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Drug Company Agrees to Pay $27.6 Million to Settle Allegations Involving Chicago Psychiatrist

Teva Pharmaceutical Industries Ltd. was accused of paying Michael Reinstein, a psychiatrist who has figured into two ProPublica investigations, to overprescribe a risky antipsychotic.

Teva Pharmaceutical Industries Ltd. has agreed to pay more than $27.6 million to settle state and federal allegations that it induced Chicago psychiatrist Michael Reinstein to overprescribe clozapine, a powerful antipsychotic drug.

Reinstein has twice figured into ProPublica investigations.

Four years ago, ProPublica and the Chicago Tribune spotlighted Reinstein's prescribing pattern, findingthat in 2007 he had prescribed more clozapine to patients in Medicaid's Illinois program than all of the doctors in the Medicaid programs of Texas, Florida and North Carolina combined. At least three of Reinstein's patients died of clozapine intoxication. At that time, Reinstein defended his prescription record, arguing that clozapine is effective and underprescribed.

Then, last spring, ProPublica reported that Reinstein prescribed even more of the drug in Medicare's prescription drug program for seniors and the disabled. ProPublica cited Reinstein in an investigation about how Medicare fails to monitor problem prescribers, finding that the program continued to let him prescribe even after federal prosecutors accused him of fraud and Illinois' Medicaid program suspended payments to him.

Generic clozapine, an anti-schizophrenia drug manufactured by Teva, is approved to treat cases that don't respond to other medications. But clozapine can have dangerous side effects, including seizures, inflammation of the heart muscle and a drop in white blood cells. The drug is considered to be particularly dangerous for elderly patients.

Illinois Attorney General Lisa Madigan and the U.S. Justice Department claimed that IVAX, a Teva Pharmaceuticals subsidiary, paid Reinstein to overprescribe clozapine to Medicare and Medicaid patients. Yesterday Teva agreed to pay almost $15.5 million to the federal government and more than $12.1 million to Illinois to settle those allegationsout of court. Teva spokeswoman Denise Bradley told Reuters that the settlement does not mean that the company has admitted any liability.

"Pharmaceutical companies must not be allowed to improperly influence physicians' decisions in prescribing medication for their patients," Zachary T. Fardon, U.S. Attorney for the Northern District of Illinois, said in a statement on Tuesday. "Instead, those decisions must be made solely on the basis of the patient's best medical interests."

In November 2012, federal prosecutors also filed suit against Reinstein, alleging that IVAX hadpaid him $50,000 a year to work as a consultant, paid his nurse to promote the drug and funded a study at an affiliated research institute. After the payments, Reinstein began overprescribing clozapine. The company also allegedly paid for trips and entertainment for Reinstein and his friends.

The suit against Reinstein is still pending. Reinstein's attorney did not immediately respond to request for comment.

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