Off-Label and Unapproved Use

September 26, 2019

Pharmaceutical manufacturer Avanir Pharmaceuticals will pay approximately $116 million to resolve civil and criminal charges related to its marketing of Nuedextra for off-label purposes and payment of kickbacks to prescribers and others.  The government alleged that Avanir marketed Nuedextra to long-term care facilities, suggesting that it could be used as an alternative to anti-psychotics for dementia patients, even though Nuedextra had only been approved by the FDA for treatment of particular symptoms secondary to a neurologic disease or brain injury.  In addition, Avanir provided certain physicians and other healthcare professionals with unlawful remuneration in the form of money, honoraria, travel, and food to induce them to write prescriptions for Nuedexta. The civil settlement for $103 million, which includes a five-year corporate integrity agreement, resolves whistleblower actions brought under federal and state False Claims Acts by former Avanir employees Kevin Manieri, Duane Arnold, and Mark Shipman.  Manieri will receive $12.4 million, and Arnold and Shipman will receive $5.4 million. In addition to the civil settlement, Avanir will pay a criminal penalty of $7.8 million, forfeit $5.1 million, and enter into a deferred prosecution agreement admitting to payment of kickbacks and requiring cooperation in ongoing in ongoing criminal investigations of individuals involved in marketing and prescribing Nuedextra.  Indictments against four individuals, including former Avanir employees and one of the top prescribers of Nuedexta in the country, were announced, charging the individuals with conspiracy to solicit, receive, offer and pay health care kickbacks.  DOJ

September 13, 2019

Medical device manufacturer Avalign Technologies, Inc. and its subsidiary Instrumed International, Inc., will pay $9.5 million to resolve allegations that the companies unlawfully marketed devices not properly approved by the FDA for use in spinal surgeries, circumcisions, and other medical procedures, with knowledge that the devices did not have the required FDA approvals.  The allegations were originally made in False Claims Act action brought by a whistleblower.  USAO SDNY

June 5, 2019

Opioid manufacturer Insys Therapeutics will pay $225 million to resolve federal criminal and civil claims against it regarding the unlawful marketing of its drug Subsys, including the payment of kickbacks to providers through sham "speaker programs" that rewarded practitioners who increased their Subsys prescribing, as well as jobs for prescribers' relatives and friends, and lavish meals and entertainment.  $195 million of the settlement will be paid to resolve False Claim Act allegations in five separate whistleblower lawsuits in which the government intervened in 2018; the whistleblower reward shares have not yet been determined.  To resolve the criminal claims, Insys will pay $2 million and forfeit $28 million; its operating subsidiary will plead guilty to wire fraud and related charges.  In addition, Insys entered into a five-year Corporate Integrity Agreement and a five-year deferred prosecution agreement. Previously, five former Insys executives were convicted of racketeering in connection with Subsys marketing.  DOJ; USAO Mass

May 2, 2019

Insys Therapeutics executives were convicted for their part in a racketeering conspiracy where they defrauded Medicare and private insurance carriers. From May 2012 to December 2015, the defendants bribed medical practitioners to prescribe Subsys, an extremely addictive sublingual fentayl spray intended for use by cancer patients. In furtherance of these efforts, the defendants provided kickbacks to practitioners who increased their Subsys prescriptions. The defendants also defrauded health insurance providers who were hesitant to approve payment for the drug when it was prescribed for non-cancer patients. DOJ

April 4, 2019

Pharmaceutical company Lundbeck LLC will pay $52.6 million to resolve allegations that the company violated the False Claims Act by providing funds to a purportedly independent patient assistance program for its drug Xenazine, approved for Huntington's Disease, in a form that created an improper kickback. Lundbeck was the sole donor to a fund at a foundation that claimed to provide financial support for patients with Huntington’s Disease. However, Lundbeck also referred Xenazine patients with many other conditions to this foundation, which then paid the Xenazine copays for these off-label uses.  When the foundation determined to stop using its Huntington's fund for non-Huntington's patient, Lundbeck redirected its payments to a different general-purpose fund, with the understanding that fund would use the redirected funds to pay Xenazine copays for these same patients.  Lundbeck is alleged to have denied needy Medicare and ChampVA Xenazine patients access to its free drug program, instead referring them to the patient assistance program, permitting Lundbeck to submit claims to federal healthcare programs.   DOJ

March 26, 2019

In a consent judgment, Purdue Pharma will pay a total of $270 million to the State of Oklahoma to resolve charges that the company illegally marketed its opioid pain medications by overstating their efficacy and falsely downplaying the risk of addiction.  OK

February 6, 2019

Abbott Labs has agreed to pay a total of $25 million to settle allegations of paying kickbacks to healthcare professionals in exchange for promotion of its drug, and inappropriately marketing its drug, TriCor, for cardiovascular events not approved by the FDA. The case was initiated by the State of North Carolina and joined by California, Illinois, Nevada, Maryland, Michigan, and Texas, as well as the federal government. NC AG