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CareFusion Settles ChloraPrep Whistleblower Case for $40.1M

Company allegedly made off-label marketing claims and kickback payments.

Published: January 14, 2014

CareFusion has agreed to pay the government $40.1 million to settle charges that it illegally marketed ChloraPrep by promoting the pre-operative surgical skin prep for off-label uses and by paying kickbacks to a powerful physician that the company hoped would influence providers to use ChloraPrep, says the Department of Justice.

  • Off-label claims. Between September 2009 and August 2011, CareFusion allegedly knowingly promoted ChloraPrep "for uses that were not approved by the Food and Drug Administration, some of which were not medically accepted indications" and of making "unsubstantiated representations about the appropriate uses of ChloraPrep." Those representations, according to a whistleblower lawsuit initiated by a former CareFusion employee, included claims that ChloraPrep was effective in the "prevention of infection," and/or "reduction of infection," and/or "reduction of microorganisms," none of which were FDA-sanctioned indications. The FDA rejected CareFusion's claims that ChloraPrep could be used to prep the skin before inserting catheters into veins for administering medications, or to clean the skin as part of closing wounds. ChloraPrep, a 2% chlorhexidine gluconate/70% isopropyl alcohol formulation, is a rapid-acting, persistent and broad-spectrum antiseptic for a range of minor and major medical procedures. It acts fast on a broad spectrum of bacteria, and keeps fighting bacteria for at least 48 hours.
  • Kickbacks. The Department of Justice also alleges that in 2008, CareFusion's predecessor corporation (CareFusion was spun off from Cardinal Health in 2009) agreed to pay $11.6 million in kickbacks to Charles Denham, MD, then the co-chair of the safe practices committee at the National Quality Forum, in return for his "recommend[ing], promot[ing] and arrang[ing] for the purchase of ChloraPrep by health care providers." This violates federal and state anti-kickback laws.

The allegations against CareFusion were initiated under the False Claims Act, which lets whistleblowers share in any recovery made by the government. Cynthia Kirk, PhD, a former vice president of regulatory affairs for the company, will collect $3.26 million as a result of the settlement.

The settlement was not an admission of guilt by CareFusion. "We are pleased to resolve this matter and are confident we have strong practices, processes and controls in place," said Kieran T. Gallahue, the company's chairman and CEO. "We have made significant investments during the past several years to improve our quality and compliance systems … and will continue to do so as part of our commitment to adhering to the highest standards and aligning with best global practices."

Jim Burger


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