Biohaven Pharmaceuticals Settles False Claims Act Violations Lawsuit for $59.7 Million

Relator worked as the Neuroscience Sales Specialist (NSS) for Biohaven in the Rochester, NY sales territory from November 2019 to February 2021.

Biohaven Pharmaceuticals, Inc. is a wholly owned subsidiary of Biohaven Pharmaceuticals Holding Company, Ltd., based in the British Virgin Islands. The company, referred to as “Biohaven” or “Defendant,” describes itself as a clinical-stage biopharmaceutical company focused on developing innovative, late-stage products for treating central nervous system diseases, including neurological and rare disorders. Biohaven developed and marketed Nurtec ODT and in October 2022, Pfizer acquired Biohaven.

The Relator, based on personal knowledge and further investigation, identified evidence suggesting that Defendant violated the FCA, state false claims acts, and relevant regulatory guidelines. Specifically, Biohaven submitted fraudulent claims to the Government or caused others to do so, by engaging in off-label marketing and other prohibited practices.

From March 1, 2020, to September 30, 2022, Biohaven allegedly provided improper payments to healthcare professionals, including speaker honoraria and upscale meals. These payments encouraged prescriptions of the migraine medication Nurtec ODT, violating the anti-kickback statute.

The United States claimed that Biohaven selected certain healthcare providers for its Nurtec speaker bureau and offered paid speaking opportunities. The purpose was to use speaker honoraria and meals as inducements for these providers to prescribe Nurtec ODT.

The Government further alleged that some prescribers who attended multiple programs on the same topic gained no educational value from repeated sessions. It also stated that certain Biohaven speaker programs were attended by individuals without an educational need to be there, including the speakers’ spouses, family members, friends, or colleagues from the speakers’ own practices.

This alleged conduct continued until October 2022, when Pfizer acquired Biohaven and ended the Nurtec speaker programs.

Damages

This lawsuit aimed to recover treble damages and civil penalties for the United States and the Plaintiff States under the laws applicable in the individual states. The United States sought to recover damages three times the amount it suffered due to the false claims outlined in the Complaint, as permitted by the Federal False Claims Act, 31 U.S.C. § 3729 et seq.

Additionally, the United States requested civil penalties of $21,730 for each false claim that the Defendant caused to be presented to the United States or its grantees. This also applied to each false record or statement made, used, or caused by the Defendant that was material to a fraudulent claim.

The United States further requested an award of attorney’s fees, costs, and expenses that Relator incurred while pursuing the case.

Moreover, the United States sought the maximum amount allowed for Relator under the False Claims Act.

Lastly, the United States asked the Court to order any other relief deemed appropriate.

Key Arguments and Proceedings

Legal Representation

• Plaintiff(s): United States of America | California | Colorado | Connecticut | Delaware | Florida | Georgia | Hawaii | Illinois | Indiana | Iowa | Louisiana | Maryland | Michigan | Minnesota | Montana | Nevada | New Jersey | New Mexico | New York | North Carolina | Oklahoma | Rhode Island | Tennessee | Texas | Vermont | Washington | Commonwealth of Massachusetts | Virginia | District of Columbia | policyholders of XYZ Nos. 1-10 Insurance Companies
  • Counsel for Plaintiff(s): Christopher L. Nelson | David M. Coriell | John J. Gross | Ross M. Wolfe

• Defendant(s): Biohaven Pharmaceutical, Inc. | Biohaven Pharmaceutical Holding Company, Ltd.
  • Counsel for Defendant(s): Andrew O’ Connor

Claims

The Government alleged violations of the False Claims Act and the Anti-Kickback statutes. The Defendant allegedly submitted fraudulent bills to the Government using improper financial incentives, including speaker payments, kickbacks, software support, and copay cards. These arrangements violate the Anti-Kickback Statute, as they offer financial benefits in exchange for business referrals that result in reimbursement from federal and state healthcare programs.

Defense

Biohaven denied the allegations, but the company agreed to a settlement to resolve the claims without admitting liability.

Settlement

The United States, Relator Patricia Frattasio, and Biohaven Pharmaceutical Holding Company Ltd. reached a settlement to resolve claims under the False Claims Act (FCA), 31 U.S.C. § 3729 et seq on January 24, 2025.

The parties executed the settlement agreement on January 16, 2025. In accordance with 31 U.S.C. §§ 3730(b)(2) and (4), the United States has notified the court to formalize and implement the terms of the resolution. Additionally, several states have independently entered into separate settlement agreements to resolve related claims under their respective state false claims laws.

Biohaven agreed to pay $59.7 million, including restitution, to the United States and participating Medicaid states. Biohaven also agreed to pay a share of the settlement to Frattasio.  In successful qui tam cases, whistleblowers are eligible to receive between 15 and 30% of the settlement or judgment. Frattasio is set to receive approximately $8.4 million. The agreement includes provisions related to the reimbursement of unallowable costs and ensures the United States retains the right to audit Biohaven’s records.

The parties further agreed that the United States would file a joint notice of dismissal in the lawsuit upon payment, with the dismissal being with prejudice regarding the Covered Conduct. Both parties also agreed to bear their own legal costs.

This settlement resolves the civil claims arising from Biohaven’s conduct but does not release the United States’ rights to pursue other claims or criminal liability. Biohaven waived any claims for healthcare billings covered by the settlement.