Cooperation, Compliance, and Consequences: Inside DOJ's $46 Million Veloxis Settlement

The Department of Justice’s recent resolution with Veloxis Pharmaceuticals sends a clear signal: pharmaceutical companies’ relationships with health care professionals remain under close scrutiny. Veloxis Pharmaceuticals Inc., a North Carolina-based drug manufacturer, agreed to pay more than $46 million to resolve criminal and civil allegations arising from a purported years-long kickback scheme involving its kidney transplant drug, Envarsus. The resolution included a deferred prosecution agreement (DPA), a civil False Claims Act (FCA) settlement, and the largest recovery on record under the federal Open Payments Program (Sunshine Act), which underscores the government’s continuing focus on pharmaceutical manufacturers’ relationships with health care professionals (HCPs) and its willingness to pursue both criminal and civil remedies when it considers those relationships to have crossed the line.

The Alleged Scheme: Kickbacks to HCPs and Specialty Pharmacies

While most FCA settlements do not include an admission of wrongdoing, this case was different. Because the FCA case was filed in the District of Massachusetts, which is one of a handful of jurisdictions that typically require defendants to make factual admissions, Veloxis likely had no choice but to do so. It also had to make admissions in the context of the DPA.

Between 2016 and 2023, Veloxis engaged in aggressive marketing efforts to increase sales. Among other things, Veloxis paid kickbacks to HCPs and other hospital personnel in the form of lavish meals, alcohol, expensive trips and resort stays, gifts, and purported consulting fees in exchange for prescriptions. In one notable exchange quoted by the Department of Justice (DOJ), a Veloxis employee told a surgeon seeking a slot in a speaker program that the employee “need[ed] scripts. Lots of them.” Veloxis concealed the kickbacks by falsifying company expense reports and other records, paying for consulting work that was never performed, and failing to report transfers of value to physicians pursuant to the Open Payments Program administered by the Centers for Medicare & Medicaid Services (CMS).

While settlements involving alleged kickbacks paid to HCPs have become commonplace over the years, this case was unusual because it also involved the company’s relationships with specialty pharmacies. At the direction of the former Chief Executive Officer and two company vice presidents, Veloxis paid kickbacks to specialty pharmacies in the form of per-patient, per-month payments that written contracts falsely described as fees for data and/or adherence services. The company paid for those services, which in some cases were not provided or were not provided in the proper format, and Veloxis typically did not review or use the data. Veloxis also did not know — and never confirmed — whether the adherence services were actually performed.

The $46 Million Resolution

The settlement included both criminal and civil components.

On the criminal side, Veloxis entered into a DPA relating to a conspiracy charge involving violations of the Anti-Kickback Statute in the District of Massachusetts and agreed to pay more than $10 million in criminal penalties.

On the civil side, Veloxis agreed to pay approximately $34.45 million — $21.2 million to the federal government and $13.2 million to several states — to resolve FCA allegations that it caused false claims to be submitted to Medicare, Medicaid, and TRICARE by paying kickbacks to physicians, hospitals, and specialty pharmacies. DOJ went beyond its FCA claims to pursue Veloxis for intentionally underreporting or failing to report certain physician payments to CMS, a claim DOJ or CMS has rarely made since the Open Payments Program began approximately 15 years ago. The claim resulted in a separate $1.55 million civil penalty, the largest such recovery on record. The company also entered into a five-year Corporate Integrity Agreement with the Office of Inspector General for the Department of Health & Human Services that requires enhanced compliance measures, oversight mechanisms, and the engagement of an independent compliance expert.

Although the conduct at issue had serious consequences for Veloxis, its financial liability likely would have been greater if Veloxis had not received cooperation credit under DOJ’s guidelines. As we discussed in our recent webinar DOJ Fraud and Health Care Enforcement in 2026, cooperation often leads to a damages multiplier of 1.5x (as opposed to the 2.0x multiplier typically applied in settlements or the 3.0x multiplier authorized by the FCA). The multiplier here was close to 2.0x, suggesting that DOJ might have taken a more aggressive approach in this settlement absent that cooperation. Among other things, Veloxis identified individuals involved in or responsible for the wrongdoing, disclosed the results of its internal investigation (including facts not otherwise known to the government), and took action against individuals responsible for the wrongdoing.

A Continuing Enforcement Trend

The Veloxis settlement sheds light on a long-standing enforcement trend that has recently intensified: DOJ is targeting pharmaceutical companies whose advisory boards, speaker programs, consulting arrangements, and other HCP engagements allegedly crossed the line from legitimate education and collaboration into unlawful inducement. For example, as we discussed in our prior blog post, DOJ secured a $202 million settlement with Gilead Sciences in April 2025 based on allegations involving speaker programs, honoraria, meals, and travel provided to HCPs.

Key Takeaways

Several lessons emerge from the Veloxis matter:

• Compliance Requires Action. Compliance policies must be actively implemented, monitored, and enforced across an organization.
• Cover-ups Compound Liability. Falsifying records can dramatically compound liability and elevate a matter from a civil investigation to a criminal enforcement matter.
• Reporting Obligations Matter. Sunshine Act reporting obligations carry real enforcement consequences and should not be treated as routine administrative exercises.
• Cooperation Matters. DOJ specifically credited Veloxis for admitting liability, proactively disclosing evidence, assisting the government's investigation, and implementing significant remediation measures. 

What Companies Should Know

DOJ expressly tied the Veloxis resolution to the broader efforts of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division, signaling that pharmaceutical companies should expect continued and potentially heightened scrutiny of their financial relationships with HCPs. Companies should proactively review their Sunshine Act reporting processes and assess their speaker programs, advisory boards, consulting arrangements, and other HCP interactions. Investing in compliance today can help avoid costly enforcement tomorrow.
 

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