Galena Settles Kickback Allegations for $7.5 Million

Galena Biopharma agreed to pay more than $7.5 million to settle a whistleblower suit alleging the drugmaker violated the False Claims Act by paying doctors to prescribe its fentanyl-based drug Abstral.

The kickbacks ranged from providing free meals to doctors and their staff at one practice to payments of about $92,000 to a doctor-owned pharmacy as part of a rebate agreement that rewarded Abstral prescriptions. The company also paid doctors up to $5,000 to participate in an “advisory board” organized and attended by the company’s sales department.

The Justice Department further alleged that Galena paid doctors to refer patients to the company’s patient registry study as a way to generate more prescriptions. In a separate trial, two doctors who received compensation from the company were convicted and given prison sentences for various charges including the prescribing of Abstral.

Galena did not admit any wrongdoing, but agreed to pay more than $1.2 million to whistleblower Lynne Dougherty. The False Claims Act allows private parties to file a suit on behalf of the U.S. and to receive a portion of any settlement.