EXHIBIT 10.1

 

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

 

X   UNITED STATES OF AMERICA : 11 Civ. 8196 (CM)   :     Plaintiff-Intervenor, :
Stipulation and Order of v.   : Settlement and Dismissal   : As to BioScrip,
Inc. NOVARTIS PHARMACEUTICALS CORP., and   :   BIOSCRIP, INC., :     :    
Defendants. :       X  

 

WHEREAS, this Stipulation and Order of Settlement and Dismissal (the
“Stipulation”) is entered into by and among plaintiff the United States of
America (the “United States”), by its attorney Preet Bharara, United States
Attorney for the Southern District of New York, and defendant BioScrip, Inc.
(“BioScrip”), through their respective authorized representatives;

 

WHEREAS, in November 2011, David Kester (“Relator,” and, together with the
United States and BioScrip, the “Settling Parties”) filed a sealed qui tam
action (the “Action”) in the United States District Court for the Southern
District of New York (the “Court”) pursuant to 31 U.S.C. § 3730(b), the qui tam
provision of the False Claims Act, 31 U.S.C. § 3729 et seq. (the “FCA”),
alleging, inter alia, that defendants Novartis Pharmaceuticals Corp.
(“Novartis”) and BioScrip violated the FCA and the Anti-Kickback Statute, 42
U.S.C. § 1320a-7b(b) (the “AKS”), in connection with distributing the iron
chelation drug Exjade;

 

WHEREAS, in October 2012, and in connection with its investigation of the
Relator’s allegations, the United States served a civil investigative demand on
BioScrip;

 

WHEREAS, on September 11, 2013, the United States first notified BioScrip that
the United States was contemplating civil claims against BioScrip under the FCA
relating to BioScrip’s distribution of Exjade (but did not at that time reveal
the existence of the Action under seal or the fact that BioScrip was named as a
defendant therein by the Relator);

 

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WHEREAS, commencing in late September 2013, the United States and BioScrip have
pursued extensive discussions concerning the claims against BioScrip that the
United States was contemplating;

 

WHEREAS, in connection with its discussions with the United States, BioScrip has
submitted records and information regarding its financial circumstances, and has
demonstrated to the United States that BioScrip lacks the financial wherewithal
to pay certain damages and penalties sought by the United States in connection
with its claims against BioScrip;

 

WHEREAS, on October 30, 2013, the United States further intervened in the Action
against Novartis based on Novartis’s alleged participation in a kickback scheme
with BioScrip;

 

WHEREAS, on January 6, 2014, the United States intervened against BioScrip and
submitted an Amended Complaint-in-Intervention;

 

WHEREAS, the United States’s Amended Complaint alleges — as relevant to this
settlement — that from February 2007 to May 2012, Novartis and BioScrip engaged
in a kickback scheme in connection with the distribution of Exjade (as set forth
in paragraphs 1-44, 142-232, and 252-273 of the Amended Complaint, the “Covered
Conduct”), resulting in violations of the FCA and the AKS and the payments of
Exjade claims by Medicare and Medicaid that should not have been reimbursed by
those federal healthcare programs;

 

WHEREAS, to avoid the delay, uncertainty, and expense of protracted litigation
of the above claims, the United States and BioScrip have reached a full and
final mutually agreeable resolution of these claims;

 

NOW, THEREFORE, IT IS HEREBY ORDERED that:

 

1. BioScrip consents to this Court’s exercise of personal jurisdiction over
BioScrip.

 

2. BioScrip admits and acknowledges the following facts:

 

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a.From November 2005 to May 2012, BioScrip contracted with Novartis to dispense
Exjade as part of Novartis’s “Exjade Patient Assistance and Support Services”
network (“EPASS”). During this period, BioScrip was one of three specialty
pharmacies permitted to dispense Exjade as part of EPASS (the “EPASS
pharmacies”).    

b.To prescribe Exjade through EPASS, physicians wrote patient prescriptions on
EPASS enrollment forms and submitted those forms to EPASS. Patient prescriptions
submitted to EPASS were distributed among the three EPASS pharmacies. EPASS was
required (by insurance companies and/or physicians) to refer certain patient
prescriptions to specific EPASS pharmacies. Approximately half of the patient
prescriptions received by EPASS were not designated for a particular pharmacy by
insurers or physicians. The distribution of those patients (the “undesignated
patient referrals”) among the three EPASS pharmacies was made at the direction
of Novartis.    

