On January 24, the U.S. Department of Justice (DOJ) announced that Pfizer agreed to pay $59.7 million on behalf of its wholly-owned subsidiary Biohaven Pharmaceutical Holding Company Ltd. to settle allegations that Biohaven violated the False Claims Act through illegal kickback payments. The settlement resolves allegations brought forward by a whistleblower in a qui tam lawsuit.
According to the government, Biohaven “paid improper remuneration, including in the form of speaker honoraria and meals at high end restaurants, to health care professionals to induce them to prescribe the migraine medication Nurtec ODT in violation of the anti-kickback statute.”
“Biohaven selected certain health care providers to be part of the Nurtec speaker bureau and provided them paid speaking opportunities with the intent that the speaker honoraria and meals would induce them to prescribe Nurtec ODT,” the DOJ alleges.
“Through this settlement and others, the government has demonstrated its commitment to ensuring that drug companies do not use kickbacks to influence physician prescribing,” said Acting Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The department will use every tool at its disposal to prevent pharmaceutical manufacturers from undermining the objectivity of treatment decisions by health care providers.”
The allegations were brought forward in a qui tam lawsuit filed by Patrica Frattasio, a former sales representative at Biohaven. Under the False Claims Act’s qui tam provisions, individuals may file lawsuits alleging government contracting fraud on behalf of the United States. In successful qui tam cases, whistleblowers are eligible to receive between 15 and 30% of the settlement or judgment. Frattasio is set to receive approximately $8.4 million.
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
However, in September 2024, a district judge in Florida ruled that the False Claims Act’s qui tam provisions were unconstitutional. The U.S. federal government is urging the U.S. Court of Appeals for the Eleventh Circuit to reverse that decision, stating in a brief that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.”
Whistleblower advocates have warned of dire consequences should the district court ruling stand and have also outlined why it is inconsistent with prior case precedent and misinterprets the qui tam provisions.
The claims asserted in this case are allegations only, and there has been no determination of liability.
