Sun Pharma subsidiary to pay $20.75 mln settlement

August 24, 2020

By a Biometrica staffer

Sun Pharmaceutical Industries Inc’s subsidiary – DUSA Pharmaceuticals Inc – agreed to pay the US a $20.75 million settlement to resolve false claim allegations. DUSA allegedly caused physicians to submit false claims to Medicare and the Federal Employee Health Benefit Program, the US Department of Justice said in a statement.

It knowingly promoted an administration process for the drug Levulan Kerastick, which contradicted product instructions approved by the US Food and Drug Administration (FDA), and was unsupported by sufficient clinical evidence.

Levulan Kerastick is a prescription topical solution approved by the FDA for the treatment of minimally to moderately thick actinic keratosis of the face or scalp. Actinic keratoses are scaly spots or patches on the top layer of skin. With time the spots or patches may become hard with a wart-like surface.

At all relevant times, the “Dosage and Administration” section of the drug’s FDA-approved instructions described a two-stage process involving application of the topical solution to the target lesions and then, following an incubation period of 14 to 18 hours, illumination of the target lesion with blue light.

The US alleged that by January 2014, senior management at both DUSA and Sun Pharma knew that administration of Levulan Kerastick employing short incubation periods – ranging from one to three hours – resulted in clearance rates significantly lower than those achieved in clinical trials using 14 to 18-hour incubation. Still, between January 2014 and December 2016, DUSA allegedly encouraged physicians to use these demonstrably less effective short incubation periods.

DUSA used, among other things, paid physician speaker programs, paid physician peer-to-peer discussions, promotion by DUSA’s sales force, and the dissemination of incomplete or misleading responses to questions from prescribing doctors to encourage physicians.

It failed to inform physicians that administering the drug using short incubation periods resulted in significantly lower clearance rates than achieved with the longer incubation period described in the FDA-approved instructions. In some instances, the company falsely stated that clearance rates were the same for the shorter and less effective incubation periods.

While this scheme to provide false instructions on the use of its product may have resulted in more sales and bigger profits, it also meant customers endured the frustration of being repeatedly subjected to less effective treatments to try to get their skin lesions to clear. This investigation seeks to restore money to taxpayers and discourage those who put profits over effective treatment.

U.S. Attorney Brian T. Moran for the Western District of Washington

As part of the settlement, DUSA and its parent company, Sun Pharma, have agreed to enter into a Corporate Integrity Agreement with the US Department of Health and Human Services Office of Inspector General. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.

The settlement with DUSA resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed by Aaron Chung, who formerly worked for DUSA as a sales representative. As part of today’s resolution, Chung will receive approximately $3.5 million.

The department is committed to protecting taxpayer-supported health care programs from fraud and abuse. We will hold drug manufacturers accountable when they knowingly promote ineffective uses of their products that undermine patient care or waste program funds.

Acting Assistant Attorney General Ethan P. Davis for the Justice Department’s Civil Division