The California Attorney General Bonta reported a nationwide settlement agreement against Pfizer-owned Biohaven Pharmaceutical Holding Company for submitting false claims to the Medicaid program and other government healthcare programs. The settlement addresses claims that Biohaven participated in a kickback scheme from 2020 to 2022, where they provided cash and extravagant gifts to healthcare providers in return for prescribing their medication, Nurtec.
The allegations against Biohaven claimed that the company engaged in several practices to provide kickbacks to healthcare providers as follows:
– – Speaker Programs: Biohaven allegedly organized company-sponsored speaker programs where healthcare providers would give presentations about their migraine medication, Nurtec ODT. These programs were intended to promote the drug to other healthcare providers. In numerous instances, speaker events were allegedly attended by the providers’ spouses, family members, and friends, who had no educational need to attend. Also, certain providers allegedly attended multiple programs on the same topic, and received expensive meals and drinks paid for by Biohaven, without obtaining any meaningful educational benefit.
– – Remuneration: Healthcare providers who participated as speakers received honoraria payments and expensive meals at high-end restaurants. Some providers were allegedly paid tens of thousands of dollars, sometimes exceeding $100,000, for participating in these programs1.
– – Repeat Attendance: Certain providers attended multiple speaker programs on the same topic, which the government alleged provided no meaningful educational benefit.
Non-Educational Attendees: Biohaven allegedly invited individuals with no educational need to attend, such as the speakers’ spouses, family members, or friends.
– – Whistleblower Allegations: The allegations were initiated by a whistleblower, Patricia Frattasio, a former Biohaven sales representative, who reported these practices. On August 5, 2021, Frattasio filed a qui tam action in the United States District Court for the Western District of New York captioned United States of America et al., ex. rel Patricia Frattasio v. Biohaven Pharmaceuticals Holding Company Ltd., Case No. 6:2 l -CV-06539.
These actions were claimed to violate the Anti-Kickback Statute, which prohibits offering or paying anything of value to induce the referral of items or services covered by federal healthcare programs.Approximately $50.2 million of the settlement constitutes the federal portion of the recovery and approximately $9.5 million constitutes a recovery for State Medicaid programs. Ms. Frattasio will receive approximately $8.4 million as her share of the federal recovery in this case.
Pfizer has agreed to pay $59,746,277, plus interest, on behalf of Biohaven to resolve allegations that Biohaven engaged in unlawful kickback practices to encourage providers to prescribe Nurtec. That payment will be shared by the federal government and several states, including California. The State of California will receive $413,776 for its share of losses to California’s Medicaid program, Medi-Cal.
Pfizer-owned Biohaven Pharmaceutical Holding Company is headquartered in New Haven, Connecticut. Biohaven was established by a group of biopharmaceutical executives in 2013 with a vision to develop innovative treatments for neurological diseases. The company focused on research and development, targeting conditions such as Alzheimer’s disease, migraine, and anxiety disorders. Pfizer announced its intention to acquire Biohaven in 2022 for approximately $11.6 billion. The acquisition included Biohaven’s breakthrough calcitonin gene-related peptide (CGRP) portfolio, including Nurtec ODT, a migraine therapy.
In a statement, Pfizer emphasized that the settlement relates to conduct that occurred before Pfizer’s acquisition of Biohaven in October 2022. They also mentioned that they are pleased to resolve this legacy matter so they can continue focusing on patient needs. Pfizer promptly terminated the speaker programs once the acquisition was completed, which may have contributed to the favorable terms of the settlement.
The claims resolved by the settlement are allegations only and there has been no determination of liability.