c.Upon receiving a patient referral from EPASS, BioScrip would dispense the
initial order of Exjade and, if the patient agreed, any refills of Exjade. For
refills, BioScrip understood that, even if a physician had prescribed such a
refill, third-party payors required patient consent before BioScrip could ship a
refill to an Exjade patient.    

d.Exjade patient referrals had economic value to BioScrip because having more
Exjade patients resulted in higher sales revenue, additional dispensing fees,
and additional rebates.    

e.Pursuant to its contract with Novartis, BioScrip collected data on the reasons
that patients stopped ordering Exjade refills and provided such data to Novartis
on a monthly basis. Based on this data, BioScrip knew that side effects and
doctors’ orders to discontinue therapy were among the most common reasons that
Exjade patients stopped ordering refills.    

f.In February 2007, Novartis informed BioScrip that the level of refill orders
among BioScrip’s Exjade patients was below the refill levels achieved by the
other two EPASS pharmacies.

  

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g.In February 2007, Novartis demanded that BioScrip implement a Performance
Improvement Plan (“PIP”) due to its low refill levels relative to the other
EPASS pharmacies. Specifically, Novartis informed BioScrip that it had to
increase its refill levels or Novartis would cut off the flow of undesignated
patient referrals to BioScrip and, potentially, remove BioScrip from EPASS.    

h.In response, and to avoid losing access to patient referrals, BioScrip
launched an intensive effort to (i) increase overall patient orders for Exjade
refills, and (ii) “restart” many patients who had stopped ordering Exjade. To
achieve that goal, BioScrip hired or reassigned a group of staff — including a
licensed practical nurse (“LPN”), two or three medical assistants, and several
customer service representatives — to work exclusively on Exjade (collectively,
the “Exjade Team”). BioScrip directed the Exjade Team to call many patients to
encourage them to order refills and to encourage many patients who had stopped
ordering refills to “restart” Exjade.    

i.The efforts of the Exjade Team resulted in significant increases in Exjade
refill levels at BioScrip — by September 2007, the refill levels at BioScrip
were higher than at the other two EPASS pharmacies. Recognizing the improvement
in refill levels at BioScrip, Novartis did not cut off the flow of undesignated
patient referrals or remove BioScrip from EPASS, but continued to direct patient
referrals, including undesignated patient referrals, to BioScrip.    

j.BioScrip developed a protocol for the Exjade Team to call patients to
encourage many patients to order refills and to encourage many patients who had
stopped ordering refills to restart Exjade, which BioScrip named “ScripCare” (or
“BioScripCare”). Under that protocol, the Exjade Team made the following kinds
of calls: (i) “assessment calls” or “survey calls,” during which patients were
told that they were receiving clinical counseling and education about Exjade,
(ii) calls to patients to encourage many of them to order refills, and (iii)
“recovery” calls to encourage many patients who had stopped ordering Exjade to
“restart.”

 

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k.In mid-2007, the LPN and the medical assistants on the Exjade Team were given
scripts for making calls to new patients to discuss Exjade therapy (the “Call
Scripts”). With regard to side effects, the Call Scripts indicated that Exjade
therapy could “cause some discomfort initially,” but that such discomfort
“usually resolves over time.”    

l.In developing ScripCare, BioScrip shared key elements of the protocol with
Novartis, including (i) how to discuss Exjade and its side effects with
patients, (ii) the sequence of the calls, and (iii) which team members would
make the calls. The Exjade marketing team at Novartis provided input on aspects
of the ScripCare protocol, including how to discuss potential side effects with
Exjade patients. At a January 2008 meeting at Novartis’s offices in New Jersey,
BioScrip discussed the Call Scripts with Novartis, and Novartis approved those
scripts.    

m.BioScrip continued to use the Exjade Call Scripts that Novartis had approved
in January 2008 until in or about November 2010. From 2007 to 2010, the
activities of the Exjade Team were discussed frequently in the monthly calls and
quarterly meetings that representatives from Novartis’s Exjade marketing and
managed markets teams held with BioScrip. During those discussions, Novartis did
not ask BioScrip or recommend for BioScrip to update the Call Scripts; and
BioScrip did not advise Novartis that it had made updates to these scripts,
since none were made.    

