Pfizer to pay nearly $60M over kickbacks for migraine drug developed by New Haven-based Biohaven
PHOTO | TYLER RUSSELL/CONNECTICUT PUBLIC
Pfizer's campus in Groton.
Pfizer has agreed to pay $59.75 million to settle claims that Biohaven Pharmaceutical Holding Co., which it acquired in 2022, defrauded Medicare and other healthcare programs by paying kickbacks to doctors.
The kickbacks were meant to encourage doctors to prescribe the migraine drug Nurtec ODT, which is a violation of the False Claims Act, the U.S. Department of Justice said.
In October 2022, Pfizer completed the acquisition of Biohaven Pharmaceutical Holding Co., the maker of Nurtec ODT, from Biohaven Pharmaceuticals Inc. for about $11.6 billion.
After the sale, Biohaven’s New Haven-based leadership team spun off a new company and started developing new biopharmaceutical products.
According to authorities, Biohaven knowingly caused false claims to be submitted to Medicare through the kickback scheme, which occurred from 2020 to 2022, before it was owned by Pfizer.
The scheme was a violation of the anti-kickback statute, which prohibits companies from offering or paying anything of value to healthcare professionals “to induce the referral of items or services covered by Medicare, Medicaid, TRICARE and other federal health care programs,” authorities said.
The statute aims to ensure that medical providers’ judgments are not compromised by improper financial incentives, according to the justice department.
The federal government will receive about $50.2 million of the settlement recovery; about $9.5 million will go to state Medicaid programs.
The whistleblower, Patrica Frattasio, a former sales representative at Biohaven, will receive about $8.4 million as her share of the federal recovery.
“Patients deserve to know that their doctor is prescribing medications based on their doctor’s medical judgment, and not as a result of financial incentives from pharmaceutical companies,” said U.S. Attorney Trini E. Ross for the Western District of New York. “This settlement reflects our commitment to hold those who violate the laws accountable, regardless of their status or prestige.”
Pfizer will pay the fine on Biohaven’s behalf.
In a statement, Pfizer noted that the settlement relates to alleged conduct at Biohaven before Pfizer’s acquisition of the company and "does not include any admission of liability or wrongdoing."
"We are pleased to put this legacy matter behind us, so that we can continue to focus on the needs of patients," a Pfizer spokesperson said.
Biohaven issued a statement Monday that said: "We are aware and note that the DOJ press release says this settlement resolved allegations without any admission of wrongdoing. Biohaven Pharmaceutical Holding Company was fully acquired by Pfizer and is a wholly owned subsidiary of Pfizer. The newly formed Biohaven Ltd. was not involved in the settlement and has no liability in this matter; therefore, we refer you to Pfizer for comment.”
The settlement comes as pharmaceutical companies see greater scrutiny of their marketing practices, as the nation faces an opioid epidemic driven by excessive prescribing of addictive painkillers.
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