Israeli Drug Company Agrees to Pay $27.6 Million for U.S. Psychiatrist’s Overprescribing of Anti-Psychotic Medicine

Friday, March 14, 2014
(photo: Dan Balilty, AP)

An Illinois doctor who had become notorious for overprescribing a powerful antipsychotic medication was paid to push the drug by its Israeli manufacturer, according government prosecutors who have settled the case out of court.


Teva Pharmaceutical Industries Ltd. has agreed to pay more than $27.6 million to settle allegations that it provided Chicago psychiatrist Michael Reinstein with financial incentives to prescribe clozapine to patients.


Clozapine can cause serious side effects, including seizures, heart-muscle inflammation and a reduction in white blood cells.


Reinstein was found to have prescribed more clozapine to patients in Medicaid’s Illinois program than all of the doctors in the Medicaid programs of Texas, Florida and North Carolina combined, according to ProPublica.


The investigative news website also reported that Reinstein had prescribed the drug to Medicare patients, despite the risks clozapine poses to the elderly.


At least three of the doctor’s patients died of clozapine intoxication.


Medicare had continued to allow Reinstein to prescribe even after Illinois’ Medicaid program suspended payments to the doctor and federal prosecutors accused him of fraud.


The settlement reached between a Teva Pharmaceuticals subsidiary, IVAX, and Illinois Attorney General Lisa Madigan and the U.S. Justice Department will result in $15.5 million going to the federal government and more than $12.1 million paid to Illinois.


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


The drug maker did not have to admit to any liability as part of the deal.


The settlement did not resolve a 2012 lawsuit filed by federal prosecutors against Reinstein that accuses IVAX of paying him $50,000 a year to work as a consultant, paying his nurse to promote clozapine, and funding a study at an affiliated research institute. That case is still ongoing.

-Noel Brinkerhoff


To Learn More:

Drug Company Agrees to Pay $27.6 Million to Settle Allegations Involving Chicago Psychiatrist (by Kara Brandeisky, ProPublica)

Pharmaceutical Company to Pay $27.6 Million to Settle Allegations Involving False Billings to Federal Health Care Programs (U.S. Department of Justice)


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