The California Attorney General also announced a settlement against pharmaceutical manufacturer QOL Medical (“QOL”) and Frederick E. Cooper, the company’s Chief Executive Officer for submitting false claims to the Medicaid program and other government healthcare programs.
QOL Medical is headquartered in Vero Beach, Florida and is a privately held Delaware limited liability company. Cooper, an individual residing in Nashville, Tennessee, has served as QOL’s Chief Executive Officer since 2010; he holds a substantial indirect ownership stake in QOL.
QOL is is a specialty biopharmaceutical company. They focus on the acquisition and commercialization of orphan products in underserved markets. QOL Medical markets two FDA-approved products: Sucraid® (sacrosidase) Oral Solution: Used for the treatment of congenital sucrase-isomaltase deficiency (CSID). And Ethamolin® (Ethanolamine Oleate) Injection, 5%: Used for the treatment of esophageal varices.
The settlement resolves allegations that QOL engaged in a kickback scheme between 2018 and 2022, by providing free Carbon-13 (“C13”) test kits to providers then using the test results to sell their drug, Sucraid. This resulted in some patients taking Sucraid even though it wasn’t medically necessary.
As a part of the settlement, QOL and Cooper, will pay a total of $47 million to resolve federal and state violations of various fraud and kickback statutes, with the State of California receiving $384,406.
The settlement resolves allegations that QOL paid remuneration to induce the purchase of Sucraid, a drug that treats the symptoms associated with sucrose ingestion in patients with a rare gastrointestinal genetic disease called congenital sucrase-isomaltase deficiency (CSID). This is an alleged violation of the Anti-Kickback Statute, the federal False Claims Act and state law False Claims Act corollary statutes.
QOL admitted that beginning in 2018, it distributed free C13 test kits to health care providers and asked them to give these kits to their patients with common gastrointestinal symptoms. They claimed that the C13 test could “rule in or rule out” CSID, for which Sucraid is the only FDA-approved therapy.
QOL paid a clinical laboratory to analyze patients’ C13 tests and received aggregate weekly results, which its commercial team used to find potential Sucraid patients.
Between 2018 and 2022, QOL paid the laboratory for over 75,000 C13 tests and disseminated the results to the QOL sales force, so that the sales force would make Sucraid sales calls to health care providers whose patients had positive C13 test results. This conduct allegedly caused the submission of false claims to both Medicare and Medicaid, including California’s Medicaid program, Medi-Cal.
Whistleblowers filed a qui tam action in the United States District Court for the District of Massachusetts, captioned United States of America., ex rel. John Doe 1, et al. v. QOL Medical, LLC, et al., Civil Action No. 1:20-cv- 11243-AK (D. Mass.).