Qui Tam Whistleblowers Bring End to Pharmaceutical Scheme Targeting Elderly Long-Term Care Patients
Three whistleblowers who filed qui tam lawsuits against Avanir Pharmaceuticals (Avanir) will split a whistleblower reward of over $23 million. The whistleblowers alleged the company paid kickbacks and engaged in false and misleading marketing of the drug Nuedexta. The lawsuit brought under the False Claims Act, alleged Avanir induced providers in long term care facilities to prescribe Nuedexta for behaviors commonly associated with elderly dementia patients. This use is not the approved use of the drug.
The Department of Justice (DOJ) recently announced a settlement of these allegations. Avanir agreed to pay over $108 million in criminal penalties and civil damages to resolve violations of Medicaid fraud.
Avanir is alleged to have instructed its employees to provide misleading information to long term care medical providers about Nuedexta. The FCA suit alleged the company paid doctors working with elderly dementia patients to prescribe Nuedexta. Nuedexta is approved to treat patients who suffer from Pseudobulbar affect (PBA), a neurological condition that causes sudden outbursts of crying or laughing. Dementia patients can exhibit symptoms similar to those who suffer from PBA.
According to the DOJ’s press release, the government alleged one doctor, who was a paid spokesperson for Avanir, once reported he had “entire units” of patients on Nuedexta. These included many who had dementia. After other doctors in the unit would discontinue the Nuedexta regimen for these patients, the Avanir doctor would “reinitiate” the treatment.
False Claims Act Lawsuit Results in $108 Million Settlement
The terms of the settlement include Avanir paying $95 million to resolve the False Claims Act charges as well as $13 million for penalties and forfeitures.
Two of the Medicaid fraud whistleblowers will receive awards of $5,365,000, and one will receive $12,389,823.
Significant cases of fraud need insider information that only a whistleblower can provide. Without whistleblowers, corruption would fester, and malpractice would go unnoticed, resulting in the waste of taxpayer’s money and resources.
The whistleblower or qui tam provisions of the False Claims Act allow for persons who report fraud, called relators, to share in any recoveries made by the government. In False Claims Act cases, the government can choose to intervene, as it did in this case. If they decide not to, the private plaintiff has the right to proceed on their own.