A settlement has been reached to resolve allegations brought about by the government against Teva Pharmaceuticals Industries Limited and IVAX LLC, a Teva subsidiary, who are accused of making payments to induce prescriptions of an anti-psychotic drug for Medicare and Medicaid beneficiaries.
Under the terms of the settlement, Teva must pay the federal government close to $15.5 million and the state of Illinois more than $12.1 million.
The settlement resolves allegations that Teva and IVAX made payments to an Illinois physician, Dr. Michael J. Reinstein, to induce the prescription of generic clozapine, an anti-psychotic medication. The United States alleged that the payment scheme involving Reinstein began in August 2003, when Reinstein agreed to switch his patients to generic clozapine if IVAX, which was subsequently acquired by Teva Pharmaceuticals’ parent corporation, agreed to pay Reinstein $50,000 under a one-year “consulting agreement” and to provide other benefits to Reinstein , in violation of the federal Medicare and Medicaid Anti-Kickback Statute. In addition to direct payments to Reinstein, IVAX allegedly also provided all-expenses paid trips to Miami for Reinstein, his wife and several of his employees. Reinstein quickly became the largest prescriber of generic clozapine in the country, and prescribed the drug for many elderly patients. Allegedly, the payments and other forms of remuneration from IVAX and later Teva Pharmaceuticals continued for many years, and resulted in the submission of thousands of false claims to the Medicare Part D and Illinois Medicaid programs.