n.In or about July 2007, Novartis began issuing monthly “Exjade Scorecards” to
BioScrip that measured, among other things, BioScrip’s “adherence” scores. Based
on discussions with Novartis, BioScrip knew that the “adherence” scores in the
Exjade Scorecards were designed to show how long BioScrip’s Exjade patients
continued to order refills. BioScrip also knew that, in calculating the
adherence scores, Novartis did not exclude patients who stopped ordering refills
due to side effects or patients who were directed to stop therapy by their
doctors.

 

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o.In October 2007, Novartis began discussions with BioScrip about a plan to
allocate more undesignated patient referrals to BioScrip if, according to the
adherence scores in the Exjade Scorecards, it remained the highest performer in
terms of obtaining refill orders.    

p.As of January 2008, Novartis increased the rebates that BioScrip earned for
each Exjade shipment from $13 to $20 in recognition of BioScrip’s performance
and, as BioScrip understood, in order to encourage BioScrip to continue the
efforts of its Exjade Team.    

q.In 2008, Novartis actively pursued discussions with BioScrip regarding the
plan to provide additional undesignated patient referrals in return for
BioScrip’s achieving higher adherence scores relative to the other EPASS
pharmacies, and BioScrip committed to Novartis to “maintain[] a leadership
position in Exjade scorecard performance.”    

r.Prior to November 2008, BioScrip agreed to a new patient allocation plan
proposed by Novartis, which linked the percentage of undesignated patient
referrals for BioScrip to its refill rates as measured by the Exjade Scorecard.
   

s.Under that plan, Novartis allocated 60% of all undesignated patients to
BioScrip for the first half of 2009 because, according to the September 2008
Exjade Scorecard, BioScrip had generated the highest refill rates among the
three EPASS pharmacies. For the second half of 2009, Novartis allocated 40% of
undesignated patients to BioScrip based on its high refill rates in early 2009.
   

t.In 2008, Novartis also began to offer BioScrip “performance rebates” for
Exjade. From 2008 to 2010, the “performance rebates” were conditioned on
BioScrip meeting or exceeding quarterly shipment goals set by Novartis. Novartis
provided documents to BioScrip indicating that Novartis set these thresholds
based on its national marketing objectives.    

u.In March 2011, BioScrip was placed under a “corrective action” plan by
Novartis due to its low refill rates relative to the other EPASS pharmacies and
other issues, and stopped receiving undesignated patient referrals.

 

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v.In response to Novartis’s placing it under a corrective action plan, and to
regain access to patient referrals and improve its performance, BioScrip
launched an intensive effort, including changing its Exjade Team’s protocol, to
“restart” many patients and to encourage many patients to order refills.    

w.By late 2011, BioScrip’s refill rates had increased significantly; and,
starting in January 2012, Novartis allocated 60% of the undesignated patients
referrals to BioScrip based on its higher refill rates relative to the other
EPASS pharmacies in late 2011.

 

3. In settlement of the United States’ claims against BioScrip in this action,
BioScrip shall pay to the United States the sum of eleven million six hundred
eighty-five thousand and seven hundred and five dollars and forty-three cent
($11,685,705.43) (the “Settlement Amount”). BioScrip shall pay the Settlement
Amount pursuant to the following schedule: (i) on or before January 15, 2014,
BioScrip shall make an initial payment in the amount of two million three
hundred thirty-seven thousand and one hundred forty-one dollars ($2,337,141.00)
plus interest, compounded annually at the rate of 3.25%, accruing from the
Effective Date of this Stipulation (as defined in paragraph 24 below) to the
date of the initial payment; (ii) on or before January 15, 2015, BioScrip shall
make a second payment in the principal amount of four million six hundred
seventy-four thousand and two hundred eighty-two dollars ($4,674,282.00), plus
interest, compounded annually at the rate of 3.25%, accruing from the Effective
Date to the date of the second payment; and (iii) on or before January 15, 2016,
BioScrip shall make a final payment in the principal amount of four million six
hundred seventy-four thousand and two hundred eighty-two dollars and forty-three
ce ($4,674,282.43), plus interest, compounded annually at the rate of 3.25%,
accruing from the Effective Date to the date of the third payment. Further, in
connection with the entry of this Stipulation, BioScrip consents to the entry of
a judgment

 

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against BioScrip and for the United States in the Settlement Amount (a proposed
Consent Judgment is attached hereto as Exhibit A).

