Avanir Pharmaceuticals: The Sales Pitch Behind the Prescription

In the Avanir Nuedexta nursing homes fraud case, Avanir Pharmaceuticals agreed in September 2019 to pay $95,972,017 to resolve federal civil claims and $7,027,983 to resolve state Medicaid claims over alleged prescribing inducements and promotion for dementia-related behaviors. Nuedexta was approved to treat pseudobulbar affect, a condition marked by involuntary laughing or crying. For someone who knows the sales operation or the resident’s care, the question is what connected the push to sell Nuedexta to the prescription the government paid for.

Nuedexta Marketing in Nursing Homes

The government alleged that Avanir promoted Nuedexta for dementia-related behaviors in long-term-care facilities and offered inducements to prescribe it. According to the government, Avanir sought to capitalize on efforts by the Centers for Medicare and Medicaid Services to reduce the use of antipsychotics on dementia patients in long-term-care facilities. It allegedly instructed sales representatives to provide false and misleading information that patients with pseudobulbar affect could be exhibiting a wide variety of “behaviors,” such as crying without tears, moaning or making other inarticulate sounds, when those symptoms are commonly observed in patients who have dementia but no diagnosis of pseudobulbar affect. Residents received the prescriptions, while federal health care programs and state Medicaid programs faced the bills.

A February 2022 federal complaint concerning the same drug describes its 2010 Food and Drug Administration approval for pseudobulbar affect. The government said Nuedexta had no other approved use and had not been shown safe and effective for other forms of emotional instability that can occur in Alzheimer’s disease and other dementia.

The distinction matters to the resident’s chart. A sales pitch about managing dementia-related behavior and a documented diagnosis of pseudobulbar affect answer different questions. In the separate prescribing case discussed below, the government followed that difference all the way to the claims paid by Medicare Part D.

A 2022 study by the Department of Health and Human Services Office of Inspector General found that antipsychotic prescribing declined while anticonvulsant prescribing increased among Medicare long-stay nursing-home residents during 2011 through 2019. In the separate Alabama complaint, a sales representative described patient referrals for Nuedexta as a way to build the physician’s business while helping the home stay within CMS rules discouraging antipsychotic drugs.

The Payment Behind the Prescription

Avanir’s civil allegations concerned the inducement to prescribe as well as the use being promoted. The government alleged that between October 29, 2010, and December 31, 2016, Avanir provided money, honoraria, travel and food to certain physicians and other health care professionals to induce them to write Nuedexta prescriptions. One form was paying certain health care professionals to give talks about Nuedexta based on their willingness to prescribe it, at events the government called primarily social, with no educational value. An insider’s account can connect those commercial incentives to the people making treatment decisions: what the company offered, what it expected in return and what prescriptions followed.

A manufacturer payment, a medical practice’s referral schedule, a nursing home’s clinical notes and an insurer’s prescription claim each show a different part of that relationship. We connect them to understand who drove the prescribing and what the public program paid for. The manufacturer’s books alone cannot tell the resident’s clinical story, and the chart alone cannot explain the manufacturer’s payments.

Two Whistleblower Cases Behind Avanir’s Civil Settlement

The Avanir civil resolution involved three whistleblowers in two cases, all former employees of Avanir. Alongside the civil settlement, Avanir entered a five-year corporate integrity agreement with the HHS Office of Inspector General, requiring additional controls on its interactions with physicians and internal and external monitoring of its promotional and other activities.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In Avanir’s resolution, the Justice Department announced about $12.4 million for the whistleblower in one case and about $5.4 million jointly for the two whistleblowers in the other.

A Separate Nuedexta Case Shows How Referrals Worked

In February 2022, the United States filed a separate civil complaint against an Alabama psychiatrist over Nuedexta prescribing. The complaint calls the manufacturer Company A and alleges that it supplied patient referrals in return for prescriptions.

According to the complaint, the psychiatrist’s practice manager sent his monthly schedule to Company A’s salespeople. They went to nursing homes ahead of him and persuaded staff to refer residents. The government alleged that the referrals were valuable business supplied in return for Nuedexta prescriptions.

The complaint quotes a sales representative reporting what the psychiatrist was prepared to do:

The speaker records supplied another comparison. The government alleged that Company A paid the psychiatrist approximately $17,000 in fees and claimed expenses for presentations with no attendees. It also alleged that the company paid $15,550 in speaker fees for presentations that were canceled and never given. Paying for a talk that never happens leaves a simple question about what the payment was buying.

The complaint then followed an individual resident’s treatment. It alleged that a pseudobulbar-affect diagnosis and Nuedexta order appeared after an earlier consultation reported no new symptoms. The government said the chart showed no intervening symptoms consistent with the diagnosis. The complaint connected those orders to paid Medicare Part D claims.

Across the psychiatrist’s patients during 2015 through 2019, the complaint alleged that Medicare paid over $6 million for Nuedexta prescriptions and Alabama Medicaid paid over $800,000.

What Evidence Is Needed to Prove Fraud?

For a Nuedexta prescribing case, the useful evidence connects the sales pitch and financial benefit to the referral, clinical decision and paid claim. An employee may know one part of that sequence particularly well. Our work is to build the connection with them.

The Alabama complaint makes those connections concrete. Speaker agreements described what the physician was being paid to deliver, while attendance records and canceled events showed what actually happened. The practice schedule and sales communications connected visits to referrals. The clinical notes showed the symptoms documented before and after the prescription. Claims identified the drug billed and the program paying for it.

That is why a sales employee’s view can matter alongside a clinician’s or billing employee’s. Someone who knows how speakers were selected may understand the purpose of a payment. Someone who saw the resident may understand what the chart leaves unexplained. We work with that knowledge to connect the business decision to the healthcare claim.

The Pattern Also Reaches the Pharmacy

The same prescribing incentive can operate through a long-term-care pharmacy. In the Omnicare Depakote settlement, the government alleged that Abbott supplied grants, educational funding, rebates tied to use and other benefits. Omnicare was the pharmacy receiving the alleged inducements, while Abbott resolved the manufacturer’s conduct separately.

The Teva Pharmaceuticals USA and IVAX settlement concerned alleged consulting payments and other benefits to induce a physician to prescribe generic clozapine for Medicare and Medicaid patients in nursing homes and hospitals.

The money may reach the physician or the pharmacy, while the resident receives the drug and a public program pays the claim.

You Know What Drove the Prescription

If you saw a drug company’s payments or sales demands shape nursing-home prescribing, talk with our whistleblower experts about what happened inside the business. We build your strongest pharmaceutical whistleblower case with you and bring in pharmaceutical fraud whistleblower lawyers who understand prescribing incentives and Medicare claims. We stay beside you from the first account of the sales operation through the pursuit of a recovery.