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From Health Law Daily, March 11, 2014

Teva Pharmaceutical to pay federal and state government $27.6 million to resolve false billing allegations

By Melissa Skinner, JD

Teva Pharmaceuticals USA, Inc., and its subsidiary IVAX, LLC (collectively Teva) agreed to pay a total of $27.6 million to the federal government and the State of Illinois in a settlement regarding allegations of false billing practices. Illinois Attorney General Lisa Madigan announced the settlement, which requires Teva to pay almost $15.5 million to the federal government and over $12.1 million plus interest to the State of Illinois within 10 days. The government claims that Teva paid and provided other remuneration to a physician, Dr. Michael J. Reinstein, to prescribe generic clozapine, an anti-psychotic drug, to thousands of Medicare and Medicaid beneficiaries in nursing homes and hospitals. Reinstein also faces charges in federal court pursuant to the federal False Claims Act (FCA).

Scheme and settlement. Specifically, it was alleged that Teva paid Reinstein in exchange for prescribing Teva’s product, generic clozapine, which is often prescribed to elderly patients as a drug of last resort.  While it has been shown to be effective in patients with treatment-resistant forms of schizophrenia, generic clozapine has also been found to cause numerous serious side effects including decrease in white blood cells, seizures, inflammation of heart muscles, and increased mortality in the elderly. The government claimed that the scheme between Teva and Reinstein led to the submission of over 100,000 false claims to Medicare Part D and to the Illinois Medicaid program. The settlement was the result of an agreement and joint effort of the U.S. Attorney’s Office for the North District of Illinois, the Civil Fraud Section of the Justice Department, the Office of the Inspector General of HHS, the FBI’s Chicago Office, and Ms. Madigan’s Office.

Reinstein. A federal FCA case was filed against Reinstein, a Chicago psychiatrist who began practicing in 1973 and who had a practice in Chicago’s Uptown neighborhood since approximately 1999, in November of 2012. That suit involves allegations that beginning as early as August of 2003, Reinstein had an agreement with Teva to prescribe his existing patients on other medications generic clozapine instead in exchange for $50,000 under a “one year consulting agreement.” The government also alleges that Reinstein violated the Anti-kickback statute by accepting other forms of remuneration for his prescribing methods in respect to Teva’s product in the form of renewal of that agreement, travel, meals, entertainment expenses, and tickets to sporting events. Included in these kickback claims, it is asserted that Teva provided Reinstein, his wife, and some of his employees with an all-expenses paid trip to Miami. Due to these practices, Reinstein became the largest prescriber of generic clozapine in the country. The case against Reinstein is still pending in federal court.

MainStory: TopStory ReimbursementNews DrugNews AntikickbackNews DrugBiologicalNews FraudNews FCANews CMSNews MedicaidNews PartDNews

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