January 9, 2015 / 3:45 PM / 5 years ago

Daiichi Sankyo to pay $39 million to settle U.S. kickback claims: DOJ

A man walks past a sign of Japanese pharmaceutical company Daiichi Sankyo Co., Ltd. at the company's head office in Tokyo July 17, 2009. REUTERS/Stringer

(Reuters) - The U.S. subsidiary of global pharmaceutical company Daiichi Sankyo Co Ltd has agreed to pay $39 million to the U.S. government and state Medicaid programs to settle claims it paid doctors kickbacks to prescribe its drugs, the Department of Justice said on Friday.

The deal comes out of a whistleblower lawsuit filed by former Daiichi sales representative Kathy Fragoules, who will get $6.1 million of the settlement.

The lawsuit claimed Daiichi Sankyo Inc paid kickbacks to doctors in the form of speaking fees at programs it hosted from 2004 until 2011. The doctors were sometimes even paid for speaking only to their own staff over “lavish” dinners hosted by Daiichi, according to the DOJ.

Daiichi allegedly paid the kickbacks to get doctors to prescribe its high blood pressure drugs Azor, Benicar and Tribenzor, and its cholesterol-lowering drug Welchol.

In addition to the $39 million payment, Daiichi has agreed to make internal reforms, the DOJ said.

“We are pleased to have finalized these agreements and remain focused on our core mission of helping people live healthy and meaningful lives,” Ken Keller, president of Daiichi’s U.S. commercial operations, said in a statement.

The company, founded in Japan, has U.S. headquarters in New Jersey.

The case is U.S. ex rel. Fragoules v. Daiichi Sankyo Inc, U.S. District Court, District of Massachusetts, No. 10-10420.

(The story was refiled to correct the first and third paragraph to say settlement was with U.S. subsidiary)

Reporting by Brendan Pierson; Editing by Ted Botha and Dan Grebler

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