Daiichi Sankyo Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey, has agreed to pay the federal government and state Medicaid programs $39 million to resolve allegations that it illegally marketed drugs like Benicar despite knowing the dangerous side effects of Benicar by paying kickbacks to encourage doctors to prescribe the blood pressure drug.

According to the Justice Department, Daiichi Sankyo paid kickbacks to doctors to prescribe the blood pressure drug Benicar in the form of “speaker’s fees” between January 2004 and February 2011.

Allegedly, payments were made to doctors even when participants in the Physician Organization and Discussion programs, known as “PODs,” took turns speaking on duplicative topics over Daiichi-paid dinners. The recipients allegedly spoke to members of his or her own staff in his or her own office, or the associated dinner was so lavish that its cost exceeded Daiichi’s own internal cost limitation of $140 per person.

As part of the settlement, Daiichi Sankyo must also take steps to prevent illegal marketing practices in the future by implementing a corporate integrity program, which obligates the drug manufacturer to undertake substantial internal compliance reforms for the next five years.

Additionally, plaintiff Kathy F., the ex- Daiichi Sankyo sales representative who filed the lawsuit accusing Daiichi Sankyo of Benicar kickbacks, will receive a $6.1 million portion of the Benicar settlement before legal fees. The former representative filed suit on behalf of the United States under the whistle blower provisions of the False Claims Act.

Anti-Kickback Statute

In recent years, the Justice Department has cracked down on pharmaceutical companies for using illegal marketing tactics to promote its drugs. The Anti-Kickback Statute was enacted to ensure that physicians’ medical judgment is not compromised by improper payments and gifts by other healthcare providers.

The statute generally prohibits anyone from offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare and Medicaid.

Benicar Side Effects

Benicar has been linked to a very serious side effect known as sprue-like enteropathy. According to a U.S. Food and Drug Administration (FDA) Safety Communication from July 2013, sprue-like enteropathy can cause chronic diarrhea, life-threatening weight loss, malnutrition, dehydration, and permanent intestinal damage.

The link between the side effects of Benicar and sprue-like enteropathy was first uncovered in 2012.

Researchers from the American College of Gastroenterology noted that olmesartan, the active ingredient in Benicar, had been linked to an additional 40 cases of sprue-like enteropathy. Some of the findings include but are not limited to:

• Symptoms of sprue-like enteropathy include severe, chronic diarrhea with substantial weight loss.
• The enteropathy may develop months to years after starting Benicar, sometimes requiring hospitalization.
• Discontinuation of Benicar has resulted in clinical improvement of sprue-like enteropathy symptoms in all patients.
• Sprue-like enteropathy has not been detected with ARD drugs other than Benicar.

Benicar Lawsuits

Meanwhile, Daiichi Sankyo is also facing dozens of Benicar lawsuits alleging serious gastrointestinal injuries and side effects associated with sprue-like enteropathy from taking Benicar. Despite FDA label changes for the blood pressure drug, attorneys speculate that hundreds of Benicar lawsuits will eventually be brought against the pharmaceutical giant.