(Reuters) - Galena Biopharma Inc will pay more than $7.55 million to resolve charges it paid kickbacks to doctors to induce them to prescribe its opioid-based pain medication Abstral to patients, the U.S. Department of Justice said on Friday.
The settlement with Galena comes as federal authorities try to combat an epidemic of opioid abuse, which President Donald Trump last month declared a national emergency.
Galena had been sued by a private whistleblower, Lynne Dougherty, under the federal False Claims Act, which permits individuals to sue on behalf of the government if they suspect fraud.
Dougherty will receive more than $1.2 million from the settlement with the San Ramon, California-based company.
The Justice Department said Galena paid doctors and speakers thousands of dollars each to attend an “advisory board” with company sales staff, and provided more than 85 free meals to doctors and staff from a single practice that often prescribed fentanyl-based Abstral.
In May, two doctors who prosecutors said ran a “massive pill mill” were sentenced in Alabama to a respective 21 years and 20 years in prison, after being convicted at a trial over offenses related to their prescriptions of Abstral, among other counts.
“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,” Acting Assistant Attorney General Chad Readler said in a statement.
Gary Giampetruzzi, a partner at Paul Hastings representing Galena, said in a statement: “This global, civil-only resolution represents the best possible outcome for Galena, with no exclusion from federal programs and no corporate integrity agreement obligations.”
Opioids, including prescription painkillers and heroin, played a role in more than 33,000 U.S. deaths in 2015, according to the U.S. Centers for Disease Control and Prevention.
Reporting by Jonathan Stempel in New York; Editing by David Gregorio; Editing by David Gregorio