QOL Medical & CEO Agree to $47 Million Settlement Over Kickback Allegations

Pharmaceutical company QOL Medical LLC (QOL) and its CEO, Frederick E. Cooper, have agreed to pay $47 million to resolve allegations of orchestrating an elaborate kickback scheme. The allegations, brought under the False Claims Act (FCA), paint a picture of aggressive marketing tactics that veered dangerously into unethical territory, all in the name of driving prescriptions for the company’s flagship drug, Sucraid.

At the heart of the case is QOL’s alleged use of free Carbon-13 breath test kits, which were marketed to healthcare providers as a diagnostic tool for Congenital Sucrase-Isomaltase Deficiency (CSID)—a rare genetic condition treated by Sucraid. But there was a problem: these tests didn’t definitively diagnose CSID. Instead, they frequently flagged low sucrase activity, a symptom that can arise from several conditions, not just CSID.

From 2018 to 2022, QOL distributed these kits to providers, encouraging their use for patients with common gastrointestinal symptoms. The company went a step further, paying labs to analyze the tests and collecting anonymized—but highly detailed—patient data, including symptoms and test results. Armed with this information, QOL’s sales force zeroed in on healthcare providers whose patients had “positive” results, working to turn those test outcomes into Sucraid prescriptions.

The DOJ also flagged the company for over-the-top claims made during its sales efforts. Training materials reviewed by Cooper himself encouraged representatives to tell providers, “If you have a positive breath test, the patient will not improve unless you treat with Sucraid.” Such claims, unsupported by scientific evidence, drew sharp criticism from regulators.

Federal agencies didn’t hold back in their condemnation. Acting U.S. Attorney Joshua S. Levy noted that kickbacks don’t always look like cash. “Here, the defendants relied on free breath tests and misleading sales tactics to drive patients to their product. This conduct unnecessarily drained money from federal healthcare programs and improperly influenced treatment decisions,” he said.

Others echoed the sentiment. “Kickbacks have no place in our healthcare system,” said Chad Yarbrough of the FBI’s Criminal Investigative Division. Roberto Coviello of HHS-OIG warned of the risks posed by kickback schemes, emphasizing their ability to compromise medical decisions and waste taxpayer dollars.

The case’s origins trace back to former QOL employees, who filed a whistleblower complaint under the FCA. Their efforts, and the government’s subsequent intervention, played a crucial role in exposing the scheme. As a result, these whistleblowers will share approximately $8 million of the settlement—an illustration of the FCA’s power to encourage insiders to come forward.

For pharmaceutical companies, the stakes are high. Non-compliance doesn’t just bring financial penalties—it tarnishes reputations, undermines trust with patients and providers, and invites heightened scrutiny from regulators.

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