A settlement has been reached in a whistleblower class action lawsuit brought against Dr. Michael J. Reinstein, who is accused of receiving illegal kickbacks and benefits totaling nearly $600,000 from two pharmaceutical companies in exchange for regularly prescribing an anti-psychotic drug — clozapine — to his patients.
The civil settlement resolves a civil action filed against Reinstein by the federal government for accepting payments from pharmaceutical manufacturer Teva Pharmaceuticals USA Inc. and a subsidiary, IVAX LLC, to induce the use of generic clozapine. The United States alleged that in exchange for these payments, Reinstein prescribed clozapine for Medicare and Medicaid beneficiaries. The United States also alleged that Reinstein submitted and/or caused to be submitted to both Medicaid and Medicare claims for “pharmacologic management” of those patients for whom he prescribed clozapine. However, Reinstein allegedly did not engage in meaningful pharmacological management, because his prescribing decisions for his clozapine patients were based on the kickbacks he received rather than his independent medical judgment or the individual needs of his patients. In March 2014, Teva Pharmaceuticals USA Inc. and IVAX LLC, paid the United States and the state of Illinois $27.6 million to settle allegations that they violated the state and federal False Claims Acts by making payments to Reinstein in return for him prescribing clozapine to his patients.
As set forth in the plea agreement, the payment scheme involving Reinstein began in August 2003, when Reinstein agreed to switch his patients to generic clozapine if IVAX 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 various employees of Reinstein. Reinstein quickly became the largest prescriber of generic clozapine in the country and prescribed the drug to 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.
