Teva Pharmaceutical and its Miami Subsidiary to Pay $27.6 Million to Settle False Claims Act Violations By Tod Aronovitz | 04/03/14 | 0 Comment

Teva Pharmaceuticals of North Wales, Pa., and its Miami subsidiary, IVAX LLC, have agreed to a $27.5 million settlement with the federal government and the state of Illinois to resolve False Claims Act allegations, according to the U.S. Department of Justice. The government accused the drug companies of paying an Illinois physician to prescribe an IVAX anti-psychotic medication over other options. Many of the patients who received the drug were Medicare and Medicaid beneficiaries.

The IVAX drug being prescribed was the generic clozapine, a medication approved for treatment-resistant forms of schizophrenia. Because of its serious and some potentially deadly side effects, clozapine is generally used when all other options fail, especially in the case of elderly patients.

The government alleged that IVAX set up a payment scheme in August 2003 with Dr. Michael J. Reinstein. Reinstein agreed to switch his patients to clozapine in return for a one-year $50,000 “consulting agreement,” in addition to other perks such as all-expense paid trips to Miami for Reinstein, his wife and his other employees, in violation of the federal Medicare and Medicaid Anti-Kickback Statute.

As a result of the scheme, Reinstein became the largest prescriber of generic clozapine in the country, prescribing the medication to numerous elderly patients who were Medicare beneficiaries. Overall, the alleged payments and other benefits from IVAX, and later Teva Pharmaceuticals, resulted in the submission of thousands of false claims to the Medicare Part D and Illinois Medicaid programs for years, the Justice Department found.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to generate referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The law aims to ensure that medical judgments are based on the best interests of the patient and not influenced by inappropriate financial incentives.

The United States filed a civil action against Reinstein on November 15, 2012, charging that he violated the False Claims Act relating to his payment scheme with Teva and IVAX. The civil action, United States v. Reinstein, is pending in the Northern District of Illinois.

“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 vulnerable patients.”

How to Report Miami Medicare Fraud

Healthcare or medical billing employees who have inside knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” or False Claims Act lawsuit, a private party may collect between 10 to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with Miami whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss a False Claims Act case.