 

4. Subject to the exceptions in Paragraph 5 below (concerning excluded claims),
conditioned upon BioScrip’s timely payments of the full Settlement Amount
pursuant to paragraph 3, the United States, on behalf of itself, its officers,
agencies and departments, releases BioScrip, and all of its current and former
officers, directors, employees, servants, assigns, attorneys and agents from any
civil or administrative monetary claim the United States has under the FCA; the
Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a; the Program Fraud Civil
Remedies Act, 31 U.S.C. §§ 3801-3812; and the common law or equitable theories
of payment by mistake, unjust enrichment, negligence, and fraud, related to the
Covered Conduct.

 

5. Notwithstanding the release given in Paragraph 4 of this Stipulation, or any
other term of this Stipulation, the following claims of the United States are
specifically reserved and are not released by this Stipulation:

 

a.Any liability arising under Title 26, U.S. Code (Internal Revenue Code);    

b.Any criminal liability;    

c.Except as expressly stated in this Stipulation, any administrative liability,
including mandatory and permissive exclusion from Federal health care programs;
   

d.Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct; and    

e.Any liability based on obligations created by this Stipulation.

 

6. BioScrip waives and shall not assert any defenses it may have to any federal
criminal prosecution or federal administrative action relating to the Covered
Conduct that may be based in whole or in part on a contention that, under the
Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the
Excessive Fines Clause in the Eighth Amendment

 

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of the Constitution, this Stipulation bars a remedy sought in such federal
criminal prosecution or federal administrative action. Nothing in this paragraph
or any other provision of this Stipulation constitutes an agreement by the
United States concerning the characterization of the Settlement Amount for
purposes of the Internal Revenue laws, Title 26 of the United States Code.

 

7. BioScrip fully and finally releases the United States, and its agencies,
officers, employees, servants, and agents from any claims (including attorneys’
fees, costs, and expenses of every kind and however denominated) that BioScrip
has asserted, could have asserted, or may assert in the future against the
United States, and its agencies, officers, employees, servants, and agents,
related to the Covered Conduct and the United States’ investigation and
prosecution thereof.

 

8. In consideration of (i) execution of this Stipulation by the Relator and (ii)
the Relator’s releases as set forth in paragraph 9 below, BioScrip and all of
its current and former officers, directors, employees, assigns, attorneys, and
agents, on behalf of themselves and their heirs, attorneys, agents, successors,
and assigns, release the Relator, his heirs, attorneys, agents, successors, and
assigns, from any and all claims for any action, event, or conduct related to
the Relator’s allegations in this Action.

 

9. Conditioned upon BioScrip’s full payment of the Settlement Amount, the
Relator, for himself and his heirs, successors, attorneys, agents, and assigns,
releases BioScrip and all of its current and former officers, directors,
employees, assigns, attorneys, and agents, from any and all manner of claims,
proceedings, liens, and causes of action of any kind or description that the
Relator has against BioScrip related to the Relator’s allegations in this
Action; provided, however, that nothing in this Stipulation shall preclude
Relator from seeking to recover his reasonable expenses and attorneys’ fees and
costs from BioScrip pursuant to 31 U.S.C. §

 

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3730(d) or be deemed to have released his claims under 31 U.S.C. § 3730(d) for
such reasonable expenses and attorneys’ fees and costs.

 

10. The Relator shall not object to this Stipulation but agrees and confirms,
pursuant to 31 U.S.C. § 3730(c)(2)(B), that the terms of this Stipulation are
fair, adequate, and reasonable under all the circumstances.

 

11. The Settlement Amount shall not be decreased as a result of the denial of
claims for payment now being withheld from payment by any Medicare carrier or
intermediary, or any federal or state payer, related to the Covered Conduct; and
BioScrip agrees not to resubmit to any Medicare carrier or intermediary or any
federal or state payer any previously denied claims related to the Covered
Conduct, and agrees not to appeal any such denials of claims.

