Dermatology co Foamix mulls Nasdaq IPO
A lawsuit against a Chicago psychiatrist allegedly reveals bribes paid to him for years by Ivax and then by Teva, after it acquired the company.
A lawsuit filed by the United States with the US Federal Court for the Northern District of Illinois against a Chicago psychiatrist suspected of defrauding the authorities allegedly reveals bribes paid to him for years by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). Dr. Michael Reinstein is accused of filing $190,000 in false claims to Medicare and Medicaid for medications and treatments given to patients.
The statement of claim describes how Reinstein received bribes from Ivax, and that this practice continued after Teva acquired the company in 2006. Ivax wanted to persuade the psychiatrist to prescribe for patients a generic drug for the treatment of schizophrenia, clozapine, which it manufactures, instead of the brand drug made by Novartis.
Until 2003, Reinstein refused, but when Novartis notified Reinstein that it would be withdrawing its “support” for him, he was persuaded to switch to clozapine.
According to the statement of claim, Dr. Reinstein agreed to switch to generic clozapine, after Ivax agreed to his conditions, including an annual fee of $50,000 for a consulting agreement.
Teva is not named as a defendant in the case; only Dr. Reinstein.
Half of patients received the drug
The statement of claim states that Dr. Reinstein became the largest prescriber of generic clozapine in the US, in contrast to his colleagues who did not prescribe the drug. More than 50% of Dr. Reinstein's patients received clozapine, compared with its general market share of 4%.
According to the statement of claim, Dr. Reinstein was not satisfied with an annual payment, and asked for, and received, additional benefits. In 2004, he was flown, at Ivax's expense, to the company's Miami headquarters, and was fully reimbursed for expenses for himself, his wife, and other associates. During this trip, Ivax paid for Reinstein and his party to go on a fishing trip, and also picked up the check for at least one dinner costing more than $1,000.
The same thing happened in 2005, when Ivax paid for a boat cruise, a golf outing, and at least two dinners, according to the statement of claim.
The statement of claim says that, shortly before Teva acquired Ivax, Dr. Reinstein greatly reduced the number of clozapine prescriptions he issued, and that this concerned Teva. In April 2006, Teva paid for a trip to Miami by Dr. Reinstein and his associates, including a $2,300 boat cruise and expensive dinners.
The statement of claim states that Dr. Reinstein pressed Teva to hire an associate. When Teva did so, Dr. Reinstein put several hundred patients back on Teva's clozapine.
The contract between Teva and Dr. Reinstein was only terminated after "The Chicago Tribune" published an article in 2009 questioning the appropriateness of Reinstein’s use of clozapine. Shortly after this article appeared, Reinstein contacted Teva and asked that it should no longer pay him pursuant to the “speaker agreement.”
Teva said in response, "Teva has no comment on the allegations against Dr. Reinstein. Teva has been cooperating with the government’s investigation conducted in the US regarding this matter, and will continue to do so. Clozapine (which is not sold in Israel) is an important medicine approved for treatment of severe schizophrenia in patients who fail standard therapy. Although clozapine has proven to be effective for this indication, there are potential serious side effects that require careful medical supervision. Teva US maintains a Clozapine Patient Registry to assist heath care professionals in the monitoring of patients taking Teva US clozapine."
Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
You comment was recieved and soon will be published.
Load more comments
The developer of foam-based dermatology treatments is seeking underwriters.
Can-Fite Biopharma raises $5m
The proceeds will finance clinical trials for psoriasis, glaucoma, and liver cancer treatments.
Teva switching Copaxone users to new dosage
"Bloomberg": Teva has switched 8.7% of Copaxone's multiple sclerosis patients to the 40 milligram dosage.
Immune Pharmaceuticals raises $11.7m on Nasdaq
The money raised will fund a Phase II trial of ulcerative colitis drug bertilmumab.
XTL Biopharma files to raise $40m on Nasdaq
XTL plans to initiate a large Phase IIb clinical trial for the treatment of Lupus.
Teva launches generic cancer drug
Brand Xeloda, made by Genentech, had $754 million in US sales in 2013.
Yelin Lapidot takes stake in Brainsway
Brainsway raised NIS 41 million in the private placement.
Barclays upgrades Teva
Barclays raised its recommendation to "Overweight" and its target price to $65.
BiolineRX raises $24m in Nasdaq offering
Three months ago, the company announced promising preliminary clinical trial results.
Teva VP Ika Abravanel resigns
Abravanel's is the first senior departure from Teva since Erez Vigodman became CEO.
FDA approves Pluristem cell production facility
Pluristem's Haifa plant can produce 150,000 doses of PLX cells annually.
Desheh: Splitting Teva will not create value
Teva CFO Eyal Desheh says Teva's tight integration means that a split makes no sense.
InsuLine expanding in Europe
24Care will distribute the company's InsuPad product in the Netherlands and Belgium.
Teva launches generic breast cancer, osteoporosis drug
Teva has 180 days of marketing exclusivity for generic Evista, which had 2013 US sales of $824 million.
BiolineRX raising $21m in Nasdaq secondary offering
The company will use the proceeds to develop leukemia and celiac disease drugs.
MediWound sets terms for $92m Nasdaq IPO
The burns and wounds treatment developer's offering is at a value of $350-370 million.
Opko losses triple
CEO Phillip Frost: From an R&D perspective, all our programs are progressing.
D-Pharm doubles on good interim stroke study results
The Phase IIa trial interim results found the company's drug was safe for cerebral strokes.
Perrigo selling OTC drugs through Amazon
Perrigo: It is also a platform for obtaining good information about consumer behavior.
Teva launches bipolar, schizophrenia treatment
Adasuve is the first orally inhaled medicine for the acute treatment of agitation in schizophrenia and bipolar I disorder.
Perrigo acquires Aspen Global products for $51m
Perrigo bought value-brand OTC products sold in Australia and New Zealand.
Galmed updates $30m Nasdaq IPO prospectus
The liver disease drug developer will issue shares at a company value of $132 million.
Enzymotec shareholders raise $131m in offer to sell
Kibbutz Ma'anit's Galam reportedly sold shares for $46 million.
Compugen raises $63m, Magic $51m
The two companies held secondary offerings on Nasdaq on the basis of shelf prospectuses.
If Rose Fostanes played basketball
Reforms in regulations for foreign caregivers are welcome, but don't go far enough.
Private treatment kills public healthcare
If the German Committee validates private healthcare, it will be the last nail in public healthcare's coffin, argues Prof Dani Filc.
Reducing the number of polyps that colonoscopies miss
EndoChoice's Israel development center has devised an endoscope with a 330-degree arc.
Neopharm moves into orphan drugs
The company, better known for marketing others' products, has been quietly building up its innovative capacity, as VP Tal Fuhrer relates..
Merck Serono Israel incubator nurtures early stage projects
Merck Germany head of pharmaceuticals Dr. Stefan Oschmann says R&D is enjoying a renaissance at big pharma companies.
Israeli biomed cos bring in US CEOs
"Globes" speaks to 3 US CEOs appointed to boost marketing at TASE traded medical device companies.