Galena Biopharma pays over $7.5 million to settle kickback claims related to fentanyl-based drug

by Ben Vernia | September 10th, 2017

On September 8, the Department of Justice announced that Galena Biopharma, Inc., will pay more than $7.55 million to settle allegations, originally brought by a whistleblower, that the company provided kickbacks to healthcare providers to encourage prescribing of the company’s opioid pain killer. According to DOJ’s press release:

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.

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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.

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DOJ announced that the whistleblower will receive $1.2 million (a 15.9% relator’s share), and that the case remained under seal because claims against other entities were still under investigation.

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