Galena Biopharma Inc. (Galena) will pay more than $7.55
million to resolve allegations under the civil False Claims Act that it paid
kickbacks to doctors to induce them to prescribe its fentanyl-based drug
Abstral, the Department of Justice announced today.
“Given the dangers associated with opioids such as Abstral,
it is imperative that prescriptions be based on a patient’s medical need rather
than a doctor’s financial interests,” said Acting Assistant Attorney General
Chad A. Readler of the Justice Department’s Civil Division. “The Department of
Justice intends to vigorously pursue those who offer and receive illegal
inducements that undermine the integrity of government health care programs.”
“The conduct alleged by the government and resolved by
today’s settlement was egregious because it incentivized doctors to
over-prescribe highly addictive opioids,” said Acting U.S. Attorney William E.
Fitzpatrick for the District of New Jersey. “This settlement constitutes
another example of the Department of Justice’s ongoing efforts to battle the
opioid epidemic on every front.”
The United States contends that Galena paid multiple types
of kickbacks to induce doctors to prescribe Abstral, including providing more
than 85 free meals to doctors and staff from a single, high-prescribing
practice; paying doctors $5,000, and speakers $6,000, plus expenses, to attend
an “advisory board” that was partly planned, and attended, by Galena sales team
members and paying approximately $92,000 to a physician-owned pharmacy under a
performance-based rebate agreement to induce the owners to prescribe Abstral.
The United States also contends that Galena paid doctors to refer patients to
the company’s RELIEF patient registry study, which was nominally designed to
collect data on patient experiences with Abstral, but acted as a means to
induce the doctors to prescribe Abstral. Galena has not marketed any
pharmaceutical drug since the end of 2015.
Two of the doctors who received remuneration from Galena
were tried, convicted and later sentenced to prison in the U.S. District Court
for the Southern District of Alabama following a jury trial of, among other
counts, offenses relating to their prescriptions of Abstral. Galena cooperated
in that prosecution.
The settlement resolves a lawsuit filed by relator Lynne
Dougherty under the whistleblower provisions of the False Claims Act, which
permit private parties to file suit on behalf of the United States and obtain a
portion of the government’s recovery. As part of today’s resolution, Ms.
Dougherty will receive more than $1.2 million. The matter remains under seal as
to allegations against entities other than Galena.
The settlement is the result of a coordinated effort by the
Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office
for the District of New Jersey, with assistance from the Department of Health
and Human Services Office of Counsel to the Inspector General, and the Food and
Drug Administration Office of Criminal Investigations’ New York Field Office.
The claims settled by this agreement are allegations only;
there have been no admissions of liability by Galena.
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