Hawthorn Pharmaceuticals Agrees to Settle False Claims Act Lawsuit for Marketing Prescription Drugs That Were Not Approved by the FDA

Hawthorn Pharmaceuticals Inc., a subsidiary of Cypress Pharmaceutical Inc., has agreed to pay the federal government and eleven states $2.8 million to settle a qui tam lawsuit filed in 2007 under seal in the U.S. District Court for the Eastern District of Texas.

Robert Heiden, who worked for Hawthorn in Florida from October 2005 to October 2006 as a district sales manager, filed a qui tam lawsuit under the False Claims Act alleging that between 2003 and 2009 Hawthorn and its CEO, Max Draughn, illegally marketed three prescription drugs that were not approved by the Food and Drug Administration (FDA) as eligible for reimbursement by Medicaid and other government healthcare programs. Heiden also alleged that he was terminated for refusing to offer “illegal inducements to pharmacies and pharmacists.”

Heiden states:

“My case and the government’s response mean that children, from infants to adolescents, now are protected from the dangers of certain drugs whose safety and effectiveness haven’t been determined. With the removal of the drugs from government reimbursement lists, doctors are shielded from prescribing drugs they had been misled to believe were FDA-approved, and parents will no longer be giving their children drugs they didn’t realize hadn’t been approved by the FDA.”

As a whistleblower under the False Claims Act, Heiden will receive 21 percent of the settlement for the information he provided.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Tagged: False Claims Act (FCA), Whistleblower Laws (Federal)