Pharmaceutical giant Galena Biopharma agreed today in an out-of-court settlement to pay nearly $8 million in fines relating to a scheme to push Opioid drugs. Galena is currently the subject of various other lawsuits, mostly dealing with stock-market violations during the time in question.
Galena formerly marketed a drug called Abstral, which is composed of the Opioid derivative, Fentanyl. Fentanyl is one of the most dangerous Opioids when 'misused'. It is highly addictive and even slight overdoses can be fatal. Fentanyl was even banned in China earlier this year, after their Ministry of Health determined that the drug's potential side-effects outweighed its medicinal benefits.
Federal prosecutors allege that Galena paid a variety of bribes and kickbacks to corrupt physicians to induce them to prescribe Abstral. These included paying 'speaking fees' and paid-vacations to Galena-hosted events; free meals to doctors and staff based on the numbers of prescriptions they wrote; and paying doctors to refer patients to Galena's customer-database. In one case, Galena paid $92,000 in 'rebates' to a physician-owned clinic to induce prescriptions.
In May, two physicians were sentenced to over 20 years in prison for their part in this same scandal. The two operated a pill-mill and even bought $1.6 million in Galena stocks. According to FDA guidelines, Abstral prescriptions are limited to "breakthrough cancer pain in opioid-tolerant adults." These two worthies, however, prescribed it for joint, neck, and back pain, according to the indictment. Even the Obama Administration once investigated them because---for three straight fiscal quarters---they had the first and second highest number of Fentanyl prescriptions in the US. According a shareholders' suit filed against Galena, 9 of every 10 prescriptions from these doctors were for Fentanyl-based drugs.
How many unsuspecting patients became opioid-addicts because of these activities? No one knows for certain. The fines that Galena paid today are only related to their violations of the Medicare False Claims Act. If it were up to us, these kinds of companies would be liquidated and, after their outstanding debts were satisfied, any money left over would go into drug-rehabilitation clinics. Galena has not officially admitted to guilt in any of these proceedings.
This is the kind of corruption that has to be stamped out. Thankfully, the new Administration is committed to draining swamps of these kind. And an honorable mention needs to go to whistleblower Lynne Dougherty of California who exposed the scheme, and won over $1 million as part of the settlement.