Avanir Pharmaceuticals has been in the news lately for its payment of kickbacks to physicians for its drug Nuedexta. On September 26, 2019, the Department of Justice announced a settlement with the company for $108 million in criminal penalties, forfeiture, and civil damages, for paying kickbacks to physicians and engaging in false marketing, promotion, and billing of Nuedexta. That same date, two doctors and two pharmaceutical representatives from Northeast Ohio were indicted on federal charges for their roles in a kickback conspiracy.
Deferred Prosecution Agreement Entered into In Georgia
A one-count Information filed in the United States District Court for the Northern District of Georgia outlines an allegation that Avanir violated the Anti-Kickback Statute by paying a physician to induce him into becoming a higher prescriber of its drug Nuedexta, a drug approved by the United States Food and Drug Administration (FDA) to treat pseudobulbar affect (PBA), a condition characterized by involuntary, sudden, and frequent episodes of uncontrollable laughter and crying.
According to the DOJ press release announcing the suit, the Information alleges that Avanir offered the physician financial incentives to write additional Nuedexta prescriptions for beneficiaries of federal healthcare programs and induced him to recommend that other physicians do the same.
The Northern District of Georgia also announced a three-year deferred prosecution agreement (DPA) resolving the charge, under which Avanir admits that it paid the doctor to induce him to not only maintain, but also to increase his prescription volume. Under the terms of the DPA, Avanir will pay a penalty in the amount of $7,800,000, and a forfeiture in the amount of $5,074,895.
As a part of the resolution, Avanir also entered into a Corporate Integrity Agreement (CIA) with the United States Department of Health and Human Services Office of Inspector General (HHS-OIG) for a period of five years.
The DPA was entered into based on the specific facts of this case, including the company’s substantial and ongoing cooperation with the investigation to date.
Civil Resolution
The government alleged that between October 29, 2010, and December 31, 2016, Avanir provided remuneration to certain physicians and other health care professionals to encourage them to write prescriptions for Nuedexta, including Avanir’s paying certain health care professionals to participate in speaker’s programs about Nuedexta based on their willingness to prescribe Nuedexta.
The government further alleged that Avanir implemented a strategy to market Nuedexta in long-term care (LTC) facilities for uses other than PBA that had not been approved by the FDA and were not medically accepted indications as defined by the statutes and regulations governing the Federal health care programs.
Avanir has agreed to pay $95,972,017 to the United States to resolve allegations under the False Claims Act related to its marketing of Nuedexta.
Four Indicted for Involvement in Ohio Avanir Kickback Lawsuit
As noted above, on the same date as the announcement of the above Information and DPA, two doctors from Northeast Ohio and two pharmaceutical representatives were indicted on federal charges for their roles in a kickback conspiracy related to Nuedexta. The four individuals were: Deepak Raheja, a medical doctor who specialized in psychiatry and neurology; Bhupinder Sawhny, a doctor who specialized in neurosurgery; Gregory Hayslette, a pharmaceutical sales representative who worked for Avanir Pharmaceuticals, Inc. from June 205 through September 2016; and Frank Mazzucco, the regional business manager and supervisor of Hayslette.
According to the DOJ, as the manufacturer of Nuedexta, Avanir promoted the drug through a speaker’s bureau, through with sales representatives worked with doctors to get them to speak about, and promote, the drug with other medical professionals. These speaking events typically involved a dinner at a pricey restaurant – the doctor would make a presentation using a slide deck created by the manufacturer, and the guest list was created by a company sales representative.
According to the DOJ press release announcing the indictment, Raheja joined Avanir’s speaker’s bureau in February 2011 and gave over 200 presentations at various restaurants and doctor’s offices between October 2011 and April 2016. He allegedly received $1,500 for each of the presentations, for a total of $331,500. During that same time period, Raheja wrote the highest number of Nuedexta prescriptions in the country – roughly 10,088. Raheja was an individual defendant in a lawsuit filed by whistleblower Kevin Manieri in March 2015.
Raheja and Sawhny allegedly wrote Nuedexta prescriptions for patients that did not have PBA in addition to submitting materially false and fictitious prior authorizations to Medicaid MCOs that showed PBA diagnoses for patients that did not actually have PBA. Sawhny also allegedly allowed unauthorized access to PHI.
Hayslette and Mazzucco allegedly arranged the programs for doctors in addition to paying honoraria and other expenses to Raheja and other physicians.
Hayslette also allegedly submitted false and fictitious sign-in sheets from speaking engagements to justify the event and maximize payments made to Raheja and Sawhny, facilitated the promotion of non-FDA-approved uses and dosages of Nuedexta through the speakers bureau program and literature to physicians, offered things of value to Sawhny and Reheja, including food and beverage to the entire offices with little to no substantive discussion about the drug, accessed patient PHI without authorization, and helped to submit false diagnoses of PBA on prior authorizations to Medicaid Managed Care Organizations.
Policy & Medicine Compliance Update
Keep an eye on next month’s issue of our sister publication, Policy & Medicine Compliance Update, for a more in-depth review of the troubles Avanir is facing and what it means for compliance professionals.