Kansas City Business Journal -- Cardinal Health Inc. has agreed to pay federal authorities $8 million to settle claims that it paid a retired Kansas City Chiefs football player kickbacks in exchange for buying the company’s drugs for his Kansas City pharmacies.
R. Daniel Saleaumua, who formerly owned seven Medicine Shoppe pharmacies, and pharmacy consultant Kevin Rinne sued the Dublin, Ohio, company in 2008 under the whistleblower provisions of the False Claims Act, the U.S. Department of Justice said Thursday.
“American taxpayers are the victims of illegal kickback schemes that result in Medicare and Medicaid paying millions of dollars more than they should for prescription drugs,” Beth Phillips, U.S. Attorney for the Western District of Missouri, said in a release. “Today’s $8 million settlement underscores our commitment to combating health care fraud and protecting taxpayers.”
Cardinal denies any wrongdoing, but said it agreed to settle the case to avoid the time and expense of litigation.
In the complaint, Saleaumua and Rinne alleged that Cardinal approached them in January 2006 and offered a 2.3 percent discount if Saleaumua would switch pharmaceutical providers.
When Saleaumua expressed misgivings because of potential costs of switching, he claims Cardinal sweetened the offer with $50,000 in cash.
“They decided to decline,” the lawsuit said. “In declining, however, Saleaumua suggested to Cardinal, partly in jest, that Cardinal should raise its cash offer to $100,000. Cardinal agreed.”
What followed was a bidding war between Cardinal and Saleaumua’s current distributor, McKesson Corp., that ended with Saleaumua switching to Cardinal in exchange for $440,000 in cash and the 2.3 percent drug discount.
In their lawsuit, the two men claim they didn’t know the payments were unlawful under federal kickback laws and were misled by the two companies.
It was unclear whether McKesson still is a defendant in the case; a phone call for comment to the San Francisco-based company wasn’t immediately returned.
For alerting federal authorities to the alleged scheme, Saleaumua and Rinne will receive $760,000 of the settlement under whistleblower laws.
Saleaumua played defensive lineman for 12 years in the NFL, including eight years in Kansas City, going to the Pro Bowl in 1995.
