Thomas Breen file photo
Outside Biohaven's 215 Church office.
Pharma giant Pfizer has agreed to pay $59 million to settle a federal lawsuit accusing a local biopharmaceutical company of paying “kickbacks” to healthcare providers to induce them to prescribe its migraine-fighting drug to Medicaid patients.
State Attorney General William Tong announced that settlement in a Tuesday afternoon press release.
The $59,746,277 settlement resolves a federal court case that Connecticut and 37 other states and Puerto Rico had joined against Biohaven Pharmaceutical Holding Company Ltd., a Pfizer-owned local drugmaker that has spent millions of dollars in recent years buying up three adjacent commercial buildings on Church Street.
According to the settlement agreement, which was filed in the U.S. District Court for the Western District of New York on Jan. 29, federal prosecutors accused Biohaven of paying healthcare providers “honoraria” to present to other healthcare providers about Biohaven’s migraine-treating drug, Nurtec, at speaker programs that took place at a variety of venues — including “high-end restaurants” — between March 2020 and September 2022.
“The United States contends that Biohaven selected certain providers to be part of the Nurtec ODT speaker bureau and/or provided paid speaking opportunities to providers with the intent that the speaker honoraria would induce these providers to prescribe Nurtec ODT,” the settlement document states. According to Tong’s press release, these Nurtec-prescription-inducing payments then led to Biohaven filing false claims to Medicaid and other federal healthcare programs. BioHaven paid providers between tens of thousands of dollars to in some cases more than $100,000, according to the government.
The feds also argued that these speaker programs were attended by individuals “with no educational need to attend, such as the speaker’s spouse or family members, friends, and colleagues from the speaker’s own practice. The United States further contends that certain providers who attended multiple programs on the same topic, and received expensive meals and drinks paid for by Biohaven, received no educational benefit from attending these programs; rather, Biohaven intended the purchase of meals and drinks to induce these providers to prescribe Nurtec ODT.”
As a result, the feds alleged, “certain of Biohaven’s speaker programs resulted in Biohaven providing remunerations to providers with the intent of causing providers to prescribe Nurtec ODT, which caused false claims to be submitted to Medicare, Medicaid, TRICARE, and VA.”
Biohaven denied all of these allegations. A representative from Biohaven did not respond to a request for comment by the publication time of this article.
“Biohaven paid illegal kickbacks in the form of lucrative speaker fees to unlawfully induce doctors to prescribe their drug,” Tong is quoted as saying in Tuesday’s press release. “I want to thank the whistleblower from bringing these serious allegations forward, and our state and federal partners for this strong action to protect our public healthcare dollars.”
In a separate press release, U.S. Attorney Trini E. Ross for the Western District of New York is quoted as saying, “Patients deserve to know that their doctor is prescribing medications based on their doctor’s medical judgment, and not as a result of financial incentives from pharmaceutical companies.”
Connecticut will receive $64,233 in restitution and other recoveries per this settlement, according to Tong.
Biohaven’s website lists its corporate address as in the British Virgin Islands, and its U.S. address as 215 Church St. in New Haven. The settlement states that Biohaven is a corporation “that was headquartered in New Haven, CT.” In October 2022, Biohaven “became a wholly-owned subsidiary of Pfizer Inc.”
This isn’t the first time in recent months that a biopharma company at the forefront of the city’s biotech boom has shelled out tens of millions of dollars on expenses other than drug research and development. Last year, Arvinas agreed to pay $41.5 million to nix a 10-year lease at 101 College St. and stay put in Science Park.