”Demonstrating the continued focus of the Department of Justice (“DOJ”) on the life sciences industry, on March 1, 2016, the U.S. Attorney’s Office for the District of New Jersey (“USAO”) announced a major settlement with Olympus Corporation of the Americas (“Olympus”), the U.S. subsidiary of Olympus Corporation, a Japanese company and the largest U.S. distributor of endoscopes and related equipment.[1] Of the $646 million settlement, $623.2 million relates to allegations of a scheme to pay illegal bribes to doctors and hospitals across the U.S. to induce purchases of its products, in violation of the Anti-Kickback Statute (“AKS”) and the False Claims Act (“FCA”). Significantly, the USAO concurrently announced a parallel settlement of $22.8 million to resolve breaches of the Foreign Corrupt Practices Act (“FCPA”). These resolutions, available here – https://www.justice.gov/usao-nj/file/829701/download and https://www.justice.gov/usao-nj/file/829716/download, combine to set two notable records: (1) the largest total amount paid in U.S. history for violations of the AKS; and (2) the largest amount ever paid by a medical device company. The FCA settlement resolves civil allegations filed in a 2010 qui tam action by John Slowik, the Company’s very own former Chief Compliance Officer, as well as criminal allegations subsequently brought by the government. Though certainly not the only takeaway, this latest blockbuster settlement in the life sciences sector sends one message loud and clear—the government (and qui tam relators and their counsel) remain focused on kickback violations both in the U.S. and abroad, and the life sciences sector remains a prime target………”
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Source: Paul Hastings
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