Cardinal Health

History

2022: Payment of $13 million for kickbacks to doctors

In early February 2022, the US Department of Justice announced that Cardinal Health agreed to pay more than $13 million to resolve allegations of kickbacks. The charges against the medical equipment manufacturer include a violation of the law on false claims by paying advance discounts to their clients from medical practices in violation of the so-called Anti-Recourse Statute.

The anti-reversal statute prohibits pharmaceutical distributors from offering or paying any fees to encourage doctors to purchase drugs for use by Medicare patients, the U.S. Department of Justice (Justice Department) said in a press release. According to recognized facts in the settlement agreement, Cardinal Health did not fulfill the requirements, since the advance discounts that the company provided to customers were not related to identifiable sales. The company also represented imaginary discounts that were not earned by Cardinal Health customers.

Cardinal Health to pay $13 million for kickbacks to doctors

Cardinal Health attracted customers by offering and paying cash bonuses in violation of the Kickbacks Act and the False Claims Act. Kickback schemes like this can pervert clinical decision-making and damage our federal health care system and taxpayers! We thank Cardinal Health for jointly resolving this issue, said U.S. Attorney Rachael Rollins.

The settlement under the False Claims Act seeks to resolve the allegations originally made in the claims filed by the informants in accordance with the provisions of the Act. In connection with the announced settlement, informants will receive approximately $2.6 million from the funds recovered as part of the settlement. Lawsuits under the law are usually related to health, military or other government spending programs and dominate the list of the largest pharmaceutical settlements. Between 1987 and 2019, the US government recovered more than $62 billion in accordance with the False Claims Act.^[1]

2021

Penalty for sales of drugs that cause drug addiction

In late July 2021, California's attorney general announced that Johnson & Johnson and other pharmacists would pay $26 billion to sell drugs that cause drug addiction. The settlement includes Johnson & Johnson, which manufactured and sold opioid drugs, and pharmaceutical distributors Cardinal, McKesson and AmerisourceBergen. More details here.

Sale of Cordis Vascular Disease Equipment Business

In mid-March 2021, Cardinal Health sold a division of Cordis specializing in the production of equipment for the treatment of vascular diseases. A deal worth $1 billion was concluded with the investment company Hellman & Friedman. Closing of the transaction is expected in the second half of 2021. More details here.

2020

Punishment for bribes to heads of state institutions

In mid-March 2020, Cardinal Health agreed to pay more than $8.8 million for bribes paid to public hospital officials and employees of state-owned retailers for the purchase of skin care products.

The lawsuit concerned Cardinal China, founded by Cardinal Health in 2010 from several Chinese subsidiaries of a pharmaceutical, medical and other distribution company. Cardinal Health closed most of the bills issued by Cardinal China's predecessor. According to the US Securities Commission, these accounts mainly consisted of profits derived from the distribution of customers' products, and Cardinal China was obliged to return these funds to customers in accordance with contract agreements.

Cardinal Health agrees to pay more than $8.8 million for bribes paid to public hospital officials and employees of state-owned retailers for the purchase of skin care products

However, in 2016, Cardinal China learned that the company's marketers used this marketing account to bribe health care providers in public hospitals and employees of state-owned retailers to purchase skin care products. Bribes came in the form of cash, luxury goods, gift cards and trips.

Due to the shortcomings of Cardinal's internal accounting control, marketing employees were able to easily disguise these payments by sending funds through third-party intermediaries, the official documents indicate.

Cardinal and Cardinal China stopped these payments in 2016 and collaborated with the investigation. Cardinal China also closed marketing accounts, fired guilty employees, added anti-bribery clauses to contracts, and strictly limited the use of the company's balance for low-risk expenses, such as payroll payments.^[2]

Recall 9 million non-sterile surgical robes

At the end of January 2020, due to sterility problems, Cardinal Health recalled more than 9 million surgical robes used during many surgical procedures, including open heart operations or knee prosthetics. More details here.