Drugmaker to pay $7.5M to settle opioid kickback allegations

A drugmaker accused of contributing to the opioid crisis by paying kickbacks to doctors to prescribe an addictive medication has settled a multi-million-dollar lawsuit, without admitting any liability.

Galena Biopharma Inc. will pay more than $7.55 million to resolve allegations under the False Claims Act that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, the Department of Justice announced Friday.

“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 in a statement.

The city of Dayton is suing more than a dozen pharmaceutical companies, distributors and pain specialists that Mayor Nan Whaley alleges caused the opioid crisis that has killed thousands of Ohioans, drained public resources and wasted taxpayer dollars.

That lawsuit is separate from one filed by Ohio Attorney General Mike DeWine, who announced in June that the state had filed a lawsuit against five pharmaceutical companies that marketed addictive prescription pain medication.

Galena is not named in either of those lawsuits and hasn’t marketed any drugs since the end of 2015.

RELATED: City of Dayton sues drug makers for role in overdose epidemic

DeWine and Whaley are both running for Ohio governor and have made battling opiate addiction a key pillar of their platforms.

To date this year, 475 people have died in Montgomery County from accidental drug overdoses, most involving fentanyl. The city’s lawsuit seeks relief for emergency services, which have been taxed by record calls for service.

On Sunday, medics had to use 13 doses of Narcan to revive a man on Huffman Avenue in Dayton — just one of about 2,000 drug-related runs in the city so far this year, on track to double last year’s total according to law enforcement.

RELATED: Ohio AG Mike DeWine sues drug companies over opiate crisis

The federal government claims Galena paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors and speakers thousands to attend an “advisory board” with Galena sales team members; and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral.

Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey called the Galena case, “egregious because it incentivized doctors to over-prescribe highly addictive opioids.”

Two of the doctors who received remuneration from Galena were criminally charged and sentenced to prison in Alabama.

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