Drug Company Sued Over Kickbacks for Off-Label Marketing of Psychotropic Drug for Nursing Home Residents to Pay Over $115 Million

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Background

When the Centers for Medicare & Medicaid Services (CMS) launched a national campaign to reduce the off-label prescribing of antipsychotic drugs for nursing home residents in 2012, Avanir Pharmaceuticals directed its sales force to talk to nursing facilities about using Nuedexta as a substitute for antipsychotic drugs. The Food and Drug Administration had approved Nuedexta for treatment of pseudobulbar affect (PBA), “which is characterized by involuntary, sudden, and frequent episodes of laughing or crying, and occurs secondary to a neurologic disease or brain injury.”[1] Nuedexta is not approved for dementia. While physicians may prescribe medications for nonapproved uses, pharmaceutical companies may not market or promote drugs for off-label uses.

A CNN investigation in 2017 reported that between 2012 and 2016, sales of Nuedexta for nursing home residents increased more than 400%. In 2011, Medicare spent $3.9 million on Nuedexta for nursing home residents; in 2015, it spent $138 million. In 2012, residents took 2.83 million Nuedexta pills; in 2016, 13.95 million pills. CNN reported that Avanir was making hundreds of millions of dollars a year by selling Nuedexta for nursing home residents.[2]

On September 26, 2019, the U.S. Department of Justice and the U.S. Attorneys Offices for the Northern District of Georgia and the Northern District of Ohio simultaneously announced four lawsuits, two criminal and two civil, challenging Avanir’s off-label marketing and promotional activities to encourage the prescribing of Nuedexta for nursing home residents. Three of the cases were settled, with Avanir agreeing to pay a total of $115,874,895. Four people await criminal trial in Ohio.

Criminal Cases

A one-count criminal indictment in the Northern District of Georgia alleges that “Avanir violated the Anti-Kickback Statute by paying a doctor to induce him [through financial incentives] to become a high prescriber of Nuedexta.”[3] Under a deferred prosecution agreement, Avanir admits that it paid the physician to increase his prescribing of Nuedexta. Avanir will pay a monetary penalty of $7,800,000 and a forfeiture of $4,074,895. Prosecution is deferred because of Avanir’s “substantial and ongoing cooperation with the investigation”[4] and because a criminal conviction would lead to the company’s mandatory exclusion from all federal health care programs for at least five years,[5] harming consumers who legitimately need Avanir’s drugs.

An 83-count criminal indictment in the Northern District of Ohio charges two physicians and two Avanir salesmen with engaging in “a kickback conspiracy in which the doctors allegedly received money and other things of value in exchange for writing prescriptions for Nuedexta for patients that did not have [PBA].”[6] One of the physicians, a psychiatrist in Cleveland, wrote more prescriptions for Nuedexta than any other physician in the country – 10,888 prescriptions between October 2011 and April 2016 – and received $1500 for approximately each of 211 speaking presentations where he promoted Nuedexta to other health care professionals. The U.S. Attorney’s Office asks people who believe they have been victims to contact the FBI at 216-622-6963.

Civil cases

Avanir settled two False Claims Act (FCA) cases with the United States, which alleged that between October 29, 2010 and December 31, 2016, Avanir violated the FCA by giving “money, honoraria, travel, and food to physicians and other health care professionals to induce them to write prescriptions for Nuedexta.”[7] Former employees of Avanir filed the whistleblower lawsuits under the FCA in the Northern District of Georgia and the Northern District of Ohio. The company has agreed to pay the United States $95,972,017 to settle the False Claims Act cases and $7,027,983 to states to resolve state Medicaid claims.

Conclusion

The four lawsuits make clear that the misuse of psychotropic drugs on nursing home residents remains a serious problem. CMS’s focus on antipsychotic drugs since 2012 has led to the increased use of other psychotropic drugs,[8] such as the inappropriate marketing and prescribing of Nuedexta, as well as false diagnoses that appear to make antipsychotic drugs appropriate.[9]

October 17, 2019 – T. Edelman

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[1] U.S. Attorney, Northern District of Georgia, “Pharmaceutical Company Targeting Elderly Victims Admits to Paying Kickbacks, Resolves Related False Claims Act Violations” (News Release, Sep. 26, 2019), https://www.justice.gov/usao-ndga/pr/pharmaceutical-company-targeting-elderly-victims-admits-paying-kickbacks-resolves.
[2] Blake Ellis and Melanie Hicken, “The little red pill being pushed on the elderly; CNN investigation exposes inappropriate use of drug in nursing homes,” CNN (Oct. 12, 2017), https://www.cnn.com/2017/10/12/health/nuedexta-nursing-homes-invs/index.html.
[3] U.S. Attorney, Northern District of Georgia, “Pharmaceutical Company Targeting Elderly Victims Admits to Paying Kickbacks, Resolves Related False Claims Act Violations” (News Release, Sep. 26, 2019).
[4] Id. Avanir’s cooperation included “capturing and producing text messages from employee cell phones, the extensive remedial measures taken by the company, including terminating, or permitting to resign in lieu of termination, multiple employees, at various levels of the organization, including senior executives, and its enhanced compliance program.”  The company also agreed “to resolve all civil claims relating to federal health care programs arising from its conduct.”
[5] The HHS Inspector General would impose mandatory exclusion pursuant to 42 U.S.C. §1320a-7.
[6] U.S. Attorney, Northern District of Ohio, “Physicians and pharmacy sales reps indicted for kickback conspiracy in which doctors allegedly received money in exchange for writing unnecessary prescriptions of Nuedexta” (News Release, Sep. 26, 2019), https://www.justice.gov/usao-ndoh/pr/physicians-and-pharmacy-sales-reps-indicted-kickback-conspiracy-which-doctors-allegedly.
[7] U.S. Department of Justice, “Pharmaceutical Company Targeting Elderly Victims Admits to Paying Kickbacks, Resolves Related False Claims Act Violations” (Press Release, Sep. 26, 2019), https://www.justice.gov/opa/pr/pharmaceutical-company-targeting-elderly-victims-admits-paying-kickbacks-resolves-related.
[8] Donovan T. Maust, H. Myra Kim, Claire Chiang, Helen C. Kales, “Association of the Centers for Medicare & Medicaid Services’ National Partnership to Improve Dementia Care With the Use of Antipsychotics and Other Psychotropics in Long-term Care in the United States From 2009 to 2014,” JAMA Internal Medicine (published on-line Mar. 17, 2018), https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2674245?resultClick=1 (click on open).
[9] Jonathan D. Winter, J. William Kerns, Katherine M. Winter & Roy T. Sabo, “Increased Reporting of Exclusionary Diagnoses Inflate Apparent Reductions in Long-Stay Antipsychotic Prescribing,” Clinical Gerontologist, Vol. 42, Issue 3 (Dec. 2017), https://www.tandfonline.com/doi/full/10.1080/07317115.2017.1395378 (abstract).

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