Federal authorities on Thursday sued a controversial Chicago psychiatrist, accusing him of pocketing kickbacks from drug companies and committing a massive fraud as he prescribed antipsychotic medication to thousands of mentally ill patients in area nursing homes.
The lawsuit against Dr. Michael J. Reinstein represents "the largest civil case alleging prescription medication fraud against an individual ever brought in Chicago," acting U.S. Attorney Gary Shapiro said in a statement.
The allegations come three years after a joint investigation by the Chicago Tribune and ProPublica, a nonprofit investigative journalism group, found that Reinstein had provided assembly-line care using a risky antipsychotic drug.
The two-part series revealed that Reinstein's unusually heavy reliance on the drug clozapine — a potent psychotropic medication — has been linked to at least three deaths. In 2007 he made more prescriptions for clozapine than all the doctors in Texas combined, the investigation found.
Reinstein's use of clozapine is at the heart of the lawsuit filed by federal authorities in U.S. District Court in Chicago.
The authorities allege that Reinstein submitted at least 140,000 false claims to Medicare and Medicaid for antipsychotic medications he had prescribed based on the kickbacks he received from pharmaceutical companies — and not on the medical needs of his patients.
He also submitted 50,000 more claims to Medicare and Medicaid in which he falsely stated he had properly monitored the conditions of his patients at more than 30 area nursing homes and long-term care facilities, the authorities allege.
The lawsuit seeks triple damages under the False Claims Act as well as hefty civil penalties for each of the tens of thousands of alleged false claims — a total that could easily reach millions of dollars if authorities prove the allegations against Reinstein.
Federal authorities said the investigation into Reinstein's practices continues.
Reached Thursday by phone, Reinstein, 69, who has an office in Chicago's Uptown area, said he was unaware of the suit. "I can't comment on it because I haven't seen it," he said.
According to the lawsuit, Reinstein prescribed Clozaril, the trade name for clozapine, to hundreds of patients at a time years ago. The drug was made by Novartis, which for many years paid Reinstein to promote the medication, authorities said.
The Tribune-ProPublica investigation documented how clozapine posed potential serious side effects, including enlargement of the heart and increased seizure risk.
"Despite the potential side effects and clozapine's status as a drug of last resort," the suit said, "Reinstein often had more than 1,000 individual patients on Clozaril at any given time prior to August 2003."
When Novartis's patent for Clozaril expired in 1998, generic forms of clozapine became available. Yet Reinstein "resisted pharmacy and drug company efforts to switch his patients to generic clozapine and continued to be the largest prescriber of Novartis's Clozaril to Medicaid recipients in the United States," the suit said.
Then around July 2003, Novartis notified Reinstein that it would be withdrawing "support" for Clozaril, and the regular payments the firm had been making to the doctor soon ended, according to the suit.
Meanwhile, IVAX Pharmaceuticals Inc., a Florida company, reached out to Reinstein to try to get him to switch his patients to its generic version of clozapine, the suit said. Reinstein agreed, and IVAX paid him $50,000 under a one-year "consulting agreement," funded a research study by a Reinstein-affiliated entity and paid his nurse to speak on behalf of the drug, the suit alleged.
"After reaching this kickback agreement with IVAX, Reinstein immediately began switching his patients from Clozaril to IVAX's clozapine," the suit said. The doctor then became "the largest prescriber of generic clozapine in the United States."
Clozapine is not a commonly prescribed drug. But while Reinstein was allegedly soliciting kickbacks, he had more than half of his patients on it, according to the government. At one nursing home, he had prescribed the medication to 300 of its 400 residents.
The government alleged that the kickback scheme continued until 2006. IVAX renewed Reinstein's $50,000 "consulting agreement" for at least another couple of years, authorities said.
IVAX also paid for airfare, lodging, meals and entertainment expenses for Reinstein and several associates to travel to its headquarters in Miami, as well as for a fishing trip, the lawsuit alleged. In another trip to Miami, the company paid for the doctor and his associates "to go on a $800 boat cruise, a golf outing and at least two dinners costing more than $1,400 each," the government said.
According to the suit, after IVAX became a subsidiary of Teva Pharmaceutical Industries, an Israeli company, Teva paid for a trip to Miami for Reinstein and several associates. That 2006 trip included a $2,300 boat cruise.
The following year, Teva and Reinstein agreed to a new one-year $50,000 "speaker agreement," the lawsuit says.
The suit says that shortly after the Tribune-ProPublica investigation was published in 2009, Reinstein contacted Teva and asked that it stop paying him.
A Teva spokeswoman said the company has been cooperating with the government investigation.
"Clozapine is an important medicine approved for treatment of severe schizophrenia in patients who fail standard therapy," she wrote. "Although clozapine has proven to be effective for this indication, there are potential serious side effects that require careful medical supervision."Copyright © 2015, Los Angeles Times