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April 4, 2014 Healthcare Fraud

Medicare Fraud Case Takes Aim at Unnecessary Prescriptions of Dangerous Drug Clozapine

In a case involving Teva Pharmaceuticals USA, LLC, the Department of Justice recently settled hundreds of allegations of Medicare and Medicaid fraud relating to the improper recommendation of the generic drug clozapine – considered a drug of last resort for the treatment of schizophrenia. According to allegations, Teva, through its subsidiary IVAX, LLC, unlawfully induced Illinois-based doctor Michael J. Reinstein to over-prescribe this dangerous drug in exchange for a $50,000-year year kickback and several paid trips to Miami, Florida. The government’s claims and allegations were against Teva, IVAX, and Dr. Reinstein individually.

Details of Case Against Teva, IVAX, and Dr. Reinstein

The False Claims Act allegations filed against Dr. Reinstein, IVAX, and its parent company Teva began when authorities began to notice that Dr. Reinstein was prescribing noticeably more doses of clozapine than any other practitioner in the United States. In its original filing, the Department of Justice made several allegations that were uncovered following an investigation into Dr. Reinstein’s practice, which involved several elderly patients with severe mental impairments.

Specifically, IVAX, LLC offered Dr. Reinstein $50,000 as a “consulting fee” each year he agreed to prescribe clozapine to elderly patients undergoing treatment for dementia and other disorders. Prior to the arrangement, Dr. Reinstein was prescribing the drug Clozaril – a brand name manufactured by Novartis. In addition to the yearly stipend, IVAX sent Dr. Reinstein and his family on lavish, all-expenses-paid trips to Miami, Florida, as compensation for his willingness to expose hundreds of unsuspecting patients to the dangers of clozapine unnecessarily.

Clozapine is considered a drug of last resort and is approved for the treatment of schizophrenia and related mental disorders. It carries a severely high risk of deadly side effects, including inflammation of the heart muscle, dangerous drops in infection-fighting white blood cells, and unexpected seizures. When prescribed in elderly patients, the risk of mortality also increases. For these reasons, the drug is only meant to be used when no other alternative methods are available and the patient has been resistant to other possible schizophrenia treatments.

Application of the False Claims Act

When a doctor or pharmacy submits a claim to the government on behalf of a Medicare or Medicaid patient, he is certifying that not only is the claim a valid representation of the patient’s care, but it does not violate any other federal or state laws (including applicable anti-kickback statutes). Additionally, the FCA is designed to promote a positive and honest doctor-patient relationship built on recommendations, referrals, and prescriptions that are actually best for the patient. When a doctor makes a recommendation or issues a prescription in order to receive a monetary gift or asset from another party, this is considered a kickback. Any subsequent invoice to Medicaid or Medicare for reimbursement on behalf of the patient is considered an unlawful and false claim – subject to penalties and fines.

TEVA has agreed to pay $15.5 million to the federal government and $12.1 million to the State of Illinois, while an individual case against Dr. Reinstein is ongoing in federal district court.

Reporting Fraud Can Save Lives

This case represents an extreme example; however, healthcare fraud is a rampant and growing problem in our country today. At the risk of harm to elderly patients, this pharmaceutical company and physician placed money above the safe and effective treatment of patients’ enduring mental illnesses. If you are aware of a similar practice in your place of employment (or elsewhere), a whistleblower lawsuit may be a good option for you to not only put a stop to the misconduct, but also to collect up to 30 percent of the ultimate settlement or verdict amount.

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