Pfizer (NYSE:PFE) has agreed to pay $59.7 million to resolve allegations that Biohaven Pharmaceuticals, acquired by Pfizer in October 2022, defrauded Medicare and other healthcare programs by offering kickbacks to doctors prescribing its migraine drug, Nurtec ODT. The settlement was announced by the U.S. Department of Justice.
The charges stem from Biohaven's activities between March 2020 and September 2022, where the company allegedly violated the False Claims Act by incentivizing doctors with speaker honoraria and luxury meals. Some events were reportedly attended multiple times by the same doctors or by their family members and colleagues with no educational benefit.
Pfizer ended Biohaven's speaker programs shortly after its $11.5 billion acquisition. The company emphasized its focus on patient needs, stating it was "pleased to put this legacy matter behind us." Pfizer did not admit any wrongdoing in the settlement.
The case originated from a whistleblower lawsuit filed in 2021 by Patricia Frattasio, a former Biohaven sales specialist. Frattasio will receive $8.4 million of the settlement under the False Claims Act, which allows whistleblowers to sue on behalf of the government and share in recoveries.
From the settlement, $41.8 million will be allocated to the federal government, while $9.5 million will go to state Medicaid programs. U.S. Attorney Trini Ross reiterated the importance of ensuring that prescriptions are based on medical judgment, not financial incentives.
This resolution underscores the Justice Department’s commitment to tackling healthcare fraud and safeguarding the integrity of Medicare and Medicaid programs.
