Tuesday, March 29, 2016

Chicago Psychiatrist Who Received Consulting Fees (Now Called Kickbacks) While Prescribing Clozaril to Patients Sentenced to Nine Months in Federal Prison After Qui Tam Lawsuit Settlement

The consulting arrangements between physicians and pharmaceutical companies are being used to support federal qui tam and criminal cases. One case involving a psychiatrist that went criminal after a civil qui tam settlement had some extreme facts but shows how the government is being aggressive in pursuing these arrangements years after they occurred.

While the pharmaceutical companies will be ordered to pay multimillion fines, the government will pursue fines and criminal charges against individual physicians. Big Pharma just pays the fines and doctors who assume that the companies must be following the law will suffer the consequences.
A Chicago psychiatrist, Dr. Michael J. Reinstein (age 72), was sentenced on March 9, 2016 to nine months in federal prison for accepting nearly $600,000 in fees and benefits from pharmaceutical companies Teva and IVAX in exchange for prescribing Clozapine to his patients from 2006 to 2011. This was after he pleaded guilty last year to one count of violating the federal Medicare and Medicaid Anti-Kickback Statute for these facts.  

Dr. Reinstein has been a psychiatrist in the Chicago area since 1973, with an office in Chicago’s Uptown neighborhood.  The basis for the guilty plea and sentence was stipulated by the defense in the plea agreement that Dr. Reinstein prescribed the drug Clozaril (the brand-name version of Clozapine) to thousands of elderly and indigent patients in Chicago-area nursing homes and hospitals long after less expensive, generic versions were available, because the manufacturer of Clozaril paid him thousands of dollars to promote the drug at speaking engagements. 

In exchange for his efforts, the pharmaceutical companies provided Dr. Reinstein with consulting fees and entertainment expenses, including meals, tickets to sporting events, and all-expense-paid vacations.  At one point in the early 2000s, Dr. Reinstein was the largest prescriber of the drug to Medicaid recipients in the United States. In these type of cases, it never pays to be #1. 

After the deal with the brand-name manufacturer ended in 2003, Dr. Reinstein agreed to switch his patients to the generic version, but only after its manufacturers, Teva Pharmaceuticals USA Inc. and IVAX Pharmaceuticals LLC, agreed to pay him a consulting fee and finance a Clozapine research study performed by a Reinstein-affiliated entity.  

One of the facts that made this case go criminal was evidence that at Dr. Reinstein’s request, Teva also agreed to hire an individual whom Dr. Reinstein described as an important source of patient referrals.  Between July 2006 and July 2011, Teva paid the individual approximately $112,000 to enter white blood cell data into a national Clozapine registry while he was referring patients to Dr. Reinstein.

Dr. Reinstein previously agreed to pay the United States and the State of Illinois $3.79 million to settle a civil lawsuit.  Teva and IVAX also paid the United States and the State of Illinois $27.6 million to settle civil allegations that they violated state and federal False Claims Acts.

In addition to the nine-month sentence, U.S. District Judge Sharon Johnson Coleman also imposed forfeiture of $592,000, and ordered Dr. Reinstein to perform 120 hours of community service.

The government also did their best to portray that Dr. Reinstein was potentially endangering elderly patients in that Clozapine is an anti-psychotic medication with potentially serious side effects, particularly for elderly patients.  While Clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause a potentially deadly decrease in white blood cells, as well as seizures and inflammation of the heart muscle. Whether or not this medication was appropriate for these patients, the government sought to show that it was not medically necessary for all of the patients and that in some cases the benefits did not outweigh the risks.

Lesson of the day: Even when marketing, consulting and referral arrangements are offered by businesses or corporations that are large or even public companies, it does not make them legal. Obtain your own legal advice and be conservative unless you are willing to take the risks that years later, there can be a qui tam or even a criminal case. 

Posted by Tracy Green, Esq.


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