Telugu CEO Agrees to $20 Million Penalty

Delaware-based pharmaceutical company BioTek reMEDys and its CEO, Chaitanya Gadde, have agreed to pay $20 million to settle allegations of violating the False Claims Act. The government accused BioTek of offering kickbacks to patients and physicians to protect its revenue stream.

Chaitanya Gadde, who is originally from Hyderabad, India, got his first degree in pharmacy from Bangalore University. He then went on to study pharmaceutical manufacturing at Long Island University and earned a Master of Business Administration from the University of Delaware.

From August 2015 to May 2020, the company allegedly routinely waived copayments for Medicare and TRICARE patients, encouraging them to purchase its drugs and services.

These drugs were often costly, and the copays were substantial. The government claimed that BioTek aimed to attract patients by waiving copays, even if they were not facing financial difficulties.

BioTek was also accused of providing gifts, dinners, and support services to physicians in exchange for patient referrals. Dr. David Tabby, a neurologist, was named as one who knowingly accepted such remuneration in return for referring patients to BioTek and separately paid $480,000 to settle these allegations.

The civil settlement also resolves claims under the whistleblower provisions of the False Claims Act, with former BioTek employees Shantae M. Wyatt and Latoya Sparrow receiving $4 million from the settlement with BioTek and Gadde and $91,200 from the settlement with Dr. Tabby.