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San Diego drug firm to pay $11.4 million to settle kickback claims

December 28, 2012 | 10:39 am

A San Diego-based drug company has agreed to pay $11.4 million to the federal government to settle allegations it paid kickbacks to doctors to prescribe its painkillers and muscle relaxants.

The company, Victory Pharma Inc., allegedly provided doctors with tickets to sports events, concerts and plays, along with paying for spa outings, golf and ski outings, dinners at expensive restaurants, and even a trip to a strip club, according to court documents.

In exchange for the gifts, doctors wrote prescriptions for patients covered by Medicare and other federal health insurance programs, including the Tricare program for military families, prosecutors said.

In the settlement, announced Thursday, the company admits no wrongdoing but says it settled to "avoid the delay, uncertainty, inconvenience and expense" of court proceedings.

"Protecting taxpayers from healthcare fraud is a priority of this office," said San Diego U.S. Atty. Laura Duffy.

Victory Pharma Inc. is a Delaware corporation with headquarters in San Diego.

Under the settlement, a former salesman for the company will receive $1.7 million as provided by the whistleblower protection section of the False Claims Act.


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-- Tony Perry in San Diego