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Whistleblower Comments on Hawthorn Pharmaceuticals' $2.8 Million Settlement of His Medicaid Fraud Qui Tam Case
Date:3/28/2012

lawsuit is a very effective enforcement tool for stopping sales of unapproved drugs. There are so many unapproved drugs that the FDA doesn't have the resources to stop sales of all of them. If the government cuts off Medicaid reimbursement for the unapproved drugs -- as it did with Hawthorn -- then the companies likely would no longer sell them as most of the market for the drugs would disappear."

ATTORNEY STEPHEN S. HASEGAWA, PHILLIPS & COHEN, SAN FRANCISCO: "It's appalling that a company would sell drugs for use by children, adolescents and others when those drugs hadn't been tested for safety or effectiveness. Doctors trusted that these drugs had been approved, not knowing Hawthorn knew how to work the system."

About the whistleblower case against Hawthorn

The settlement agreement -- which includes Hawthorn's chief executive officer, Max Draughn, a defendant in the case -- covers charges that Hawthorn caused false claims for three drugs used for skin problems -- Hylira, Zaclir, and Zacare Kit -- to be submitted to Medicaid and other government health programs from 2003 to 2009. The whistleblower lawsuit also raised safety concerns about certain cold and cough medications and many other unapproved prescription drugs Hawthorn was marketing.

The FDA issued a safety alert last year about certain unapproved prescription cough, cold and allergy products due to concerns about safety risks with use of those medications and asked drug companies to stop shipping those products for sale in the U.S.

Under the False Claims Act, whistleblowers are entitled to 15 percent to 25 percent of the amount recovered if the government joins their qui tam lawsuits and recovers funds. Heiden will receive 21 percent of the settlement amount for the information he provided and the work he and his attorneys did on the case.

Heiden praised Phillips & Cohen and the team of federal and state attorneys and investigators
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SOURCE Phillips & Cohen LLP
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