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Pharmaceutical Company Settles FCA Allegations

March 12, 2014

Teva Pharmaceuticals USA Inc. and a subsidiary, IVAX LLC, have agreed to pay the government and the State of Illinois $27.6 million to settle False Claim Act allegations according to a DoJ press release.  The government specifically alleged that Teva and IVAX paid Dr. Michael J. Reinstein of Illinois to prescribe generic clozapine, an anti-psychotic medication, to his patients.  While clozapine has been approved for treatment-resistant forms of schizophrenia, it has serious potential side effects and is considered a drug of last resort, particularly for elderly patients.  For many years, Teva and IVAX allegedly paid Reinstein money, provided “other benefits,” and provided all expenses paid trips to Miami for Reinstein, his wife, and several of his employees in violation of the Anti-Kickback Statute.  The scheme also resulted in the submission of thousands of false claims to Medicare and Illinois Medicaid.

“The Department of Justice is committed to ensuring that pharmaceutical manufacturers who make payments to doctors to influence prescribing decisions are held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Schemes such as the one alleged in this case undermine the health care system and take advantage of elderly patients.”

To report health care fraud, please contact Frohsin & Barger.

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