigation in 2016, suing Biogen in Massachusetts and suing Amgen and EMD Serono in Eastern Pennsylvania. 

In 2017, they sued Bayer, Eli Lilly, and Gilead Inc., in Eastern Texas. 

They also sued Teva Pharmaceuticals in Eastern Pennsylvania, Astra Zeneca in Western Washington, AbbVie in Northern Texas, and Otsuka Holdings in Northern Illinois. 

Richard Burke of Highland Park, former class action lawyer at Tom Lakin’s firm in Wood River, sued UCB and CVS in Southern Illinois. 

Burke sought to recover treble damages from alleged unlawful marketing schemes, plus civil penalties and restitution to the U.S. and 27 states. 

He wrote that UCB provided free services to providers to induce them to recommend Cimzia – a drug that works to prevent inflammation that may result from an overactive immune system. 

Burke called it quid pro quo. 

According to the lawsuit, pharmacies allegedly continued to submit claims to Medicare and Medicaid that were tainted by kickbacks, and providers didn’t necessarily prescribe Cimzia because they believed it would help their patients. 

Burke wrote that CVS subsidiary RXC Acquisition contracted to provide UCB with a force of nurse educators to work with its sales force, and UCB allegedly offered reimbursement support through RXC. 

“Once trained and deployed, these nurse educators began to provide free education services to any provider who would prescribe UCB’s Cimzia,” Burke wrote. 

“RXC nurse educators were successful in saving prescribers time, money and resources, and in many instances resulted in receiving higher reimbursement rates associated with certain disease metrics. 

“Not surprisingly, UCB’s drug sales have increased every year.” 

Burke wrote that UCB representatives could offer a reimbursement team on call. 

“When that offer was accepted, the provider received the benefits of the reimbursement support service without actually having to pay for those services,” he wrote. 

The suit also alleged that RXC eliminated the time and expense of determining and verifying benefits, copays, and deductibles; it saved time for providers with phone calls to patients; it eliminated the time and expense of appeals and it managed calls for refills or additional authorizations. 

It claimed that UCB greatly reduced and in some instances eliminated a provider’s administrative costs related to Cimzia. 

The alleged Illegal marketing by defendants caused pharmacies, Part D sponsors, intermediaries and others to submit claims for Cimzia. And, defendants allegedly caused Medicare, Medicaid, and other government programs to disburse tens of millions of dollars they shouldn’t have paid. 

Like all suits under the False Claims Act, the kickback suits remained under seal while the U.S. decided whether to intervene.           

When the U.S. intervenes, it takes control. Suits can proceed without the U.S., but the U.S. can intervene later.                                   

In all 11 of these kickback suits, the U.S. declined to intervene. 

UCB and CVS still haven’t answered the suit in Benton, where Magistrate Judge Donald Wilkerson granted them seven extensions this year. 

The motion to dismiss awaits a ruling from District Judge Staci Yandle. 

A motion to dismiss in Massachusetts brought a reaction that yielded more information about National Health Care Analysis Group. 

District Judge Indira Talwani had already dismissed the Biogen suit because the relator failed to answer Biogen’s motion to dismiss. 

On Dec. 18, Talwani ordered partners Bradford Geyer and Hays Gorey of New Jersey to show why she shouldn’t revoke their pro hac vice admissions “for prosecuting an action without sufficient factual and legal support.” 

On Dec. 26, Geyer defended their conduct and argued their case. 

Geyer wrote that he served at the Department of Justice for 21 years, and Gorey served more than 40 years. 

“I wholeheartedly believe that the case has merit based not only on my investigation of the complaint and facts, but due diligence in talking to other respected attorneys in the field,” Geyer wrote. 

He wrote that before entering an appearance he had conversations with personnel at the Department of Justice, some of whom he knew from prior service. 

He wrote that no one intimated the case was meritless. 

“In these discussions, we discussed the emergency of corporate relators as plaintiffs and I was told this is not unusual or improper,” he wrote. 

“I came away from those conversations without any concerns about the identity of the relator or the investigative and research methods the relator used. 

“I believed and continue to believe that the actions of the defendants constitute a violation of the Anti-Kickback Statute.” 

Geyer also wrote that finally, he would address the government’s assertion that it consulted with subject matter experts regarding the business model of National Health Care Analysis Group. 

He wrote that the group was conceived as a consulting firm for investors seeking to avoid entities whose revenue streams could be tainted by Medicare fraud. 

“The team initially included a former IRS special agent with expertise in forensic accounting, a registered nurse with 30 plus years of expertise in skilled nursing, a Duke MBA in finance and home health care sector management, and a lawyer who had experience in pursuing home health care fraud,” Geyer wrote. 

“Because the group found that Medicare fraud was so rampant in health care industry, it flipped its business model.    

“The group now sought to find ways to partner with private business and the government to reduce and eliminate all forms of fraud, waste and abuse.”                   

He wrote that the group is a subject matter expert.

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