Pfizer to Pay $60M to Settle DOJ and Whistleblower Kickback Charges

Last Friday (January 24), the Department of Justice announced that Pfizer Inc. subsidiary Biohaven Pharmaceutical Holding Company agreed to pay roughly $60 million to settle DOJ and whistleblower charges of violating the False Claims Act and Anti-Kickback Statute by paying kickbacks to induce prescriptions of Biohaven’s migraine medication Nurtec ODT.  The alleged misconduct occurred prior to Pfizer’s acquisition of the company.

The Anti-Kickback Statute bars making or receiving payments in exchange for patient referrals covered by Medicare/Medicaid and other government healthcare programs.  The law broadly applies to virtually anything of value provided to a person in a position to refer patients to certain healthcare providers, products, or services.  It can comprise simple forms of consideration like cash payments, meals, gifts, and entertainment, or more complex financial arrangements such as physician employment agreements, joint venture ownership stakes, cheap office space, or free labor.

According to the government, Biohaven provided healthcare professionals with paid speaking opportunities and expensive meals to induce prescriptions of Nurtec.  The government further alleged the Biohaven speaker programs at issue provided no educational benefit and that certain programs were attended by individuals with no educational need to attend, such as the speakers’ spouses, family members, and friends.  Pfizer terminated the Nurtec speaker programs after it acquired Biohaven.

Going after healthcare kickbacks remains a DOJ enforcement priority as the agency made clear in its recently released 2024 False Claims Act roundup.  And unsurprisingly, as we reported in our collection of this past year’s Top-10 healthcare fraud recoveries, four of the matters on our Top-10 listing involved actions involving improper healthcare kickbacks.

In announcing the Pfizer settlement, the government went out of its way to highlight its zero-tolerance for healthcare kickbacks because of how they undermine medical decision making:

• • • “Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence physician prescribing. The department will use every tool at its disposal to prevent pharmaceutical manufacturers from undermining the objectivity of treatment decisions by health care providers.”  [Acting Civil Division Chief Brett Shumate]

• • • “Patients deserve to know that their doctor is prescribing medications based on their doctor’s medical judgment, and not as a result of financial incentives from pharmaceutical companies. This settlement reflects our commitment to hold those who violate the laws accountable, regardless of their status or prestige.”  [WDNY U.S. Attorney Trini Ross]

• • • “Violations of the anti-kickback statute . . . can unduly influence prescribers and negatively impact taxpayer-funded health care. HHS-OIG will continue to collaborate with law enforcement partners to ensure that providers and corporations are held accountable if they attempt to bypass laws meant to protect the integrity of federal health care programs.”  [HHS-OIG Deputy IG Christian Schrank]

Constantine Cannon whistleblower partner, Gordon Schnell, said: “We receive numerous intakes from whistleblowers wanting to report illicit kickbacks to the government.  They involve a variety of forms — some simple, some extremely complicated — but all designed to financially influence the recipients to induce patient referrals.  The payment schemes are often highly sophisticated financial arrangements the government would unlikely uncover without the help of our clients.”  Unsurprisingly, most False Claims Act actions involving kickbacks are originated by whistleblowers.

The Pfizer case was no exception.  Former Biohaven sales representative Patrica Frattasio reported the conduct to the government in a False Claims Act lawsuit Frattasio filed under the qui tam provisions of the statute which allow private parties to bring lawsuits on behalf of the government against those defrauding the government.  Successful whistleblower are entitled to up to 30% of the government’s recovery.  In this case, Frattasio will receive a whistleblower award of $8.4 million from the federal proceeds of the government’s recovery.

If you think you might have information relating to improper kickbacks or would like to learn more about what it means to be a whistleblower under the False Claims Act, please do not hesitate to contact us.  We will connect you with an experienced member of the Constantine Cannon whistleblower team for a free and confidential consult.

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