 

12. BioScrip agrees to cooperate fully and truthfully with the United States’
investigation of individuals and entities not released in this Stipulation.
Specifically, BioScrip shall provide truthful and complete disclosure of all
non-privileged documents and information requested by the United States relating
to the allegations in the United States’s Amended Complaint-in-Intervention.
Further, BioScrip agrees to furnish to the United States, upon request, complete
and un-redacted copies of all non-privileged documents, reports, memoranda of
interviews, and records in its possession, custody, or control concerning any
investigation of the Covered Conduct that it has undertaken, or that has been
performed by another on its behalf. Additionally, BioScrip shall encourage, and
agrees not to impair, the cooperation of its directors, officers, and employees,
and shall use its best efforts to make available, and encourage, the cooperation
of former directors, officers, and employees for interviews and testimony,
consistent with the rights and privileges of such individuals.

 

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13. Subject to the exceptions in Paragraph 5, in consideration of BioScrip’s
obligations under this Stipulation, the United States shall promptly file
appropriate papers to dismiss without prejudice the claims against BioScrip in
the United States’s Amended Complaint-in-Intervention after the Court enters
this Stipulation and the Consent Judgment attached as Exhibit A. Further,
promptly after BioScrip pays the Settlement Amount pursuant to Paragraph 3, the
United States shall file a satisfaction of judgment as to the Consent Judgment
and the appropriate papers to dismiss with prejudice the claims against BioScrip
in the United States’s Amended Complaint-in-Intervention. Provider, however,
that the Court shall retain jurisdiction over this Stipulation and the Settling
Parties until such time as BioScrip has paid the Settlement Amount pursuant to
Paragraph 3 and completed its obligations under Paragraph 12 and until the Court
has decided or the Settling Parties have resolved the Relator’s claims against
Bioscrip for reasonable expenses, attorneys’ fees and costs and against the
United States for a share of the proceeds of this Settlement.

 

14. BioScrip shall be in default of this Stipulation if it fails to make any of
the three payments set forth in Paragraph 3, in whole or in part, on or before
the due date for such payment. The United States will provide written notice of
any default, to be sent by e-mail and first-class mail to one or more of the
counsel for BioScrip identified in Paragraph 23. In the event of default, the
entire remaining unpaid balance of the Settlement Amount shall be immediately
due and payable by BioScrip, and interest shall accrue at the rate of 12% per
annum compounded daily on the remaining unpaid principal balance, beginning
seven (7) business days after delivery of the notice of default. If the
Settlement Amount, with all accrued interest, is not paid in full within seven
(7) business days following delivery of the notice of default, BioScrip shall
agree to entry of a Consent Judgment in favor of the United States against
BioScrip in the

 

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amount of the unpaid balance, and the United States, at its option, may (a)
rescind this Stipulation and reinstate the claims asserted against BioScrip in
its Amended Complaint-in-Intervention in this Action; (b) seek specific
performance of the Stipulation; (c) offset the remaining unpaid balance from any
amounts due and owing BioScrip at the time of default by any department, agency,
or agent of the United States; or (d) exercise any other rights granted by law,
or under the terms of this Stipulation, or recognizable at common law or in
equity. BioScrip shall not contest any offset imposed or any collection action
undertaken by the United States pursuant to this paragraph, either
administratively or in any Federal or State court. In addition, BioScrip shall
pay the United States all reasonable costs of collection and enforcement under
this paragraph, including attorneys’ fees and expenses. In the event that the
United States opts to rescind this Stipulation, BioScrip shall not plead, argue,
or otherwise raise any defense under the theories of statute of limitations,
laches, estoppel, or similar theories, to any civil or administrative claims
that relate to the Covered Conduct.

