Teva And Subsidiary To Pay $27.6M In Lawsuit Settlement

Teva Pharmaceuticals Industries Ltd. U.S. and subsidiary Ivax LLC have agreed to pay $27.6 million to settle accusations of improper payment.

The Justice Department stated that Ivax allegedly made payments to a doctor in Illinois to prescribe a generic antipsychotic drug from Teva and Ivax to his patients. The Israeli generics company acquired Ivax in early 2006 for more than $7 billion.

The physician who allegedly received improper payments from Ivax, Michael J. Reinstein, also received a Miami vacation for his family and a number of employees under an illegal consulting agreement, the Justice Department said.

The physician eventually became the drug’s biggest prescriber including for elderly patients, prosecutors stated. Dr. Reinstein is currently facing a pending civil action in the Illinois federal court.

Schizophrenia is a severe form of mental illness that commonly affects people 15 to 35 years old. The disease afflicts about seven per one thousand of the adult population and is highly prevalent due to chronicity. According to the World Health Organization, schizophrenia affects about 24 million people worldwide.

Generic clozapine is an atypical antipsychotic drug indicated for treatment of patients with schizophrenia who are unresponsive to standard antipsychotic treatment. The drug is also indicated for reducing risk of recurrent suicidal behavior in patients with schizophrenia or schizoaffective disorder. Clozapine is considered as a last resort for schizophrenic patients who are resistant to standard treatment because of the risk for several serious side effects. These include seizures, inflammation of the heart, and decrease in white blood cells.

Attorney Zachary T. Fardon, U.S. attorney for the Northern District of Illinois, said “Pharmaceutical companies must not be allowed to improperly influence physicians' decisions in prescribing medication for their patients.”

A representative from Teva confirmed the multimillion dollar settlement. They also said that the company did not admit any liability in the case and that it was pleased to have brought the situation into resolution.