Pharma Giant to Pay $54M to Settle Whistleblower Complaint

Teva Pharmaceuticals earlier this month agreed to pay $54 million to settle a whistleblower lawsuit brought against it by two former sales representatives. Charles Arnstein and Hossam Senousy filed suit against the Israeli-based pharmaceutical company alleging it paid speaker fees to neurologists for participation in “sham” speaker programs in exchange for their prescribing the multiple sclerosis drug Copaxone and the Parkinson’s disease drug Azilect.

The lawsuit, which alleged violations of the False Claims Act and the Anti-Kickback Statute, was first filed in May 2013. As with all whistleblower cases, the government can choose to intervene or not. In this case it did, not so the relators Arnstein and Senousy pursued it on their own.

According to the complaint, the neurologists who attended the speaker programs wrote prescriptions for the two drugs. They were filled by pharmacies, which in turn submitted claims for reimbursement to various government-funded healthcare programs. The pharmacies’ claims resulted in payments by the government for prescriptions that were allegedly induced through fraud. The relators alleged that the submission of these false claims were violations of the False Claims Act.

In addition, the complaint alleged that by offering or paying physicians remuneration in exchange for their prescribing a drug covered by a federal healthcare program, Teva was in violation of the Anti-Kickback Statute.

Teva attempted to have the case dismissed through summary judgement. However, in February 2019, a U.S. federal judge denied Teva’s motion, rejecting the company’s argument that the relators were required to produce evidence of a quid pro quo arrangement. The judge also rejected Teva’s argument that it had written compliance policies in place, noting that simply having them in place did not shield the company from liability.

Many of these speaker programs are high risk for fraud. Healthcare providers who speak at them not only can be paid a lot of money, but also often are provided with free travel, lodging, and meals. These types of perks sometimes result in having providers prescribe a pharmaceutical company’s drugs, even when not medically necessary.  

In Teva’s case, the relators provided evidence that the pharmaceutical company targeted high-volume prescribers regardless of whether they were qualified to serve as speakers. The judge, in refusing to dismiss the case, held that a reasonable jury could conclude that Teva’s speaker program was intended to influence prescriber behavior in violation of the False Claims Act as well as the Anti-Kickback Statute.

Last year, ProPublica reported that in the past five years more than 2,500 physicians have received at least half a million dollars each from drug makers and medical device companies and that more than 700 of them received at least $1 million.

While such relationships are not always illegal, they can lead to improper or illegal activity.

Physicians would be well advised to ensure that the drugs he or she chooses to prescribe are selected based on medical necessity and in the best interest of the patient. The Health Law Offices of Anthony C. Vitale can help you review your business relationships and their application to the Anti-Kickback Statute.

If you have any questions contact us at 305-358-4500 or email us at info@vitalehealthlaw.com.

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