 

15. BioScrip agrees to the following:

 

a.Unallowable Costs Defined: All costs (as defined in the Federal Acquisition
Regulation, 48 C.F.R. § 31.205-47; and in Titles XVIII and XIX of the Social
Security Act, 42 U.S.C. §§ 1395-1395kkk-1 and 1396-1396w-5; and the regulations
and official program directives promulgated thereunder) incurred by or on behalf
of BioScrip, its present or former officers, employees, and agents in connection
with:    

(1)the matters covered by this Stipulation;    

(2)the United States’s civil investigation of the Covered Conduct;    

(3)the investigation, defense, and corrective actions undertaken by BioScrip in
response to the United States’s civil investigation of the Covered Conduct
(including attorney’s fees);    

(4)the negotiation and performance of this Stipulation;

 

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(5)the payments BioScrip makes to the United States pursuant to this Stipulation
and any payments that BioScrip may make to Relator, including costs and
attorneys fees; and    

(6)the negotiation of, and obligations undertaken pursuant to any integrity
agreement relating to the Covered Conduct with HHS-OIG to (i) retain an
independent review organization to perform annual reviews of required by any
such integrity agreement, and (ii) prepare and submit reports to the OIG-HHS,
are unallowable costs for government contracting purposes and under the Medicare
Program, Medicaid Program, TRICARE Program, and Federal Employees Health
Benefits Program (FEHBP) (hereinafter referred to as Unallowable Costs).
However, nothing in this Paragraph (i.e., Paragraph 15(a)(6)) that may apply to
the obligations undertaken pursuant to any such integrity agreement affects the
status of costs that are not allowable based on any other authority applicable
to BioScrip.    

b.Future Treatment of Unallowable Costs: Unallowable Costs shall be separately
determined and accounted for by BioScrip, and BioScrip shall not charge such
Unallowable Costs directly or indirectly to any contracts with the United States
or any State Medicaid program, or seek payment for such Unallowable Costs
through any cost report, cost statement, information statement, or payment
request submitted by BioScrip or any of its agencies or departments to the
Medicare, Medicaid, TRICARE, or FEHBP Programs.    

c.Treatment of Unallowable Costs Previously Submitted for Payment: BioScrip
further agrees that within 90 days of the Effective Date of this Agreement it
shall identify to applicable Medicare and TRICARE fiscal intermediaries,
carriers, and/or contractors, and Medicaid and FEHBP fiscal agents, any
Unallowable Costs (as defined in this Paragraph) included in payments previously
sought from the United States, or any State Medicaid program, including, but not
limited to, payments sought in

  

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any cost reports, cost statements, information reports, or payment requests
already submitted by BioScrip or any of its agencies or departments, and shall
request, and agree, that such cost reports, cost statements, information
reports, or payment requests, even if already settled, be adjusted to account
for the effect of the inclusion of the unallowable costs. BioScrip agrees that
the United States, at a minimum, shall be entitled to recoup from BioScrip any
overpayment plus applicable interest and penalties as a result of the inclusion
of such Unallowable Costs on previously-submitted cost reports, information
reports, cost statements, or requests for payment. The United States reserves
its rights to disagree with any calculations submitted by BioScrip or any of its
rights to audit, examine, or re-examine BioScrip’s books and records to
determine that no Unallowable Costs have been claimed in accordance with the
provisions of this Paragraph, and to disagree with any calculations submitted by
BioScrip or any of its agencies or departments concerning any Unallowable Costs
included in payments previously sought by BioScrip, or the effect of any such
Unallowable Costs on the amount of such payments.

 

16. Except as expressly provided to the contrary in this Stipulation, this
Stipulation is intended to be for the benefit of the Settling Parties only. The
Settling Parties do not release any claims against any other person or entity.

 

17. If within 91 days of the Effective Date or of any payment made under this
Stipulation, BioScrip commences any case, proceeding, or other action under any
law relating to bankruptcy, insolvency, reorganization, or relief of debtors (a)
seeking to have any order for relief of BioScrip’s debts, or seeking to
adjudicate BioScrip as bankrupt or insolvent; or (b) seeking appointment of a
receiver, trustee, custodian, or other similar official for BioScrip or for all
or any substantial part of its assets, BioScrip agrees as follows:

 

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a.BioScrip’s obligations under this Stipulation may not be avoided pursuant to
11 U.S.C. § 547, and BioScrip shall not argue or otherwise take the position in
any such case, proceeding, or action that: (i) BioScrip’s obligations under this
Stipulation may be avoided under 11 U.S.C. § 547; (ii) BioScrip was insolvent at
the time this Stipulation was entered into, or became insolvent as a result of
the payments made to the United States; or (iii) the mutual promises, covenants,
and obligations set forth in this Stipulation do not constitute a
contemporaneous exchange for new value given to BioScrip.    

