BOSTON, MA – August 11, 2026 (STL.News) Veloxis Pharmaceuticals Inc. has agreed to pay more than $46 million to resolve criminal and civil allegations that it used illegal kickbacks to boost prescriptions of its kidney transplant drug, Envarsus XR, in one of the Justice Department’s most significant healthcare fraud enforcement actions of the year. The resolution also includes what federal officials describe as the largest recovery ever obtained under the federal Physician Payments Sunshine Act since the law took effect in 2010.
The Cary, North Carolina-based pharmaceutical company entered into a three-year Deferred Prosecution Agreement (DPA) with the U.S. Department of Justice after prosecutors filed a criminal information in the U.S. District Court for the District of Massachusetts alleging that the company conspired to violate the federal Anti-Kickback Statute.
Under the agreement, Veloxis will pay a criminal penalty of approximately $10.04 million, resolve related civil allegations for $34.45 million under the False Claims Act, and pay an additional $1.55 million to settle allegations involving violations of the Open Payments Program, commonly known as the Sunshine Act. Together, the payments exceed $46 million.
Veloxis Alleged Kickback Scheme
According to federal prosecutors, Veloxis allegedly provided healthcare professionals with expensive meals, alcoholic beverages, luxury resort accommodations and other items of value to induce physicians and other healthcare providers to prescribe Envarsus XR, an extended-release tacrolimus medication used to prevent organ rejection in kidney transplant recipients.
The government further alleged that the company provided improper financial benefits to hospital personnel and specialty pharmacies involved in the prescribing and dispensing of the drug.
Federal authorities contend these practices violated the Anti-Kickback Statute. This federal law prohibits offering or paying remuneration to induce referrals or purchases reimbursed by Medicare, Medicaid, and other federal healthcare programs.
The government alleged that the resulting prescriptions generated false reimbursement claims submitted to federal healthcare programs, giving rise to liability under the False Claims Act. The allegations were resolved through the settlement and Deferred Prosecution Agreement, and were not decided by a court following trial.
Veloxis – Understanding the Anti-Kickback Statute
The federal Anti-Kickback Statute is one of the government’s primary tools for policing fraud involving federally funded healthcare programs.
The law generally prohibits pharmaceutical manufacturers, medical device companies, hospitals, physicians, pharmacies, and other healthcare providers from offering or receiving anything of value in exchange for referrals or purchases involving Medicare, Medicaid, TRICARE, or other federal healthcare programs.
Federal regulators argue that kickbacks undermine independent medical judgment by allowing financial incentives to influence prescribing decisions rather than patient needs.
Violations may result in criminal prosecution, civil monetary penalties, exclusion from federal healthcare programs, and False Claims Act liability.
Healthcare compliance experts have long warned that pharmaceutical companies must carefully structure educational programs, speaker events, consulting arrangements, and physician interactions to ensure they comply with federal fraud and abuse laws.
Veloxis – False Claims Act allegations
In addition to the criminal allegations, Veloxis resolved civil claims under the False Claims Act.
The False Claims Act allows the United States to recover damages when false or fraudulent claims are submitted for payment to the federal government.
In healthcare cases, prosecutors frequently argue that claims submitted after illegal kickbacks are “false” because the underlying transactions violated federal law.
Although many False Claims Act cases begin with whistleblower lawsuits filed under the Act’s qui tam provisions, the Department of Justice independently investigates the allegations before determining whether to intervene.
The settlement resolves the government’s civil claims without a judicial determination of liability.
Veloxis – Record Sunshine Act recovery
One of the most notable aspects of the settlement involves the $1.55 million payment to resolve allegations that Veloxis knowingly failed to properly report certain physician payments under the federal Open Payments Program.
Established by the Physician Payments Sunshine Act, the Open Payments database requires drug manufacturers and medical device companies to disclose many payments and transfers of value made to physicians and teaching hospitals.
The reporting system is intended to improve transparency by allowing regulators, researchers, journalists, and the public to review financial relationships between healthcare providers and industry.
According to the Department of Justice, the Sunshine Act portion of this settlement represents the largest recovery obtained under the statute since its enactment in 2010.
Veloxis – Deferred prosecution agreement
Rather than requiring an immediate guilty plea, federal prosecutors entered into a three-year Deferred Prosecution Agreement with Veloxis.
Under a DPA, criminal charges are filed, but prosecution is postponed while the company satisfies specified obligations.
If the company fully complies with the agreement—including payment of penalties, implementation of compliance measures, and continued cooperation—the government may ultimately dismiss the criminal charge.
Failure to comply could allow prosecutors to resume the criminal case.
Deferred prosecution agreements have become a common enforcement tool in complex corporate healthcare fraud investigations because they permit prosecutors to impose significant compliance reforms while avoiding the collateral consequences that may accompany a criminal conviction.
Veloxis – Corporate Integrity Agreement
As part of the resolution, Veloxis also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General.
Corporate Integrity Agreements typically require companies to strengthen internal compliance programs through enhanced training, independent monitoring, executive certifications, auditing, reporting obligations, and board oversight.
Such agreements often remain in effect for several years and are intended to reduce the likelihood of future violations involving federal healthcare programs.
Why the case matters
The Veloxis resolution reflects the federal government’s continued emphasis on pharmaceutical marketing practices and healthcare fraud enforcement.
The Department of Justice, HHS Office of Inspector General, the FBI, and other agencies have increasingly focused on arrangements that may improperly influence prescribing decisions or increase costs to Medicare and Medicaid.
Healthcare companies continue to face significant enforcement risks involving:
- Speaker programs
- Physician consulting arrangements
- Meals and entertainment
- Educational events
- Travel and lodging expenses
- Payments involving specialty pharmacies
- Relationships with transplant centers and other referral sources
Compliance failures in these areas frequently generate parallel criminal, civil, and administrative investigations.
Continuing enforcement trend
The settlement also demonstrates the government’s willingness to pursue multiple enforcement authorities simultaneously.
Rather than relying solely on criminal prosecution or civil litigation, federal investigators combined:
- Criminal Anti-Kickback Statute allegations;
- Civil False Claims Act claims;
- Open Payments (Sunshine Act) reporting allegations; and
- Long-term compliance obligations through a Corporate Integrity Agreement.
This coordinated approach has become increasingly common in healthcare fraud enforcement, allowing regulators to recover substantial financial penalties while requiring companies to strengthen corporate governance and compliance programs.
For pharmaceutical manufacturers, the case serves as another reminder that physician marketing practices remain a top enforcement priority and that failures involving transparency reporting can carry substantial financial consequences in addition to traditional fraud allegations.
The Justice Department’s action underscores the continued federal commitment to protecting the integrity of taxpayer-funded healthcare programs while ensuring prescribing decisions remain based on medical judgment rather than financial incentives.
