By Blake Ellis and Melanie Hicken
(CNN)A
pharmaceutical company that whistleblowers alleged paid doctors to
prescribe its main drug and urged salespeople to push it as a way to
control unruly dementia patients will pay more than $100 million to
settle government fraud allegations.
The
Department of Justice announced the settlement with Avanir
Pharmaceuticals on Thursday, four years after these whistleblowers
alerted the federal government that they believed the company was paying
kickbacks to doctors and illegally marketing its main drug, Nuedexta --
particularly in nursing homes. Each of these three whistleblowers will
receive a portion of the millions Avanir has agreed to pay.
The allegations resulting in Thursday's
$116 million settlement -- which includes both civil damages and
criminal penalties to federal and state governments -- mirrored those
exposed by a 2017 CNN investigation
into inappropriate and potentially fraudulent use of Nuedexta in
nursing homes. Avanir said the company is "deeply committed to
regulatory and legal compliance, integrity and ethical behavior" and
that it had cooperated with the government investigation and "engaged in
extensive remedial measures," which the government said included
terminating or otherwise removing multiple employees.
The DOJ also said Avanir admits it paid a doctor "to induce him to not only maintain, but increase his prescription volume."
Nuedexta,
which hit the market in 2011, is only approved by the federal
government for a rare condition characterized by uncontrollable laughing
and crying, known as pseudobulbar affect, or PBA.
Yet whistleblowers alleged in lawsuits
that from the drug's early years, the company illegally directed
salespeople to market Nuedexta in nursing homes as an alternative to
antipsychotic drugs specifically for "use in controlling the behavior of
patients prone to disruptive outbursts." This came as the government
attempted to crack down on the use of antipsychotics in restraining
elderly dementia patients.
They
also claimed that salespeople coached doctors on how to fill out
prescriptions to ensure approval, forged physician signatures on
paperwork for insurers and asked nursing home employees for names of
patients to create lists of people physicians should target with
Nuedexta.
"At least one Avanir
(salesperson) went so far as to dress in scrubs, review patients' files
at the nurses' station in nursing homes, and write the diagnosis for PBA
in the medical files of patients," one lawsuit stated, adding that
these tactics were allegedly praised by an executive on a national sales
call.
Federal
laws restrict the tactics pharmaceutical sales representatives can use
to sell a medication. They can't give favors or payments in exchange for
a doctor prescribing the drug. They can't have any contact with private
patient records without the patient's consent. And they can't promote
use of a drug off-label, in a way that hasn't been approved by the FDA.
Pharmaceutical
companies are allowed to pay a doctor to promote a drug to colleagues
and other medical professionals. It is illegal, however, for doctors to
prescribe the drug in exchange for kickback payments from a
manufacturer.
But the DOJ found
that in order to boost prescriptions -- and in turn their own paychecks
-- Avanir salespeople incentivized physicians by paying them for
speaking events and meals. In one case, a salesperson allegedly offered
to pay for a physician's firearms training. And in another, a doctor's
staff Christmas parties were allegedly paid for by Avanir, according to
one of the whistleblower suits.
Thursday's
announcement resolved a government investigation involving the two
separate whistleblower lawsuits. These complaints were originally filed
under seal in 2015, and they were kept secret until the DOJ chose to
publicly intervene in the cases with this settlement. Separately, the
Los Angeles City Attorney's Office opened its own probe
into the sale and marketing of Nuedexta in the wake of CNN's
investigation in 2017. The office would not comment on whether this
inquiry is ongoing.
"It is
particularly concerning when a pharmaceutical company uses kickbacks to
drive up sales in connection with a vulnerable population, such as
elderly patients in nursing care facilities," US Assistant Attorney Jody
Hunt said in the DOJ statement.
Medicare's
Part D prescription drug program spent roughly $225 million on Nuedexta
in 2017 -- up more than 700% from five years earlier, according to
government data.
Much of this sales
growth was fueled by doctors who received kickbacks, according to the
whistleblowers. They noted how some of the doctors who were paid to
promote the drug went on to prescribe Nuedexta to disproportionate
numbers of patients in the same nursing homes -- pointing to one example
where a doctor allegedly put at least 30% of a facility's patients on
Nuedexta. And the DOJ said an Avanir employee reported that a physician
had placed "entire units" of patients on the medication.
"Avanir
instructed sales representatives to provide false and misleading
information that PBA patients could be exhibiting a wide variety of
'behaviors' such as crying without tears, moaning, or making other
inarticulate sounds, when, in fact, those symptoms are commonly observed
in patients who have dementia but do not have a diagnosis of PBA," the
DOJ's press release stated. "This strategy worked, and Nuedexta
utilization in (long-term care) facilities increased."
One of
the whistleblowers involved in Thursday's settlement, a former sales
director, said he was fired months after starting with the company,
after he spoke out against practices including improper payments to a
select group of high-prescribing doctors "who were willing to recommend
Nuedexta to patients who likely didn't need the drug," according to a
press release from The Employment Law Group, which represents him.
"Soon
after he complained to an Avanir vice president about the company's use
of 'speaker fees' to reward doctors for writing unnecessary
prescriptions for Nuedexta, (he) was fired," the release states. While
the government settlement resolves fraud claims against the company, the
former employee is still suing Avanir for unlawful retaliation.
His
suit also highlighted payments to an Ohio doctor, Deepak Raheja. CNN
previously reported that Raheja had received nearly $300,000 from Avanir
during a four-year-period, and was under investigation by the federal
government for fraudulently diagnosing patients with PBA in order to
secure Medicare coverage.
The DOJ
also announced on Thursday that Raheja had been indicted -- saying he
was one of multiple doctors who allegedly prescribed Nuedexta in
exchange for payments from the company. The top prescriber of Nuedexta
in a nearly five-year period, Raheja allegedly falsified symptoms in
patient records to support his phony diagnoses, the DOJ stated. Earlier
this month, a letter from the Ohio Medical Board stated that Raheja had
inappropriately diagnosed nearly a dozen patients with PBA and then
prescribed them Nuedexta "without sufficient justification."
As
a result, the board is determining whether Raheja's license should be
revoked, suspended or otherwise limited. Raheja's attorney declined to
comment.
"Doctors should prescribe
medicine based on what is best for their patients, not on which drug
company is paying for their travel and meals," US Attorney for the
Northern District of Ohio Justin Herdman said in Thursday's statement.
Full Article & Source:
Cashing in on dementia patients: drugmaker to pay $116 million in fraud settlement
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