b.If BioScrip’s obligations under this Stipulation are avoided for any reason,
including, but not limited to, through the exercise of a trustee’s avoidance
powers under the Bankruptcy Code, the United States, at its sole option, may
rescind the releases in this Stipulation and bring any civil and/or
administrative claim, action, or proceeding against BioScrip for the claims that
would otherwise be covered by the releases provided in Paragraph 5 above.
BioScrip agree that (i) any such claims, actions, or proceedings brought by the
United States are not subject to an “automatic stay” pursuant to 11 U.S.C. §
362(a) as a result of the action, case, or proceedings described in the first
clause of this paragraph, and BioScrip shall not argue or otherwise contend that
the United States’ claims, actions, or proceedings are subject to an automatic
stay; (ii) BioScrip shall not plead, argue, or otherwise raise any defenses
under the theories of statute of limitations, laches, estoppel, or similar
theories, to any such civil or administrative claims, actions, or proceeding
that are brought by the United States within 60 calendar days of written
notification to BioScrip that the releases have been rescinded pursuant to this
paragraph; and (iii) the United States has a valid claim against BioScrip in the
amount of eleven million six hundred eighty-five thousand and seven hundred and
five dollars and forty-three cents ($11,685,705.43), and the United States may
pursue its claim in the case, action, or proceeding referenced in the

 

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first clause of this paragraph, as well as in any other case, action, or
proceeding.    

c.BioScrip acknowledges that its agreements in this paragraph are provided in
exchange for valuable consideration provided in this Stipulation.

 

18. BioScrip agrees that it waives and shall not seek payment of any of the
health care billings covered by this Stipulation from any health care
beneficiaries or their parents, sponsors, legally responsible individuals, or
third-party payors based upon the claims submitted in connection with the
Covered Conduct.

 

19. This Stipulation is governed by the laws of the United States. The exclusive
jurisdiction and venue for any dispute relating to this Stipulation is the
United States District Court for the Southern District of New York. For purposes
of construing this Stipulation, it shall be deemed to have been drafted by the
Settling Parties, and shall not, therefore, be construed against any Settling
Party for that reason in any subsequent dispute.

 

20. Each of the Settling Parties shall bear its own legal and other costs
incurred in connection with this matter, including the preparation and
performance of this Stipulation; provided, however, nothing in this Stipulation
shall preclude Relator from seeking to recover his/her expenses or attorney’s
fees and costs from BioScrip, pursuant to 31 U.S.C. § 3730(d), or BioScrip from
opposing such a request by the Relator.

 

21. The undersigned counsel and other signatories represent and warrant that
they are fully authorized to execute this Stipulation on behalf of the persons
and entities indicated below.

 

22. This Stipulation may be executed in counterparts, each of which constitutes
an original and all of which constitute one and the same Stipulation. Facsimiles
of signatures shall constitute acceptable, binding signatures for purposes of
this Stipulation.

 

Page 16 of 18

 

 

23. Any notice pursuant to this Stipulation shall be in writing and shall,
unless expressly provided otherwise herein, be delivered by express courier and
by e-mail transmission, followed by postage-prepaid mail, to the following
representatives:

 

TO THE UNITED STATES:       Li Yu, Rebecca C. Martin, and Ellen M. London  
Assistant United States Attorneys   Southern District of New York   86 Chambers
Street, 3rd Floor   New York, NY 10007   E-mail:   Li.Yu@usdoj.gov    
Rebecca.Martin@usdoj.gov     Ellen.London@usdoj.gov  

 

TO THE RELATOR:       Shelley Slade, Esq.   Vogel, Slade & Goldstein, LLP   1718
Connecticut Ave., N.W., 7th Floor   Washington, D.C. 20017   E-mail:
SSlade@vsg-law.com  

  

TO BIOSCRIP:       Mary Clare Bonaccorsi   Polsinelli PC,   161 N. Clark Street,
Suite 4200   Chicago, IL 60601   Email: MBonaccorsi@polsinelli.com  

 

James R. DeVita   Day Pitney LLP   7 Times Square   New York, New York 10036  
Email: JDevita@daypitney.com  

  

24. The effective date of this Stipulation is the date upon which this
Stipulation is entered by the Court (the “Effective Date).

