(COLUMBUS, Ohio) — Ohio Attorney General Dave Yost today joined other states and the federal government in announcing a settlement with Avanir Pharmaceuticals over allegations that the company paid kickbacks to medical professionals and engaged in off-label marketing tactics to promote its flagship drug Neudexta unlawfully.
“Kickbacks are to ethics like a magnet to a compass – you lose your direction,” Yost said. “Avanir’s crafty marketing scheme steered doctors toward corruption, but even worse, it put patients at risk for improper care.”
Avanir will pay $103 million to the states and federal government, including $7 million earmarked for Medicaid programs to resolve allegations that improper marketing of Neudexta caused false claims to be submitted to government health care programs. Ohio will receive about $3.7 million from the settlement.
In October 2010, Avanir’s Nuedexta was approved by the FDA for the treatment of Pseudobulbar Affect (PBA). According to the FDA-approved label for Nuedexta, “PBA occurs secondary to a variety of otherwise unrelated neurologic conditions, and is characterized by involuntary, sudden and frequent episodes of laughing and/or crying.” Neudexta was not approved for any other uses.
The settlement resolves allegations that Avanir marketed Neudexta to medical professionals treating patients in long-term care facilities for uses other than PBA, which were not FDA approved and also were not medically accepted by the statutes and regulations governing the federal health care programs. The improper activity occurred from October 2010 through December 2016.
Avanir instructed sales representatives to provide false and misleading information to medical professionals regarding PBA patient behaviors. At the same time, the representatives provided doctors with kickbacks, including payment for giving talks known as “speaker’s programs,” in exchange for prescribing Nuedexta.
As a condition of the settlement, Avanir will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General.
A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Avanir on behalf of the settling states. Team members included representatives from the offices of the attorneys general of Ohio, California, Georgia, New York, and Texas.