ASD Specialty Healthcare LLC (ASD), operating as Besse Medical, has agreed to pay $1.67 million to resolve allegations that it violated the Anti-Kickback Statute (AKS) and the False Claims Act. The charges stem from claims that Besse provided free inventory management systems to retina practices to induce them to purchase ophthalmological drugs from the company.
Headquartered in Carrollton, Texas, ASD distributes specialty medical and pharmaceutical products nationwide, including injections for treating wet age-related macular degeneration (wet AMD), a common eye condition. The company allegedly offered a commercially available inventory management system, known as PODIS, at no cost to healthcare providers who met certain conditions, such as purchasing branded Wet AMD drugs from Besse or converting to Besse as a supplier if they were not already a customer.
From May 2017 to November 2023, ASD’s practice of providing these free systems was aimed at incentivizing physicians to buy drugs covered by Medicare, TRICARE, and the Department of Veterans Affairs, according to the U.S. Department of Justice (DOJ). These actions allegedly led to the submission of false claims for government healthcare programs, violating federal laws that prohibit kickbacks.
“The allegations in today’s settlement demonstrate how ASD improperly leveraged a commercially available product to gain business and profit, violating the Anti-Kickback Statute,” said Principal Deputy Assistant Attorney General Brian M. Boynton. “The Justice Department will continue to pursue cases involving kickbacks at every level of the distribution chain to ensure the integrity of federal healthcare programs.”
The Anti-Kickback Statute is designed to prevent pharmaceutical suppliers from offering remuneration, including free products, to induce healthcare providers to make purchases of drugs reimbursed by Medicare and other federal programs. Offering such improper incentives can increase healthcare costs and disadvantage businesses that adhere to the law.
U.S. Attorney Joshua S. Levy for the District of Massachusetts emphasized the importance of maintaining fair business practices in the healthcare industry. “Offering improper incentives can increase health care costs and disadvantage competitors who are playing by the rules. Our office is committed to continue pursuing these investigations with our federal law enforcement partners.”
The settlement stems from a whistleblower lawsuit filed under the False Claims Act by two former employees of Regeneron Pharmaceuticals, Julianne Nunnelly and Matthew Shanks, who are entitled to receive $250,705.20 from the settlement proceeds.
In addition to the settlement, the case was investigated as part of a coordinated effort between the DOJ’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts, and several law enforcement agencies, including the Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the Department of Veterans Affairs Office of Inspector General (VA-OIG).
The settlement resolves all claims in this matter, but the investigation into Regeneron Pharmaceuticals Inc., a manufacturer of a drug to treat wet AMD, remains ongoing.
ASD’s agreement to pay the settlement is intended to address the unlawful business practices and to deter similar activities in the future, protecting the integrity of taxpayer-funded healthcare programs and ensuring fair competition in the pharmaceutical industry.
