Pharmaceutical Manufacturer Pays Over $46M to Resolve AKS and FCA Allegations, Including Largest-Ever Sunshine Act Penalty

Key Takeaways

• DOJ secured the largest Sunshine Act recovery to date as part of a $46 million-plus pharmaceutical Anti-kickback Statute and False Claims Act resolution.
• Open Payments reporting failures can result in increased penalties when combined with AKS and FCA exposure if inaccurate disclosures help conceal improper relationships with healthcare professionals.
• Pharmaceutical manufacturers should reassess Open Payments reporting requirements for physician engagements, consulting arrangements, meals, travel.

DOJ’s $46 Million Veloxis AKS, FCA, and Sunshine Act Resolution

On August 10, 2026, the U.S. Department of Justice (“DOJ”) and Office of Inspector General (“OIG”) announced that Veloxis Pharmaceuticals agreed to pay over $46 million to resolve criminal and civil liability arising from an alleged kickback scheme involving improper payments to health care professionals and specialty pharmacies. The resolution also marks the largest settlement to date for violations of the Open Payments Program (“Sunshine Act”) reporting requirements. The Veloxis resolution demonstrates that DOJ and OIG will continue to leverage the Sunshine Act as a complementary theory in kickback and False Claims Act (“FCA”) prosecutions.

According to DOJ and OIG, Veloxis engaged in a scheme to pay kickbacks, including lavish meals, alcohol, luxury resort stays, and sham consulting-agreement payments, to induce healthcare professionals to prescribe the company’s product. Veloxis also made improper payments to specialty pharmacies for certain enhanced services without regard to whether such services were actually performed. The government further alleged that Veloxis knowingly failed to report these payments to physicians through the Open Payments database.

What Are the Sunshine Act and Open Payments Reporting Requirements?

The Sunshine Act is a federal transparency law requiring pharmaceutical and medical device manufacturers and group purchasing organizations (“GPOs”) to make annual reports of transfers of value made to covered recipients, including physicians, physician assistants, nurse practitioners, among other practitioners, as well as teaching hospitals. The data is published on the Centers for Medicare & Medicaid Services (“CMS”) Open Payments database, a publicly searchable website.

Failure to report may give rise to the imposition of civil monetary penalties of $1,000 to $10,000 per unreported payment or transfer of value, subject to an annual maximum of $150,000 per annual submission. For knowing failures to report, the potential penalties increase to $10,000 to $100,000 per unreported item, with an annual maximum of $1,000,000.

The Veloxis settlement shows that DOJ and OIG will continue to view Open Payment transparency violations not merely as technical infractions but also as integral components of broader fraudulent and kickback schemes.

What the Veloxis Settlement Means for Pharmaceutical Manufacturers

This settlement is significant for several reasons:

• Record Sunshine Act Resolution. The settlement included a $1.55 million civil penalty for knowing failure to make required annual reports of payments to physicians through the Open Payments database, which marks the largest settlement ever tied to Sunshine Act reporting failures. This continues a recent trend of AKS and FCA cases being coupled with substantial penalties for Sunshine Act noncompliance, including a $1.1 million 2020 settlement and a $1 million 2021 settlement with medical device manufacturers.

• Convergence of AKS and Sunshine Act Enforcement. The Veloxis resolution makes clear that DOJ and OIG will continue to leverage the Sunshine Act as a complementary theory in kickback and False Claims Act prosecutions. Companies that fail to accurately report transfers of value may find that those omissions are used as evidence of an intent to conceal improper financial relationships.

How AGG Can Help

AGG’s Healthcare and Food & Drug teams regularly advise manufacturers and providers on federal fraud and abuse laws, including the federal Anti-Kickback Statute and False Claims Act, and on Open Payments Sunshine Act reporting requirements. For more information, please contact AGG Healthcare partner Charmaine Mech Aguirre.