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Drug firm Teva subsidiary to pay $27.6M to settle false billing claims

March 11, 2014 at 4:00 PM

CHICAGO, March 11 (UPI) -- Drug manufacturer Teva Pharmaceuticals USA and a subsidiary will pay more than $27.6 million to resolve false billing claims, the U.S. Justice Department said.

An agreement reached by federal and Illinois officials, Teva and subsidiary IVAX settles claims that the pharmaceutical company violated the federal False Claims Act by making payments to Chicago physician Dr. Michael J. Reinstein in return for his prescribing an anti-psychotic medication to thousands of Medicare and Medicaid patients, Justice Department officials said in the release.

Involved was the promotion of the generic drug, clozapine, a rarely used anti-psychotic medication with serious potential side effects and considered a drug of last resort, the Justice Department said. The alleged scheme resulted in the submission of thousands of false claims to Medicare Part D and Illinois Medicaid.

Teva will pay the United States nearly $15.5 million and the state of Illinois more than $12.1 million, plus interest calculated from September 2013, officials said.

A civil case against Reinstein is pending before a federal court in Chicago.

"Pharmaceutical companies must not be allowed to improperly influence physicians' decisions in prescribing medication for their patients," said Zachary T. Fardon, U.S. attorney for the Northern District of Illinois. "Instead, those decisions must be made solely on the basis of the patient's best medical interests."

Teva Pharmaceuticals USA in Pennsylvania and IVAX LLC in Florida are subsidiaries of Teva Pharmaceuticals Industries Ltd., based in Israel.

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