Teva Pharmaceuticals and subsidiary IVAX LLC have agreed to a $27.6 million settlement over charges that they paid kickbacks to a psychiatrist for putting nursing home residents on the antipsychotic drug clozapine, the U.S. Department of Justice announced Tuesday.
IVAX allegedly paid a $50,000 “consulting fee” to Chicago physician Michael J. Reinstein, M.D., in exchange for the doctor putting nursing home patients on the generic clozapine made by the company, according to the federal authorities. IVAX also allegedly provided other perks and payments over several years, during which time Reinstein became the No. 1 prescriber of generic clozapine in the country. Teva acquired IVAX in 2005, two years after prosecutors say the kickback arrangement began.
Clozapine poses potentially deadly risks for elderly patients, including a diminished white blood cell count. By 2009, at least three of Reinstein’s patients had died of clozapine intoxication, according to an investigation by ProPublica and the Chicago Tribune.
A civil lawsuit against Reinstein is pending in the Northern District of Illinois. He filed at least 140,000 false claims for clozapine in the course of prescribing the drug unnecessarily to “thousands” of nursing home residents, the U.S. attorney charged.
Neither Pennsylvania-based Teva nor Florida-based IVAX has admitted any wrongdoing, and the settlement does not assign liability to either company, according to the DOJ. Teva had not responded to a call from McKnight’s as of press time.