CORPORATE CRIME REPORTER
to Pay More than $4 Million to Settle False Claims Act Charges
22 Corporate Crime Reporter 13, March 27, 2008
Otsuka American Pharmaceutical Inc., the U.S. subsidiary of Japanese pharmaceutical manufacturer Otsuka Pharmaceutical Co., Ltd., will pay more than $4 million to resolve allegations that it marketed Abilify, an atypical antipsychotic drug, for "off-label" uses.
Otsuka developed Abilify in Japan and then entered into an agreement with Bristol-Myers Squibb (BMS) to co-promote sales of the drug in the United States.
Under the agreement, Otsuka sales representatives worked on sales teams led primarily by BMS sales managers.
In September 2007, BMS and the government entered into an agreement resolving allegations that BMS had promoted Abilify for off-label uses.
The Food and Drug Administration (FDA) has approved Abilify to treat adult schizophrenia and bi-polar disorder but has not determined the drug to be safe and effective in the treatment of children and adolescents or in the treatment of geriatric patients suffering from dementia-related psychosis.
The FDA has mandated that the package for Abilify carry a "black box" warning concerning its use in the treatment of dementia-related psychosis.
The settlement resolves federal allegations that, from 2002 through the end of 2005, Otsuka knowingly promoted the sale and use of Abilify for pediatric use and to treat dementia-related psychosis.
Otsuka is alleged to have participated in directing its sales force to call on child psychiatrists and other pediatric specialists, with the sales force then urging those physicians and others providers to prescribe Abilify for pediatric patients.
Otsuka sales representatives also participated in a specialized long term care sales force that called almost exclusively on nursing homes, where dementia-related psychosis is far more prevalent than schizophrenia or bipolar disorder.
Because of the potential market benefit, the long term care sales force promoted Abilify off-label for the treatment of dementia-related psychosis.
The federal recovery is approximately $2.3 million.
Otsuka also will pay approximately $1.7 million to the Medicaid programs in the participating states.
The settlement resolves the remainder of the allegations made in a False Claims Act qui tam action entitled United States ex rel. Piacentile v. Bristol-Myers Squibb Co. and Otsuka Pharmaceutical Co., Ltd., Civil Action No. 05-10196-MLW (D. Mass.).
The Department of Justice settled claims based on the same allegations with BMS in September 2007.
whistleblower, Joseph Piacentile, a physician, will receive a total of approximately
$348,000 as his share of the federal recovery amount from the settlement, and
an additional share of the state settlement amount.
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