Drugmaker Avanir Pays $116 Million in Fraud Settlement After Pushing Medication on Dementia Patients

A drugmaker agreed to pay $116 million in penalties to settle charges by the U.S. government that it sought to improperly influence doctors in prescribing an unproven medication to dementia patients living in nursing homes.

In a settlement announced by the Justice Department on September 26, Avanir Pharmaceuticals admitted to paying at least one doctor kickbacks to encourage becoming a high prescriber of a drug called Nuedexta. Avanir also allegedly paid the doctor to encourage other healthcare providers to prescribe the drug, which is only FDA-approved for treatment of a rare disorder called pseudobulbar affect (PBA).

PBA, which involves sudden and frequent episodes of laughing and crying, is most commonly seen in people who have multiple sclerosis or amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease. Fewer than 1 percent of all Americans are diagnosed with PBA.

In announcing the settlement, Assistant Attorney Jody Hunt of the Justice Department Civil Division said that “kickbacks have the power to corrupt a provider’s medical judgment.”

“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,” Hunt added.

According to information provided to the government by whistleblowers, Avanir directed its salespeople to market Nuedexta in nursing homes, targeting people living with Alzheimer’s or other forms of dementia.

In a 2017 expose, CNN reported that Avanir was essentially conducting an uncontrolled experiment on elderly patients living in nursing homes. In the one study that Avanir conducted, Alzheimer’s patients who received the drug were found to experience falls at twice the rate as those on a placebo.

Yet despite those troubling findings, CNN reported that since 2012 more than half of all Nuedexta prescriptions had been written in long-term care facilities. By 2016, the number of pills prescribed had increased to 14 million, a jump of nearly 400 percent. Nuedexta sales were reported at $300 million that year.

In a news release, Avanir said it was “pleased to resolve the matter,” adding that it is “deeply committed to regulatory and legal compliance, integrity and ethical behavior.”

In addition to the settlement with Avanir, the Justice Department also said that it had indicted four people who paid or received kickbacks from Avanir. All four were charged with conspiracy to solicit, receive, offer and pay healthcare kickbacks. Avanir pledged to cooperate in the prosecution of the four men.

“Doctors should prescribe medicine based on what is best for their patients, not on which company is paying for their travel and meals,” U.S. Attorney Justin Herdman said.