Frohsin Barger & Walthall managing partner Jim Barger was recently quoted in a CNN article reporting a Department of Justice investigation into the sales and marketing of a drug used to help treat Parkinson’s patients suffering from debilitating psychosis.
The CNN article details a federal investigation of Acadia Pharmaceuticals and its’ Parkinson’s drug Nuplazid. The investigation was revealed in Acadia’s filings with the Securities and Exchange Commission. Citing a desperate need for a seriously ill population, the Food and Drug Administration approved Nuplazid in 2016 despite a conclusion from the government’s medical reviewer that the benefits of the antipsychotic medication did not outweigh its risks.
In November SEC filings, Acadia said it had received a civil investigative demand, or CID, requesting certain documents and information under the False Claims Act, which is a federal statue used to recoup fraudulent gains. The company said it had received the CID in September. It did not provide details, to CNN or in its filings, about what prompted the investigation.
The majority of False Claims Act investigations start with lawsuits filed by whistleblowers with knowledge of fraud against the government. Pursuant to the False Claims Act, whistleblower, or qui tam, lawsuits are kept under seal until the government has time to investigate the allegations and decide whether to intervene in the lawsuit. If a recovery is made based on the whistleblower’s allegations, either through government intervention or if the whistleblower and their counsel elect to prosecute the case, the whistleblower is entitled to a percentage of the recovered funds. The False Claims Act provides for a recovery of three times the amount of money the government was defrauded as well as civil penalties for each false claim submitted.
As managing partner of Frohsin Barger & Walthall, specializing in False Claims Act litigation and as a professor at the University of Alabama School of Law, Jim Barger is quoted in the CNN article describing the implications and prevalence of CIDs in health care fraud investigations, stating: “CIDs are unfortunately common — but in the same way that health care fraud is unfortunately common. They signal that DOJ is aware of credible allegations of fraud. Companies and investors should take CIDs very seriously and proceed with caution. They are not to be shrugged off as some routine inquiry.”
The CNN article goes on to describe the eye-brow raising statistic that in 2016, when Nuplazid was released, roughly 25% of all prescribing doctors, who wrote more than ten prescriptions for Nuplazid, were paid consultants of Acadia Pharmaceuticals. There have been numerous False Claims Act cases, some resulting in settlements of hundreds of millions of dollars, where the government has alleged pharmaceutical companies have engaged in illegal marketing by effectively paying physicians to prescribe certain drugs. These payments, designed to illegally influence the physician’s prescribing patterns, are often in the form of speaker engagements, consulting payments and other perks such as lavish meals and vacations.
The CNN article also echoes earlier CNN articles reporting a high number of deaths reported to the FDA involving patients taking Nuplazid.
To read the full CNN article, click here.
If you have knowledge of pharmaceutical fraud or issues involving improper pharmaceutical marketing practices, contact Frohsin Barger & Walthall.