Earlier this year, Teva agreed to pay $54 million to settle an Anti-Kickback Statute (AKS) and False Claims Act (FCA) claim that it used speaker programs to pay physician speakers to induce prescriptions for two of its drugs, Copaxone and Azilect.
Background
Charles Arnstein and Hossam Senousy, former sales representatives of Teva Neuroscience, filed the whistleblower lawsuit in May 2013. According to allegations made by Arnstein and Senousy, Teva paid physicians speaking fees ranging from $1,500 to $2,700 for their participation in speaker programs. At each of the speaker programs, the physicians would give similar speeches to the same audience members in connection with the multiple sclerosis drug Copaxone and Parkinson’s drug Azilect.
Physician participants in the speaker programs would then write prescriptions for the drugs, which were filled at pharmacies around the United States. Once the prescriptions were filled and dispensed to patients, the pharmacies submitted claims for reimbursement to government-funded healthcare programs. Since Teva’s actions allegedly caused the submission of false claims to the government via the dispensing pharmacies, those actions were alleged to constitute violations of the FCA and AKS.
In February 2014, via a regulatory filing, Teva disclosed that it received a subpoena from the United States Attorney for the Southern District of New York. The subpoena requested information related to the sales, marketing, and promotion of Copaxone and Azilect.
In November 2014, the government notified the court that it would not intervene in the qui tam suit.
In March 2015, the court unsealed the complaint and allowed Arnstein and Senousy to prosecute the claims on behalf of the United States and various individual states.
Teva attempted to move for summary judgement and have the suit dismissed. However, on February 27, 2019, the Honorable Colleen McMahon, chief judge for the United States District Court for the Southern District of New York, denied the motion for summary judgment. Judge McMahon indicated that even though Teva’s compliance materials contained “all of the right language,” it does not mean that the company followed its own guidelines.
Judge McMahon’s Order highlighted the misconduct by Teva, noting that the whistleblowers “introduced substantial evidence that Teva did, in fact, track speakers’ prescription writing,” and that “[s]ales representatives linked prescriber habits with their retention as paid speakers for Teva.” She further noted that “Teva has no real answer to this evidence” and the evidence included “dozens of examples of sales representatives using speaker prescriptions to see whether the programs were producing tangible results and to suggest working more closely with high volume prescribing speakers.”
In that Order, McMahon also cited substantial evidence that showed the same programs were repeatedly shown to the same attendees, including 1500 examples of certain healthcare providers attending three or more events on the same drug within a six month period and healthcare providers reversing roles at sequential Teva programs, attending one as the speaker and as an audience member at another.
This case highlights the fact that the government does not need to intervene in FCA/AKS suits in order for them to have teeth and result in a multi-million dollar settlement.