Caremark International was involved in two health care business segments: providing patient care and managing care services.

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Caremark International was involved in two health care business segments: providing patient care and managing care services. Over an extended period of time, Caremark officers and employees acting on behalf of Caremark made illegal kickbacks to doctors and medical care businesses. For example, two of its officers paid Dr. David Brown, a physician practicing in Minneapolis, over $1.1 million to induce him to distribute Protropin, a human growth hormone drug marketed by Caremark. Some payments were in the guise of research grants, and others were part of consulting agreements. Dr. Brown performed virtually none of the research or consulting functions. As a result of this and other kickback arrangements, Caremark agreed to make reimbursements to various private and public parties in the amount of $250 million. On what grounds did the Caremark shareholders attempt to find its directors liable for the amount reimbursed?

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Business Law The Ethical Global and E-Commerce Environment

ISBN: 978-1259917110

17th edition

Authors: Arlen Langvardt, A. James Barnes, Jamie Darin Prenkert, Martin A. McCrory

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