CareFusion Inks $40M Deal over Marketing, Kickback Claims
Medical device maker CareFusion Corp. has agreed to pay $40 million to resolve civil claims by the U.S. government that it used unlawful marketing and kickbacks to promote its products. More than $3 million of the settlement will go to a whistleblower represented by a tiny law firm in Kansas.
The U.S. Department of Justice, which intervened in the case, announced the settlement on Thursday. Prosecutors alleged that CareFusion violated the False Claims Act by unlawfully promoting its ChloraPrep surgical prep products for off-label uses. The DOJ also accused CareFusion of funneling $11.6 million in kickbacks to Dr. Charles Denham in order to induce him to recommend ChloraPrep to health care providers. Denham is an influential physician who has taught at the Harvard School of Public Health and whose writings have appeared in The Wall Street Journal.
San Diego-based CareFusion did not admit any liability. The company was was represented by Karen Hewitt of Jones Day.
The DOJ worked on the case alongside staff at the U.S. Department of Health and Human Services, as well state prosecutors in New York, California, Idaho, Maryland, North Carolina, and Texas.
Cynthia Kirk, a former vice president of regulatory affairs at CareFusion, first brought the case in September 2010. According to the DOJ, Kirk will take a $3.26 million cut of the settlement under the qui tam provisions of the FCA. Kirk is represented by Carrie Brous of the two-person firm Brous Horn in Overland Park, Kansas.