[co-author: Stephanie Kozol]*
What Happened
On July 16, 49 attorneys general (AGs) announced that they joined a $202 million settlement with Gilead Sciences, Inc. (Gilead). Previously announced by the Department of Justice in April, the settlement resolved allegations that the company incentivized doctors to prescribe its medication through HIV speaker programs.
The Details
The allegations against Gilead arose from a 2016 whistleblower suit accusing Gilead of violating the federal Anti-Kickback Statute and state false claims laws. The allegations centered on Gilead’s practice of paying health care providers honoraria, meals, and travel expenses to induce them to prescribe its HIV drugs. Between 2011 and 2017, Gilead hosted “HIV Speakers” programs, which were often held at luxury restaurants and involved repeat attendance by high-prescribing health care providers. The government claimed this conduct led to false claims being submitted to Medicare, Medicaid, TRICARE, and the AIDS Drug Assistance Program.
Gilead agreed to a settlement of $177 million, with $88.5 million constituting restitution to the U.S., as fully detailed in the stipulation and order of settlement between the U.S. government, led by the U.S. attorney for the Southern District of New York, and Gilead. The stipulation also included terms for Gilead’s cooperation in ongoing investigations and specific compliance conditions to avoid further penalties or exclusion from federal health programs.
Separate Settlement Agreement With States
As stated in the stipulation, Gilead also intended to enter a separate $25 million settlement with various states to resolve state law claims. A National Association of Medicaid Fraud Units team, led by the New York AG, was responsible for the states’ investigation and negotiations with Gilead. As announced, Gilead’s $202 million settlement successfully resolves the allegations with 49 state and territorial AGs, but four states — Indiana, Maryland, Mississippi, and Texas — did not join.
Why It Matters
Gilead’s decision to reach a settlement with both federal and state regulators allows the company to move forward after this enforcement action. Holistic settlements help companies avoid prolonged periods of negotiating multiple settlements, reducing stress on a company’s legal team and allowing decision-makers to move forward from enforcement issues.
*Senior Government Relations Manager
