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Avanir Pharmaceuticals to Pay $108M in False Claims Case

Analysis  |  By Jack O'Brien  
   September 27, 2019

The Department of Justice charged the California-based pharmaceuticals company with targeting elderly victims.

Avanir Pharmaceuticals in Aliso Viejo, California, was charged Thursday with paying kickbacks to physicians for writing prescriptions of Nuedexta and the company agreed to pay $95 million to resolve the allegations under the False Claims Act, according to a Department of Justice (DOJ) press release.

Additionally, four individuals were indicted by the Northern District of Ohio for participating in the scheme, including former employees from the California-based company.

The Northern District of Georgia announced a deferred prosecution agreement in which Avanir admits to prompting a doctor to increase the volume of prescriptions for Nuedexta, specifically targeting patients with dementia at long-term care (LTC) facilities.

Related: Hospital Developers Pay $1.1M to Settle False Claims Act Allegation

The agreement lasts for three years and requires Avanir to pay an additional $13 million in monetary penalties and forfeitures, bringing the total to $108 million.

Avanir's main marketing strategy for Nuedexta was to target LTCs, according to the DOJ, despite the fact that the drug was not approved by the Food and Drug Administration for use on patients with dementia.

The agency cited one instance where allegedly an Avanir employee bragged that a doctor had whole units at an LTC using Nuedexta, and "constantly reinitiated" treatment even after another doctor at the facility discontinued the use of the drug.

Related: Encompass Health to Pay $48M to Settle False Claims Allegations

This story was updated October 4, 2019.


Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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