 

Page 17 of 18

 

 

25. This Stipulation constitutes the complete agreement between the Settling
Parties. This Stipulation may not be amended except by written consent of the
Settling Parties.

  

For the United States:   For BioScrip:       Dated:   January 6, 2014   Dated:  
January 6, 2014             Preet Bharara     Polsinelli PC   United States
Attorney                 By: /s/ Li Yu   By: /s/ Mary Clare Bonaccorsi   LI YU  
  MARY CLARE BONACCORSI, Esq.   REBECCA C. MARTIN     MARK GORAN, Esq.   ELLEN
M. LONDON     161 N. Clark Street, Suite 4200   Assistant United States
Attorneys     Chicago, IL 60601   86 Chambers Street, 3rd Floor         New
York, New York 10007                 Dated: January 3, 2014     Day Pitney LLP  
          Department of Health and Human   By: /s/ James R. DeVita   Services  
  JAMES R. DEVITA, Esq.         7 Times Square By: /s/ Robert K. DeConti     New
York, New York 10036   ROBERT K. DECONTI         Assistant Inspector General for
Legal Affairs     Bioscrip, Inc.   Office of Counsel to the Inspector General  
      Office of the Inspector General   By: /s/ Kimberlee C. Seah        
Kimberlee C. Seah For the Relator:     General Counsel         Dated: December
23, 2013   By: /s/ Russell Corvese         RUSSELL CORVESE   Vogel, Slade &
Goldstein, LLP     Senior Vice President           By: /s/ Shelly R. Slade      
  SHELLY R. SLADE, Esq.                   /s/ David Kester         DAVID KESTER
     

   

  SO ORDERED:   January 8, 2014       /s/ Colleen McMahon   HON. COLLEEN MCMAHON
  UNITED STATES DISTRICT JUDGE

 

Page 18 of 18

 

 

Exhibit A

 

 

 

 

PREET BHARARA United States Attorney for the Southern District of New York By:
LI YU   REBECCA C. MARTIN   ELLEN M. LONDON Assistant United States Attorneys 86
Chambers Street, 3rd Floor New York, New York 10007

Tel: (212) 637-2734/2714/2737 

 

  X   UNITED STATES OF AMERICA, : 11 Civ. 8196 (CM)   :    
Plaintiff-Intervenor, : v.   :   : ECF Case NOVARTIS PHARMACEUTICALS CORP.,
and   :   BIOSCRIP, INC., :     : CONSENT JUDGMENT   Defendants. :       X  

  

Upon the consent of plaintiff-intervenor the United States of America and
defendant BioScrip, Inc., following the entry of a Stipulation and Order of
Settlement by this Court, which is hereby incorporated by reference;

 

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

 

That plaintiff-intervenor the United States of America shall have judgment in
the sum of $11,685,705.43 as of January 8, 2014, as against defendant BioScrip,
Inc., plus interest, compounded annually at the rate of 3.25%, accruing from
January 8, 2014.

 

Consented to by:

 

    PREET BHARARA     United States Attorney         By: /s/ Li Yu     LI YU    
REBECCA C. MARTIN     ELLEN M. LONDON     Assistant United States Attorneys    
86 Chambers Street, 3rd Floor     New York, New York 10007     Counsel for the
United States

   

 

 

  

    Polsinelli PC       By: /s/ Mary Clare Bonaccorsi     MARY CLARE BONACCORSI,
Esq.     MARK GORAN, Esq.     161 N. Clark Street, Suite 4200     Chicago, IL
60601

 

    Day Pitney LLP         By: /s/ James R. DeVita     JAMES R. DEVITA, Esq.    
7 Times Square     New York, New York 10036     Counsel for Defendant BioScrip,
Inc.

 

SO ORDERED:       /s/ Colleen McMahon   HON. COLLEEN MCMAHON   UNITED STATES
DISTRICT JUDGE       For Clerk of the Court:       By:     Deputy Clerk