Pharmaceutical company settles civil allegations for $2.8M
Published: March 29,2012
MADISON — A Mississippi-based pharmaceutical company has agreed to pay $2.8 million to resolve civil allegations that the manufacturer falsely marketed skin products to receive government funding.
U.S. Attorney John M. Bales said yesterday Cypress Pharmaceutical Inc., a subsidiary and CEO Max Draughn will pay $1.6 million to the military’s TRICARE program and $1.2 million to state Medicaid programs.
The government alleges that Cypress subsidiary Hawthorne Pharmaceuticals Inc. claimed that three skin products carried the Food and Drug Administration’s “safe and effective” designation when the treatments didn’t. The government also claims the regulatory status of the products was misrepresented.
Bales says a whistleblower who sued under the False Claims Act received $300,000 as part of the settlement.
An official for Madison-based Cypress didn’t immediately return a phone call seeking comment.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- Ex-prison boss and businessman admit to bribery scheme
- ASA postmortem: industrial recruiting is a constant cycle of death and life
- MBJ Business Woman of the Year Top 10
- MARTIN WILLOUGHBY — Doug Dale’s self-awareness helps lift him to top of his game
- JOSH MABUS — Inbound marketing is fueled by wishful thinking
- Meet the MBJ's Businesswoman of the Year — Rosemary Smith, a business hotshot
- DAVID DALLAS — Delbert Hosemann: An unsung hero chooses to remain so
- (UPDATED — BREAKING NEWS) American Specialty Alloys won’t locate $1.2B mill in Mississippi
- State’s Consumer Protection Act key to forcing S&P settlement on bogus bond ratings