PHILADELPHIA, PA — United States Attorney Jacqueline C. Romero announced that Avantor, Inc., based in Radnor, PA, has agreed to a $5.325 million settlement to resolve multiple alleged violations of federal law. This settlement addresses issues involving fraudulent overcharging and compliance failures.
First, Avantor will pay $5 million to settle allegations that its subsidiary, VWR International, LLC (VWR), violated the False Claims Act by overcharging federal agencies for goods between 2008 and 2017. Avantor acquired VWR in 2017.
VWR, a global distributor of scientific and technical laboratory supplies, entered into procurement contracts with U.S. agencies. These contracts required VWR to offer federal buyers the same or better prices as their most favored private-sector customers.
The United States’ allegations under the False Claims Act involve four government contracts with VWR. These include two Multiple Award Schedule Contracts (GSA MAS Contracts) with the U.S. General Services Administration (GSA) in 1995 and 2015, a 2001 Blanket Purchase Agreement with the National Institutes of Health (NIH), and a 2005 contract with the U.S. Department of Veterans Affairs (VA). All these contracts contained provisions for Most Favored Customer Pricing.
The government alleged that VWR violated the False Claims Act by failing to provide federal purchasers with the same favorable terms as their most favored customers. This included failing to offer the same rebates, discounts, and incentives, and not adjusting prices accordingly.
“Contractors are expected to understand and carefully comply with the requirements of federal contracts,” said U.S. Attorney Romero. “This settlement under the False Claims Act demonstrates that the federal government will hold accountable contractors that overcharge agencies by failing to follow the pricing terms of federal contracts.”
“GSA’s Office of the Inspector General will continue to investigate any allegations of GSA contractors overcharging federal agencies at the expense of American taxpayers,” said GSA Acting Inspector General Robert Erickson.
The False Claims Act Settlement also resolves a lawsuit brought by Adrian G. Scioli, a former VWR employee, under the whistleblower provisions of the False Claims Act. Scioli will receive approximately $1,100,000 of the settlement. The lawsuit is captioned United States et al., ex rel. Scioli v. VWR International, LLC, et al., No. 17-cv-2574 (E.D. Pa.).
The resolution of the False Claims Act allegations was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the GSA Office of Inspector General, the U.S. Department of Health and Human Services Office of Inspector General, the U.S. Department of Veterans Affairs Office of Inspector General, and the Defense Criminal Investigative Service.
Assistant United States Attorneys Lauren DeBruicker and Mark J. Sherer, along with Auditor Dawn Wiggins, handled the False Claims Act matter for the U.S. Attorney’s Office.
Additionally, Avantor has agreed to pay $325,000 to resolve allegations that it and its subsidiaries failed to comply with several compliance obligations related to listed chemicals, which are regulated by the Drug Enforcement Administration (DEA), between 2013 and 2023. The company also entered into an administrative agreement with the DEA that imposes heightened accountability obligations.
Listed chemicals are substances that can be used in manufacturing controlled substances. These chemicals are divided into two groups: List I and List II chemicals. Avantor, as a chemical importer, manufacturer, distributor, and exporter, is required to submit reports to the DEA for each transaction involving these chemicals.
The DEA conducted inspections of Avantor’s facilities in Paris, Kentucky; Manati, Puerto Rico; and Bridgeport, New Jersey. The DEA alleged that Avantor committed several violations of its listed chemical obligations, such as failing to document correct registration numbers and shipping chemicals without required submissions to the DEA.
“Companies that deal in listed chemicals are held to high standards since the chemicals can be used to manufacture illicit controlled substances,” said U.S. Attorney Romero. “It is critical that companies live up to the compliance obligations imposed by federal law and regulation to ensure accountability and proper monitoring.”
“Listed chemicals can be used as precursors to illicitly manufacture dangerous synthetic drugs, such as fentanyl and methamphetamine,” said Thomas Hodnett, Special Agent in Charge of the DEA’s Philadelphia Field Division. “It is essential to public safety that companies handling listed chemicals adhere closely to DEA regulations.”
The DEA matter was handled by Assistant United States Attorney Anthony D. Scicchitano, with assistance from Frank O’Connor, Jeffrey Braun, and Andrew Schobert.
The claims resolved by these settlements are allegations only, with no determination of liability.
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