Reichel Acquitted in Osteoporosis Kickback Trial

Last October, the U.S. Department of Justice arrested Carl Reichel, a former president of Warner Chilcott, for violating the Anti-Kickback Statute over the company’s osteoporosis drugs, Actonel and Atelvia.

On June 17, 2016, a federal jury acquitted Reichel on charges that he bribed physicians with pricey meals and speaking fees to induce them to write prescriptions for the drugs. The jury deliberated less than a day.

The Wall Street Journal reported that the acquittal “shows the challenges the federal government faces in what it says is a new push to hold more individuals accountable for alleged corporate wrongdoing. Such cases have proved difficult in the past because it is tough for prosecutors to prove an individual had criminal intent in a corporate setting where decision-making is spread among many.”

In court documents, Reichel’s attorneys said there was no evidence that he intended to violate the anti-kickback law or that he had any knowledge of doing anything illegal. An attorney for Reichel said in an email to the Journal: “Justice done.”

When Reichel was first arrested, his attorney reportedly told local journalists that this case would “collapse” like another prosecution handled by U.S. Attorney Carmen Ortiz in Boston.

He was referring to the case against Stryker Biotech Corporation that initially yielded 13 felony charges against that company and six against its former national sales director and two former regional managers. Ortiz alleged an illegal off-label promotion scheme. The government was essentially forced to abandon its case on the first day of trial in the face of a strike back by the company’s attorneys. The government reduced the criminal case to a single misdemeanor plea from the company and a $15 million fine.

“The charges brought by the U.S. Attorney are false. For more than 30 years in the pharmaceutical industry Carl Reichel worked hard and did the right thing and these baseless claims can’t change that. This is yet another health care case in this district—like those brought against people at TAP, Serono and Stryker—where after all the facts are out the government’s allegations will collapse, ” Boston attorney Joe Savage said in a statement at the time.

Warner Chilcott’s Guilty Plea

On October 29, 2015, Warner Chilcott agreed to plead guilty to healthcare fraud in Massachusetts and pay the government $125 million to settle both civil and criminal allegations against it. Under the plea agreement, the company agreed to pay a criminal fine of $22.9 million and a civil settlement of $102 million to the federal government and the states that made payments through Medicare, Medicaid, and other programs. The whistleblowers who sued Warner Chilcott under the False Claims Act in 2011 received approximately $22.9 million from the civil portion of the settlement.