False Claims Settlement Of $7.55 Million Related To Opioid Drug

The U.S. Department of Justice (DOJ) recently announced that Galena Biopharma, Inc. (Galena) will pay over $7.55 million to resolve False Claims Act (FCA) allegations related to kickbacks inducing doctors to prescribe Abstral, a Galena product. The allegations stem from a whistleblower suit filed under the FCA. The FCA’s whistleblower provisions allow for lawsuits on behalf of the U.S. by private parties, with the private party standing to obtain a portion of the payout if they prevail. The payout depends on whether or not the government decides to join the suit as well. In this particular case, the private party who initiated the suit stands to receive more than $1.2 million of Galena’s payout.

Abstral, a fentanyl-based drug, and other drugs like it are already closely monitored by government at all levels as the country continues to face an ongoing opioid epidemic. The DOJ’s allegations state that Galena provided kickbacks in the form of free meals, honoraria, speaker fees, and performance-based rebates – all to induce the prescription of Abstral by physicians and pharmacies. Further allegations state that Galena paid physicians for the referral of patients to Galena’s patient registry study, which purported to collect data on Abstral’s effects on patients, but actually had the intended purpose of inducing physicians to prescribe the drug. Even though Galena only owned the drug from 2013 to 2015, that short time period saw Medicare, TRICARE, and the Federal Employees Health Benefits program pay $13.6 million for Abstral prescriptions. The payment of just over $7.55 million resolves Galena’s civil liability for submission of false claims to those programs.

This settlement illustrates two important issues currently facing our country. One issue is the opioid crisis, which some studies link to the ease with which one can gain access to fentanyl and other like substances. The other issue is FCA violations, which continue to increase in volume and in amount of penalty or settlement. Though the opioid crisis is a very complex issue with no concrete solution, FCA violations can largely be guarded against by being familiar with the law and consulting a health care attorney.