A Texas-based healthcare products distributor is set to pay $1.67 million to settle allegations of kickback violations that involved providing inventory management systems to clients at no cost in return for drug purchases over a six-year span.

The U.S. Department of Justice announced Dec. 13 that ASD Specialty Healthcare, doing business as Besse Medical, has agreed to pay the sum to settle allegations that it violated the Anti-Kickback Statute and False Claims Act by providing inventory management systems to retina practices at no cost to get them to buy drugs from Besse.

Based in Carrollton, TX, Besse distributes specialty medical and pharmaceutical products nationwide, including injections for neovascular age-related macular degeneration (wet AMD). 

As part of the settlement, the DoJ said, Besse admits that it acquired a commercially available inventory management system known as PODIS in May 2017. From then through November 2023, Besse offered PODIS at no cost to customers who met certain purchase requirements, including that they purchase wet AMD drugs from Besse and become a Besse customer if they weren’t one already.

The DoJ alleges that Besse caused physicians to submit false claims to Medicare, TRICARE and the Department of Veteran Affairs induced by these kickbacks.

“According to the allegations in today’s settlement, ASD purchased a commercially available product and leveraged it to gain business in violation of the AKS,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the DoJ’s Civil Division. “We will pursue kickbacks at all levels of the distribution chain to preserve the integrity of federal health care programs.”

The Anti-Kickback Statute prohibits any person, including specialty medical and pharmaceutical suppliers, from offering or paying, directly or indirectly, any remuneration — which includes money or anything of value, such as free inventory management systems — to induce the purchase of a drug that Medicare pays for.