California-based Avanir has resolved and settled multiple civil, criminal and administrative lawsuits in the US alleging corrupt sales and marketing practices of its drug Nuedexta (dextromethorphan HBr and quinidine sulfate).
According to Avanir, related agreements with the federal government and state authorities will lead to the payment of approximately $116m to the relevant parties.
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The US Department of Justice (DOJ) announced the company has been charged with paying kickbacks to a physician in order to it induce them to prescribe Nuedexta to federal healthcare programmes.
Information filed at the US District Court for the Northern District of Ohio also accused the company of offering the same doctor financial incentives to write additional prescriptions and encouraging them to recommend that other doctors prescribe the drug to beneficiaries of federal healthcare programmes.
These charges are being resolved in a deferred prosecution agreement, in which Avanir admitted to paying kickbacks to the doctor in question and will pay $7.8m in a penalty and $5.1m in forfeiture.
The Northern District of Georgia agreed to enter into this agreement with Avanir because of the company’s ongoing cooperation with the investigation – including extensive remedial measures against individuals involved.
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By GlobalDataThe DOJ also announced that Avanir has cooperated with the Northern District of Ohio’s indictments of four individuals who paid or received kickbacks from the company – two doctors: Deepak Raheja and Bhupinder Sawhny, as well as two former Avanir salesmen: Frank Mazzucco and Gregory Hayslette, according to Reuters.
As part of the $116m total, Avanir will pay $96m to resolve False Claims Act allegations about both kickbacks for prescriptions of the drug and false and misleading marketing of the drug to providers in long-term care facilities (LTCs).
Nuedexta is only approved by the US Food and Drug Administration for the treatment of pseudobulbar affect (PBA), which often follows neurologic disease or brain injury.
However, according to the DOJ, Avanir is accused of “instructing its sales force to initiate discussions in LTCs regarding anti-psychotic use and how Nuedexta could be used to reduce a LTC facility’s reliance on anti-psychotics even though Avanir’s own studies demonstrated that the actual population of patients with PBA is limited”. Its sales force were also alleged to have provided false and misleading information about the connection between dementia and PBA.
DoJ civil division assistant attorney Jody Hunt said: “Kickbacks have the power to corrupt a provider’s medical judgment.
“And it is particularly concerning when a pharmaceutical company uses kickbacks to drive up sales in connection with a vulnerable population, such as elderly patients in nursing care facilities.”
In addition, Avanir has entered into Corporate Integrity Agreement with the US Department of Health and Human Services (HSS) to put in place measures to ensure legal compliance and ensure these corrupt practices cannot be repeated.
HSS Office of Inspector General Special Agent in Charge Derrick L. Jackson said: “Paying kickbacks to medical providers in an effort to increase profits is illegal and diminishes the trust and credibility of drug companies who engage in these activities.
“My agency’s five-year compliance agreement with Avanir has been tailored to ensure such alleged behavior will not be repeated.”
Avanir chief executive officer and president Wa’el Hashad commented: “Avanir is deeply committed to regulatory and legal compliance, integrity and ethical behavior, and the health and safety of patients.
“Strengthening our culture of compliance has been one of my top priorities since I joined Avanir in 2017. We will ensure that our mission, vision, and values are upheld at every level of our company every day.”
