Home health remedies Otsuka’s Avanir agrees to pay $108M over Neudexta kickbacks probe

Otsuka’s Avanir agrees to pay $108M over Neudexta kickbacks probe

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After a yearslong federal investigation over Neudexta marketing and an “agreement in principle” earlier this year, Otsuka’s Avanir has reached a settlement with the feds. The drugmaker agreed to pay more than $108 million to resolve civil and criminal allegations as well as assist in a prosecution against former employees and a top prescriber. 

In a series of criminal and civil complaints, the feds alleged Avanir paid kickbacks to doctors to boost their prescribing of Neudexta, which is approved to treat pseudobulbar affect, or uncontrollable crying or laughing. Authorities say Avanir instead promoted the drug for elderly dementia patients in long-term care facilities. 

In one complaint, authorities in Georgia said Avanir violated the Anti-Kickback Statute by paying a doctor to prescribe Neudexta at a high rate to beneficiaries of federal healthcare programs and to recommend that other doctors do the same. In addition, U.S. attorneys in Ohio indicted three former employees and a top Neudexta prescriber nationally for their participation in the kickback scheme. 

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Avanir is paying more than $95 million to resolve allegations of misleading marketing and that it violated the False Claims Act. It’s additionally paying a $7.8 million penalty and forfeiting more than $5 million in a deferred prosecution agreement over the case in Georgia. Avanir is assisting with the prosecution in the Ohio kickbacks case. 

RELATED: Otsuka expects to shell out $120M to settle Avanir’s Nuedexta marketing probe 

The company, which has been part of Otsuka since a 2014 buyout, has faced years of scrutiny over its Neudexta marketing. In 2017, CNN reported that the company had marketed the drug primarily to nursing home residents, even though Neudexta hasn’t been tested extensively in elderly people. Sales had surged to $300 million in 2016, the network said. 

Earlier this year, the company said it reached an “agreement in principle” with authorities to resolve the Department of Justice’s investigation. At the time, Otsuka estimated it would cost $120 million to resolve the probe.  

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