New York files insurance fraud charges against Teva, Allergan for opioid claims

Elroy Mariano

ALBANY — New York’s top insurance regulator has filed charges against two international drugmakers it claims violated state law when they marketed opioid products as safe and medically appropriate for treating a “broad spectrum” of pain. Teva Pharmaceutical Industries, Allergan PLC and their subsidiaries “knowingly furthered” false narratives and “greatly” […]

ALBANY — New York’s top insurance regulator has filed charges against two international drugmakers it claims violated state law when they marketed opioid products as safe and medically appropriate for treating a “broad spectrum” of pain.

Teva Pharmaceutical Industries, Allergan PLC and their subsidiaries “knowingly furthered” false narratives and “greatly” downplayed the addictive nature and risks of their opioid products, a state Department of Financial Services investigation found. As a result, patients and medical providers came to view opioids as medically legitimate and necessary, it said, which helped to fuel the ongoing opioid epidemic.

Gov. Andrew M. Cuomo on Tuesday announced that the department had initiated administrative proceedings against the manufacturers, charging them with insurance fraud and seeking monetary relief. They are the third set of charges to be filed in the department’s ongoing investigation into the opioid crisis.

“New York will continue to aggressively investigate the bad actors that caused the opioid crisis — an American tragedy that has taken too many lives and caused irrevocable harm to communities in our state and across the country,” Cuomo said. “Everyone who has been affected by opioids deserves justice and we will make every effort to deliver it to them by pursuing the companies that defraud the public and holding them accountable to the fullest extent of the law.” 
 
Israel-based Teva manufactured approximately 20 percent of the opioid products that flooded New York from 2006 to 2014, the state said. Ireland-based Allergan also manufactured opioid products from 2006 to 2014, according to the state.

The Department of Financial Services claims that Teva through its subsidiary Cephalon marketed its branded fentanyl drugs for off-label use against U.S. Food and Drug Administration guidelines. The FDA approved Cephalon’s first fentanyl drug, Actiq, only for the treatment of cancer pain, the state said. Through off-label marketing, however, Actiq sales skyrocketed from $16 million in 2000 to over $590 million by 2006 — at which time only 8 percent of patients were taking the drug for cancer pain. After Actiq was retired, Cephalon continued off-label promotional practices with its new fentanyl lozenge, Fentora.
 
The department also claims that Cephalon crafted template “letters of medical necessity” for doctors to send to insurers to justify off-label use and get the prescriptions reimbursed. These letters were used by sales representatives, it said, to further entice providers into prescribing opioids for increasingly broader use. 
 
Allergan also misrepresented its drugs in marketing materials, the state claims. In 2010, the FDA sent the company a warning letter about brochures it had released for its drug Kadian. The FDA warned Allergan about the brochures’ omission and minimization of risk information, their failure to state the drug’s full indication, and unsubstantiated claims of efficacy and superiority over other opioid drugs.
 
Both Teva and Allergan used third party “front groups” and doctors called “key opinion leaders” to disseminate unbranded and misleading messaging regarding the safety and efficacy of opioids in general, the state said. This included medical education courses, pamphlets, websites and books that targeted both patients and prescribers. These materials downplayed the risks of opioid addiction, labelled legitimate concerns by prescribers over those risks as “opiophobia,” and dismissed patients’ clear signs of addiction as “pseudoaddiction,” the state said.
 
The companies are accused of violating state insurance law, which prohibits fraudulent insurance acts, and state financial services law, which bars intentional fraud or misrepresentation of a material fact with respect to a financial product or service including health insurance. Each carries a penalty of up to $5,000 per violation, and the department alleges that each fraudulent prescription constitutes a separate violation.

Teva has denied the allegations, which mirror those contained in over 2,000 lawsuits that have been filed nationwide by state and local governments seeking to hold opioid manufacturers and distributors responsible for the opioid epidemic.

“These allegations are duplicative of those of the other suits currently underway,” Kelley Dougherty, a spokesperson for Teva, said. ” Teva continues to deny the allegations and remains focused on finalizing the nationwide settlement framework with the Attorneys General that was announced last October.”

A spokesperson for Allergan did not immediately respond to a request for comment Tuesday afternoon.

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