Galena Biopharma Settles Opioid Kickback Allegations
Galena Biopharma has agreed to pay more than $7 million to settle allegations made in a whistleblower suit that the company gave kickbacks to doctors to boost prescriptions for the company's sublingual fentanyl drug Abstral.
The settlement comes after the US Attorney's Office for the District of New Jersey and the US Department of Justice opened a criminal investigation into Galena's promotion of Abstral in January, and just months after two doctors were sentenced to 20 and 21 years in federal prison for running a pill mill in Mobile, Alabama that pushed sales of Abstral and another fentanyl-based drug, Subsys.
Both Abstral and Subsys have a narrow indication for managing breakthrough pain in adult cancer patients who are already tolerant to opioid therapy, and are not labeled to be used to treat other types of pain.
Under the settlement, whistleblower Lynne Dougherty will receive more than $1.2 million of the funds recovered from the company. Galena, for its part, is not admitting liability as part of the agreement.
"Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient's medical need rather than a doctor's financial interests," said Acting Assistant Attorney General Chad Readler.
According to Galena's 2014 annual report, sales of Abstral brought the company $7.6 million in revenue in 2013, the same year that it acquired the drug from Swedish drugmaker Orexo. In 2014, those sales grew to $16.2 million.
Then, in late 2015, Galena sold the rights to Abstral and its only other commercial product, Zuplenz (ondansetron), in a move to focus on growing the company's clinical development pipeline.
According to the Department of Justice, Galena incentivized doctors to prescribe Abstral by paying them $5,000 plus expenses to attend an "advisory board" that was planned and attended by Galena sales representatives.
The Department of Justice also asserts that Galena paid $92,000 to a physician-owned pharmacy under a performance-based rebate program to boost Abstral sales and that the company paid physicians to refer patients to a registry study of Abstral that "acted as a means to induce the doctors to prescribe Abstral."