Shrink Took Kickbacks to Peddle Potent Drug

A longtime psychiatrist in the Chicago area quickly became one of the largest prescribers of generic clozapine in the country after obtaining a consulting agreement worth $50,000 per year, plus other compensation, from the manufacturer of the drug.

Clozapine is a rarely prescribed anti-psychotic drug that has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients. Clozapine has been effective in some forms of schizophrenia, but it is also known to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflammation of the heart muscle, and increased mortality in elderly patients.

Dr. Michael J. Reinstein, 71, of Skokie, Illinois, admitted in a guilty plea that until 2003, he prescribed Clozaril, the brand name version of the clozapine molecule, even though less expensive, generic versions of the drug were available after 1997, because the manufacturer of Clozaril paid Reinstein thousands of dollars annually for speaking engagements to promote the drug.

Switched to the generic

After the patent for Clozaril expired, Reinstein resisted pharmacy and drug company efforts to switch his patients to generic clozapine and he continued to be the largest prescriber of Clozaril to Medicaid recipients in the United States. In July 2003, the manufacturer of Clozaril stopped paying Reinstein for speaking engagements. He then agreed to switch his patients to Ivax’s generic clozapine after Ivax agreed to pay him $50,000 per year under a consulting agreement and to fund a clozapine research study by a Reinstein-affiliated entity.

Ivax renewed its annual consulting agreement with Reinstein and Teva continued paying Reinstein consulting and speaker fees related to clozapine after acquiring Ivax in January 2006. Teva and Ivax employees renewed consulting and speaking agreements with Reinstein for $50,000 each year between 2004 and 2007, $40,000 for 2008, and $24,000 for 2009. Between 2004 and 2009, Teva and Ivax paid Reinstein a total of approximately $234,000 for consulting and speaking related to clozapine.

Paid speaking engagements

Between 2004 and 2009, the manufacturer of an orally disintegrating form of the clozapine molecule also paid Reinstein for speaking engagements, totaling approximately $135,000, plus other payments for studies. In part because of these payments, between January 2005 and March 2006, Reinstein switched more than half his patients from generic clozapine to the orally disintegrating clozapine.

Reinstein pleaded guilty to receiving illegal kickbacks and benefits totaling nearly $600,000 from pharmaceutical companies in exchange for regularly prescribing medication to his patients. He also agreed to pay the United States and the State of Illinois $3.79 million to settle a parallel civil lawsuit alleging that, by prescribing clozapine in exchange for kickbacks, Reinstein caused the submission of at least 140,000 false claims to Medicare and Medicaid.

His cooperation plea agreement calls for the government to recommend a sentence of 18.5 months in prison.

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