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Drugmaker Avanir Has Agreed to Pay $108 Million to Settle Allegations That It Paid Illegal Kickbacks to Promote Nuedexta

Drugmaker Avanir Has Agreed to Pay $108 Million to Settle Allegations That It Paid Illegal Kickbacks to Promote Nuedexta

A couple of years ago, sales of Avanir’s drug Nuedexta saw spectacular growth. A DOJ investigation prompted by a whistleblower complaint has just concluded with a $108-million settlement. 

Originally developed to treat a very rare condition, Nuedexta has been systematically prescribed for off-label uses, specifically targeting nursing home patients covered by Medicare.  

The whistleblowers, who will receive a $17 million award, claimed that the pharmaceutical company routinely paid certain physicians as much as $50,000 per year to prescribe the drug to patients who didn’t need it. The alleged misconduct appears particularly egregious considering Nuedexta was often prescribed to patients with dementia and Alzheimer’s, for whom research has shown it can be harmful, causing a twofold increase in falls. 

Nuedexta has been approved by the FDA to treat a neurological condition known as pseudobulbar affect (“PBA”), which causes “episodes of involuntary and uncontrollable crying and/or laughing outside of socially appropriate circumstances.” According to the American Journal of Managed Care, only one in about 150 Americans suffer from PBA. 

In fact, dextromethorphan-quinidine (Nuedexta) was approved to treat PBA in patients with amyotrophic lateral sclerosis (“ALS”) or multiple sclerosis (“MS”). Earlier this year, a comprehensive analysis of insurance records revealed that it was, however, prescribed for patients without those conditions in 75 percent of the cases. 

One of the study’s authors wrote, "Our study identified that this medication is primarily prescribed to patients with dementia or Parkinson's disease. This is concerning since very few studies have evaluated the effectiveness or safety in this patient population."  

After the FDA approved Nuedexta for the treatment of PBA in 2010, the California-headquartered drugmaker deployed a massive advertising campaign. TV commercials for Avanir’s drug featured Hollywood star Danny Glover and targeted a wide range of consumers who were not necessarily diagnosed with MS or ALS.

An analysis of Medicare-reimbursed prescriptions of Nuedexta revealed that:

  • The number of prescriptions jumped 51.2-fold, from 9,346 in 2011 to 478,481 in 2016
  • The number of patients who filled Nuedexta prescriptions jumped 15-fold, from 3,300 in 2011 to 50,400 in 2016
  • About 75 percent of Medicare’s spending on Nuedexta was for patients over age 65  

According to prosecutors, Avanir achieved this spectacular growth in sales by offering illegal kickbacks to prescribing physicians, often in the shape of speaking fees. The talks given by these doctors were seldom of any scientific value, the DOJ reports.

Kevin Manieri, a former Avanir sales director who filed the first whistleblower complaint, said that some doctors received thousands of dollars in exchange for their promotion of Nuedexta. High prescribers, who could write 50 or 60 Nuedexta prescriptions in a single week, were paid handsomely for their frequent Avanir-sponsored talks. 

Danny Glover
Danny Glover: Face of Avanir’s advertising campaign

Some of these individuals prescribed Nuedexta to a disproportionate number of patients in nursing home settings. In one shocking case, a doctor prescribed the drug to one out of every three patients in a long-term care facility.

For Assistant Attorney Jody Hunt of the Department of Justice’s Civil Division, “Kickbacks have the power to corrupt a provider’s medical judgment. And it is particularly concerning when a pharmaceutical company uses kickbacks to drive up sales in connection with a vulnerable population, such as elderly patients in nursing care facilities.”      

Besides paying millions of dollars to resolve the fraud allegations, Avanir has entered into a deferred prosecution agreement with the government. The DOJ said the company has extensively collaborated with the fraud investigation. Several individuals have been indicted in the case, including a former Avanir manager and an Ohio-based doctor. 

If you suspect your pharmaceutical employer or other company is participating in similar illegal drug marketing tactics or other pharmaceutical fraud, contact us confidentially by emailing us at: [hidden email] or call us at 202.780.9957.

We connect potential whistleblowers with the necessary experts and qualified lawyers required to maximize cash awards and protection from retaliation.  There is no fee for our services. The Pharmaceutical Integrity Coalition (PIC) is an independent Advocacy Group, with no ties to the Pharma industry.

Related topics: Avanir | Nuedexta

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