Doctor mentioned in CareFusion off-label marketing settlement denies kickback allegations

A doctor whose name came up in stories about a $40.1 million multi-state

settlement with CareFusion that resolves off-label marketing and Medicaid fraud claims involving the surgical preparation solution ChloraPrep has released a statement in which he adamantly denies that he was paid $11.6 million in kickbacks by the California-based company.

In mid-January, the Pennsylvania Record reported that the commonwealth was poised to share in the multi-million dollar settlement, an accord that was entered into between CareFusion, a technology company that makes medical and surgical supplies and medical devices, and various states as well as the federal government.

As previously reported, CareFusion agreed to pay the $40.1 million amount to settle allegations that it promoted and marketed ChloraPrep for uses not approved by the Food and Drug Administration.

The U.S. Justice Department had reported that CareFusion’s predecessor company paid $11.6 million in kickbacks to Charles Denham, while the physician served as co-chair of the Safe Practices Committee at the National Quality Forum, a nonprofit organization that reviews, endorses and recommends standardized healthcare performance measures and practices.

Last week, a public relations outfit representing Denham released a statement calling the government’s allegations of improper kickbacks “blatantly false.”

“The qui tam complaint involved in the settlement between the government and Carefusion makes absolutely no mention of Dr. Denham and does not involve him or any of his companies in any way,” the statement reads. “The qui tam action revolved around Carefusion’s alleged off-label promotion of one of its products.”

The statement went on to say that the press release by the Justice Department contributed to the confusion, since the government indicated that the settlement resolved two different sets of allegations.

The first set of allegations concern those raised in the qui tam suit, namely that CareFusion knowingly promoted ChloraPrep for non-FDA-approved uses.

Those allegations, the statement says, did not involve Denham in any way.

The second set of allegations mentioned in the government’s news release involved the issues relating to alleged payments made to Denham.

“These allegations are not the subject of any lawsuit,” the statement reads. “In seeking to resolve the qui tam action, Carefusion reached an agreement with the government to resolve both the pending lawsuit as well as an inquiry that has not resulted in the filing of a lawsuit.”

Denham, the statement notes, has cooperated with the government’s investigation of CareFusion in the past, and would continue to do so in the future.

The payments termed “illegal kickbacks” by the government, the statement says, relate to two different contracts.

The first was entered into between Denham’s company, Health Care Concepts Inc., and Cardinal Health 200 Inc. in the summer of 2008.

The second was entered into between Denham’s company and Cardinal Health 303, in the fall of 2008.

Both of the contracts, the statement notes, pre-date the announcement of a study published in the New England Journal of Medicine that related to ChloraPrep and a consideration of that study by the National Quality Forum, on which Denham sat.

The first contract pre-dates the actions of the National Quality Forum by more than a year and the second contract pre-dates the organization’s actions by more than 10 months, reads the statement, which was released by California-based Sitrick and Company, the PR firm representing Denham.

Denham is further represented by attorney Larry S. Gondelman of the Washington, D.C. firm Powers Pyles Sutter & Verville.