Posted February 8th, 2021.
By Adam Lidgett
Law360 (February 8, 2021, 5:56 PM EST) — A former Roche Diagnostics Corp. employee is set to get a $3.6 million cut of a $12.5 million settlement to resolve her False Claims Act claims that the company had an illegal arrangement to get its diabetes medication back on Humana’s Medicare Advantage formulary.
According to a Monday court filing from whistleblower Crystal Derrick, she said that once Roche and Humana pay $12.5 million to the federal government, the U.S. will give her $3,625,000 from that amount.
“This case demonstrates that Medicare Advantage organizations, pharmacy benefit managers and pharmaceutical companies can be held responsible for giving or accepting payments in exchange for access to Medicare Advantage funds,” Inayat Ali Hemani, a Sanford Heisler Sharp attorney who represented Derrick, said in a statement. “Our client has helped the government recover millions of dollars and shed light on secretive transactions between pharmaceutical companies and Medicare Advantage organizations.”
Derrick first sued in June 2014, and a then-operative complaint was unsealed in May 2017 after the federal government declined to intervene.
The claims in Derrick’s suit date to March 2013, when Humana told Roche that it would end their contract and take Roche’s products off the formulary for its mail-order pharmacy, RightSource. A formulary is a list that details brand name and generic prescription drugs available through a particular insurer.
Derrick worked for Roche at the time, helping to oversee its account with the insurer, and in May 2013 she discovered that Humana had been out of compliance with their formulary agreement, leading to Roche paying rebates that it hadn’t been required to pay, her suit said. Humana agreed that Roche had overpaid and asked the drugmaker to quantify that amount, according to the suit.
Roche determined it was owed $45 million, but decided to use that outstanding balance as leverage to instead get back into business with Humana, Derrick said. Roche was eventually back on the formulary, and Humana was set to pay a reduced amount to settle the debt, she claimed.
Derrick raised concerns about the deal’s legality to her bosses and was then fired in retaliation, she said.
Roche and Humana declined to comment to Law360. The government did not immediately respond to requests for comment on Monday.
Derrick is represented by Inayat Ali Hemani, Michael Palmer and Kevin H. Sharp of Sanford Heisler Sharp LLP, and Jamie S. Franklin of The Franklin Law Firm LLC.
Roche is represented by David J. Stetler of the Law Offices of David J. Stetler LLC, and Thomas S. Crane and Kevin M. McGinty of Mintz Levin Cohn Ferris Glovsky and Popeo PC.
Humana is represented by Scott C. Solberg of Eimer Stahl LLP, and John E. Kelly and Brian R. Iverson of Bass Berry & Sims PLC.
The case is Derrick v. Hoffman-La Roche Ltd. et al., case number 1:14-cv-04601, in the U.S. District Court for the Northern District of Illinois.
–Additional reporting by Dani Kass and Lauraann Wood. Editing by Adam LoBelia.