Avanir Pharmaceuticals will pay a combined $116 million in civil and criminal penalties for paying kickbacks to a physician to induce prescriptions of its drug Nuedexta, the Department of Justice announced.
According to a complaint filed Sept. 26 in the U.S. District Court for the Northern District of Georgia, Avanir violated the Anti-Kickback Statute by paying a doctor to increase his prescriptions of Nuedexta, a drug used to treat pseudobulbar affect, to beneficiaries of federal healthcare programs. Avanir offered the doctor financial incentives for this and persuaded him to recommend other physicians prescribe Nuedexta to beneficiaries of federal healthcare programs.
Avanir has also entered a deferred prosecution agreement, under which it will pay a monetary penalty in the amount of $7.8 million and a forfeiture of approximately $5.1 million. The United States will defer prosecuting Avanir for three years to allow the company to comply with the agreement’s terms. The agreement will not be final until accepted by the court.
The DPA cited the company’s “substantial and ongoing cooperation” with the investigation to date, “including capturing and producing text messages from employee cell phones; the extensive remedial measures taken by the company, including terminating, or permitting to resign in lieu of termination, multiple employees, at various levels of the organization, including senior executives; and its enhanced compliance program.”
Additionally, Avanir has agreed to resolve all civil claims relating to federal healthcare programs arising from its conduct. A conviction (including a guilty plea) would likely result in the Office of the Inspector General of the Department of Health and Human Services imposing mandatory exclusion of Avanir from all federal healthcare programs under 42 U.S.C. § 1320a-7 for at least five years, the Department of Justice said.
In a separate civil resolution, Avanir has agreed to pay $96 million to the United States to resolve violations of the False Claims Act (FCA) related to its marketing of Nuedexta. The government alleged that between October 2010 and December 2016, Avanir provided remuneration in the form of money, honoraria, travel, and food to certain physicians and other healthcare professionals to induce them to write prescriptions for Nuedexta.
In conjunction with the civil settlement, Avanir entered into a five-year corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA requires, among other things, that Avanir implement additional controls around its interactions with physicians and conduct internal and external monitoring of promotional and other activities. It also increases individual accountability by requiring compliance-related certifications from its board and key executives.
The civil settlement resolves lawsuits filed in the Northern District of Ohio and the Northern District of Georgia by Kevin Manieri, Duane Arnold, and Mark Shipman, all former employees of Avanir, under the FCA’s whistleblower provisions, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.
Manieri will receive $12.4 million of the civil settlement, and Arnold and Shipman will receive about $5.4 million of the civil settlement. In addition to the $96 million being paid to resolve the United States’ civil claims, Avanir will pay an additional $7 million to resolve state Medicaid claims.
Additionally, the Northern District of Ohio announced indictments of four individuals, including former Avanir employees and one of the top prescribers of Nuedexta in the country, who were involved in the kickback scheme. All four are charged with conspiracy to solicit, receive, offer, and pay healthcare kickbacks. Avanir has agreed to cooperate in the prosecution of these individuals.
In a statement, Avanir said it “fully cooperated with the U.S. government throughout the investigation and engaged in extensive remedial measures,” and that “the individuals listed in the resolution agreements are no longer Avanir employees.”
“Avanir is deeply committed to regulatory and legal compliance, integrity and ethical behavior, and the health and safety of patients,” said Avanir’s President and Chief Executive Officer Wa’el Hashad. “Strengthening our culture of compliance has been one of my top priorities since I joined Avanir in 2017. We will ensure that our mission, vision, and values are upheld at every level of our company every day.”