Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) does not admit that it paid an Illinois psychiatrist to prescribe its antipsychotic drug Clozapine, but it has agreed to pay the $27.6 million to settle the case. It will pay Illinois state government $15.5 million and the US federal government $12.1 million.
The case goes back to November 2012, when the US filed a civil suit against Chicago psychiatrist Dr. Michael Reinstein under the False Claims Act for defrauding Medicaid and Medicare. The case against the doctor is still pending. According to the charge sheet, beginning in 2003, Ivax LLC, a company subsequently acquired by Teva, paid Dr. Reinstein $50,000 in a consulting contract to prescribe Clozapine, and he became the largest prescriber of the drug in the US. The scheme allegedly continued after Teva acquired Ivax in 2006. The doctor and his family also received other benefits, including trips to sports events, fishing trips, and cruises, according to the Department of Justice. He also allegedly sought a job at Teva for a relative.
"Pharmaceutical companies must not be allowed to improperly influence physicians' decisions in prescribing medication for their patients," said US Attorney Zachary Fardon of the US District Court, Northern District of Illinois in Chicago said in a statement. "These decisions should be based solely on the patients' medical interest."
Published by Globes [online], Israel business news - www.globes-online.com - on March 12, 2014
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