Federal and State Authorities Charge Oncology Group with Market Allocation, Obtain Agreements to Pay More Than $120 Million in Penalties

On April 30, the U.S. Department of Justice announced that it had filed a criminal information against Florida-based oncology group Florida Cancer Specialists & Research Institute LLC (FCS). The information charged FCS with violating section 1 of the Sherman Act by conspiring to allocate medical and radiation oncology treatments for cancer patients in Southwest Florida.  The Department’s release stated that over a 17-year period — beginning as early as 1999 and continuing until at least 2016 — FCS entered into an illegal agreement that allocated chemotherapy treatments to FCS and radiation treatments to a competing oncology group.

The Antitrust Division of the Department also announced that it had entered into a deferred prosecution agreement (DPA), resolving the Sherman Act charge, with FCS.  Under the terms of the DPA, FCS admitted to conspiring to allocate chemotherapy and radiation treatments for cancer patients.  It also agreed to pay a $100 million criminal penalty, to cooperate fully with the Antitrust Division’s ongoing investigation into market allocation in the oncology industry, and to maintain an effective compliance program designed to prevent and detect criminal antitrust violations.

In addition, on April 30 the Florida Office of the Attorney General (OAG) announced that after a parallel civil investigation into oncology market allocation, it filed a civil complaint against FCS, charging it with violating Florida antitrust laws by conspiring in the market-allocation scheme.  The OAG stated that it had reached agreement with FCS on a proposed consent decree “to pay more than $20 million in disgorgement of profits and other relief over four years to resolve the investigation.”

FCS also reportedly agreed to comprehensive injunctive relief, including undertaking a “robust compliance program to ensure conformity with Florida’s antitrust laws,” and to continue to cooperate with the OAG’s ongoing investigation into the alleged market allocation.  The proposed agreement with FCS will still need to be approved by a court.

Note:  Antitrust and health-care compliance officers should take note of these resolutions with FCS, which is reportedly one of the largest independent oncology groups in the United States.  The Justice Department release made a point of stating that the Sherman Act change against FCS was only the first in its ongoing investigation of market allocation in the oncology industry.  As the Florida OAG also noted that its investigation is ongoing, both the Department and the OAG are likely to announce further resolutions with Florida oncology practices.

Antitrust compliance officers should therefore brief their companies’ senior management about the FCS resolutions, making clear that market allocation is a core antitrust violation, and use those resolutions in their in-house antitrust complaint training programs.

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