PharmaLogic: The Small-Entity Certifications That Cut NRC Fees

In the PharmaLogic NRC small entity settlement, PharmaLogic Holdings Corporation agreed to pay $350,000 to resolve allegations that nine acquired entities claimed reduced annual licensing fees despite exceeding the size limits. The alleged savings came from what those businesses told the government about their size. A discount intended for small entities went to businesses the government said were too large to qualify. The government collected less than it was owed.

The Florida-headquartered radiopharmaceutical company reached a pharmaceutical False Claims Act settlement over money owed to the Nuclear Regulatory Commission. That agency regulates the civilian use of radioactive materials, including their licensed handling, storage and possession. The government alleged that PharmaLogic’s subsidiaries knowingly sought small-entity treatment they did not qualify for. In the government’s account, the agency accepted the certifications and reduced their fees.

How the NRC Fee Certification Worked

The Nuclear Regulatory Commission charges annual fees to licensed entities that handle, store or possess radioactive materials. As the Justice Department’s account of the fee system explains, a qualifying small entity can obtain a reduced annual fee by filing NRC Form 526.

The certification concerns the size of the licensed business. It connects information about the company to an expense of operating under a radioactive-materials license. For someone working in licensing or finance, that puts the relevant business knowledge close to an annual bill, rather than in the records of a patient’s treatment.

The agency’s acceptance of the forms is part of the allegation. The government said the entities obtained both small-entity status and the reduced fees despite exceeding the limits. That is why the company’s description of itself, rather than the product it sold, sits at the center of this case.

Acquired Businesses Claiming Small-Entity Status

The government placed the filings between approximately March 31, 2015 and December 31, 2023. Its announcement describes the entities as businesses acquired by PharmaLogic and says each certified small-entity status through the forms it filed.

Did the business described on the form match the business paying the bill? The acquisition context makes that question concrete for someone who knew the businesses involved. The filings described entities as small enough for reduced fees, while the government alleged they exceeded the qualifying size limits.

We would examine the business information behind each filing and how the entity fit into the company that acquired it. Someone who worked on an acquisition may know the business behind the subsidiary’s name, while someone responsible for licensing may know the representation that reached the Nuclear Regulatory Commission. Connecting that knowledge to the certification is work we do with you.

Are Pharmaceutical Companies Liable for False Claims?

Yes. PharmaLogic’s settlement concerns allegations that a pharmaceutical business reduced money it owed the government through false certifications. A company’s government fee obligations can support a False Claims Act case.

The Georgetown Environmental Law Review’s 2023 paper False Claims, Real Climate Harm: How Whistleblowers Can Fight Fraud in the Renewable-Energy, REC, and Carbon-Offset Markets explains that the law reaches knowing, improper reductions of obligations to pay the government and false records used to achieve them. The money can run in either direction: a false claim for a government payment, or a false statement used to reduce what a company owes. PharmaLogic’s alleged fee reductions illustrate the latter.

Lehigh Valley Technologies also settled allegations that its regulatory filings reduced what it owed the government. In a settlement announced in February 2019, it agreed to pay $4 million over allegations that it structured new drug applications to avoid Food and Drug Administration fees. The government alleged that those fees would have exceeded $2 million had the applications been submitted in the company’s own name.

The parallel is the use of a filing to change the regulator’s bill. Lehigh Valley’s alleged scheme concerned the way drug applications were submitted; PharmaLogic’s concerned certifications about the size of acquired businesses. Both put information about the business itself at the point where the government determined what to collect.

An insider familiar with those filings may understand a government money trail that never passes through a patient’s prescription claim. A licensing or finance employee can recognize the transaction from the company’s side: the representation made, the fee charged and the reason the company claimed a reduction.

As with drug price reporting, where manufacturers supply figures that determine government payments and rebates, the government relied on information from the company.

The PharmaLogic Settlement and the NRC Investigation

The U.S. Attorney’s Office for the District of Maryland and the Nuclear Regulatory Commission’s Inspector General announced the PharmaLogic settlement on January 13, 2025. It resolved the allegations about reduced annual fees obtained through the small-entity certifications.

The announcement also identifies a part of the agency that finance employees will recognize. The Inspector General credited cooperation from staff in the Labor Administration & Fee Billing Branch of the Office of the Chief Financial Officer. That detail puts the people administering the fees beside the investigators examining the certifications.

What a Whistleblower’s Records Can Show

The useful records connect the size representation, the business behind it and the fee reduction. For a pharmaceutical whistleblower with a similar concern, we would compare the certification with the underlying company information and the annual fee records. We would also examine what the people responsible for the filing knew when the representation reached the agency.

A licensing employee may understand the submission. A finance employee may understand the figures used to support it and the payment that followed. Which connection you can explain is where our work with you begins.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know the Business Behind the Certification

If you know why an NRC small-entity certification did not match the business behind it, speak with our whistleblower experts about the fees the company avoided. We develop the case with you and bring in pharmaceutical whistleblower lawyers who understand government fee obligations. We stay beside you as we turn your knowledge of the business into your strongest whistleblower case.