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Astellas Pays $18 Million to Resolve Qui Tam Claims Over Allegations of Medicaid Fraud

Chicago, IL, October 15, 2021 — Today, more than 7 years after whistleblower Ronald J. Streck, a former executive of a network of regional drug wholesalers, filed a False Claims Act lawsuit alleging that Astellas Pharma U.S., Inc. (Astellas) underpaid the rebates that drug manufacturers are required to pay under the Medicaid Drug Rebate Program, Astellas has agreed to pay $18 million to settle the claims. As a result of that payment, the case against Astellas was dismissed earlier today. Dan Miller of Walden Macht & Haran served as lead counsel representing Mr. Streck.

View the executed settlement here.

The $18 million settlement with Astellas is the latest in Mr. Streck’s series of successful False Claims Act lawsuits against drug manufacturers for alleged misconduct involving the Medicaid Drug Rebate Program, including a $75 million settlement with Bristol Myers Squibb earlier this year. Collectively, Mr. Streck’s lawsuits have recovered more than $150 million for the Medicaid program. Links to previous settlements can be found here and here.

Miller, who has represented Mr. Streck in all of his cases, commented on the settlement: “The Medicaid Drug Rebate Program is designed to reduce the staggering amounts of money that Medicaid spends to provide prescription drug coverage to the poorest Americans. Mr. Streck’s lawsuits have not only led to the recovery of more than $150 million for Medicaid, they will also deter misconduct involving the Medicaid Drug Rebate Program moving forward. I am incredibly proud to represent Mr. Streck and to have led his tireless pursuit of these lawsuits over the past decade.”

Mr. Streck brought suit against Astellas in 2014. Under the Medicaid Drug Rebate Program, the rebates that drug manufacturers are required to pay are based on average manufacturer prices submitted by drug manufacturers to the Government. The lawsuit alleged that Astellas treated millions of dollars in service fee payments to drug distributors as “discounts,” when in fact the payments were for bona fide distribution services. By treating the payments as discounts, Astellas reported lower average manufacturer prices, which led to Astellas paying less in drug rebates to state Medicaid programs.

In 2018, the Government declined to intervene, and Mr. Streck and his attorneys proceeded to litigation against Astellas. These efforts include successfully defeating two motions to dismiss filed in 2018 by Astellas and another defendant, Eli Lilly and Company.

Mr. Streck, represented by Walden Macht & Haran, is continuing to pursue claims against Eli Lilly in the Chicago lawsuit.

Today’s settlement announcement with Astellas marks the eleventh previously-declined False Claims Act case that Walden Macht & Haran partner Dan Miller has settled on behalf of the federal and state governments.

The case is captioned U.S. ex rel. Ronald Streck et al. v. Takeda Pharmaceuticals America, Inc. No. 1:14-cv-09412 and proceeded in the Northern District of Illinois. The claims against Astellas are allegations only, and there has been no determination of liability.

Contact: Jennifer Besada, jbesada@wmhlaw.com, (212) 335-2979