Health Law Daily Wrap Up, ANTI-KICKBACK PROHIBITION—SETTLEMENT AGREEMENTS: Veloxis to pay largest Sunshine Act recovery in history, (Aug 13, 2026)

By Sherri M. Schroeder, J.D.

The drug maker has agreed to pay over $46 million to settle criminal and civil allegations involving its kidney transplant immunosuppression drug, known as Envarsus XR.

Veloxis Pharmaceuticals, Inc., a Delaware corporation headquartered in Cary, North Carolina, has entered into agreements to settle the civil and criminal allegations made against it in a qui tam action filed in a Massachusetts district court. Veloxis admitted, acknowledged, and accepted responsibility for the facts set forth in the Settlement Agreement, which lays out a marketing scheme in violation of the Anti-Kickback Statute in the False Claims Act (FCA) and the Sunshine Act (also known as the Open Payments Program) whereby Veloxis paid kickbacks to induce prescriptions and purchases of its kidney transplant immunosuppression drug Envarsus XR. To settle the civil allegations against it, Veloxis agreed to pay $21,211.251 to the U.S., $13,238,749 to certain Medicaid participating states, and a $1.55 million civil penalty to CMS under the Sunshine Act. This is the largest Sunshine Act recovery since the law was passed in 2010, per the Department of Justice (DOJ) press release. In addition, Veloxis agreed to enter into a deferred prosecution agreement (DPA) and a five-year corporate integrity agreement (CIA) and to pay a criminal penalty of more than $10 million, per the Department of Justice (DOJ) press release (Settlement Agreement, U.S. ex rel. Toulsor1, Inc. v. Veloxis Pharmaceuticals A/S, No. 1:20-cv-11575 (D. Mass.) (Aug. 10, 2026)).

Admitted facts. During the relevant period of January 1, 2016, to June 30, 2023, Veloxis manufactured and sold one drug—Envarsus, an extended-release drug approved by the FDA for use as an immunosuppressant in adult kidney transplant recipients. Due to the low cost of its generic equivalent, Envarsus initially struggled to gain market share. Therefore, Veloxis began to influence health care professionals (HCPs) and certain specialty pharmacies to dispense the drug to transplant patients. This included paying kickbacks to HCPs in the form of lavish meals, alcoholic beverages, expensive trips, resort stays, gifts, and purported “consulting fees.” Veloxis then concealed these payments by falsifying expense reports, paying for consulting work that was not actually performed, and failing to properly report to CMS the amounts of Veloxis’s payments to HCPs under CMS’s Open Payments Program.

Veloxis also admitted that from July 1, 2017, to March 31, 2023, it knowingly and willfully paid thousands of dollars in kickbacks to certain specialty pharmacies in the form of per-patient and per-month payments to induce those pharmacies to buy Envarsus. Veloxis made those payments pursuant to purported enhanced services agreements, which were offered to the pharmacies to induce them to begin or continue purchasing Envarsus instead of competitor drugs including the cheaper generic. Veloxis then disguised the unlawful purpose of the kickback payments by falsely describing the payments in the agreements as being for data and/or adherence services provided to or for Veloxis. In fact, Veloxis paid the pharmacies regardless of whether they provided any data. When data was actually sent, typically no one at Veloxis reviewed or used the data.

From March 31, 2020, to March 31, 2023, Veloxis also admitted to knowingly falsifying company expense reports to conceal or understate the amounts of transfers of value to HCPs by adding the names of non-attendees to lists of attendees of certain meals or events to artificially reduce the purported per-person cost), omitting the names of physician attendees, and falsely labeling certain physician expenses using a category for non-physician expenses.

Civil settlement. To settle the civil claims against it, Veloxis agreed to pay $21,211,250.99, plus interest, to the U.S.; of this amount, $12,120,714,85 was restitution. Veloxis will also pay an additional $1,550,000.00, plus interest, for the admitted conduct (knowingly failing to report to CMS certain physician payments under the Open Payments Program) covered by the Sunshine Act. Veloxis also agreed to pay $13,238,749.01, plus interest, to the affected Medicaid participating states; of this amount, $7,564,999.43 was restitution. Toulsor1, Inc., as relator, will receive part of the U.S.’s settlement pursuant to the qui tam provisions of the FCA.

Criminal settlement. Veloxis entered into a deferred prosecution agreement (DPA) in connection with criminal claims charging Veloxis with conspiracy to commit violations of the federal Anti-Kickback Statute “by paying for, among other things, lavish meals, alcohol, and luxury resort stays, to induce health care providers to recommend or prescribe Envarsus,” per the DOJ’s press release. As part of this DPA, Veloxis also agreed to pay a criminal penalty of more than $10 million. Veloxis also agreed to implement a five-year, “significant” corporate compliance program, per the press release, which includes adoption of enhanced policies, procedures, and internal controls designed to deter and detect Anti-Kickback Statute violations and implementation of enhanced oversight, reporting, and enforcement mechanisms.

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