Psychiatrist Michael Reinstein pleads guilty in $600,000 clozapine kickback case

Doctor allegedly prescribed the dangerous drug to thousands of elderly and indigent mentally ill patients in at least 30 area nursing homes and other facilities.

A long-time Chicago psychiatrist faces more than a year in prison after pleading guilty to receiving  $600,000 in kickbacks from pharmaceutical companies in exchange for regularly prescribing the anti-psychotic drug clozapine to his patients, according to the U.S. Attorney’s Office in the Northern District of Illinois.

Dr. Michael J. Reinstein, 71, of Stokie, Illinois, pleaded guilty to criminal conduct in a plea agreement that  recommends a sentence of 18 and a half months in prison, according to the statement from the U.S. Attorney’s Office.

In a parallel civil lawsuit settlement, Reinstein has agreed to pay the United States and the State of Illinois $3.79 million for prescribing the clozapine in exchange for kickbacks, according to the release. 

Reinstein is to pay $1.8 million to the United States and $1.9 million to the State of Illinois.

Reinstein violated the federal and state False Claims Acts by causing the submission of at least 140,000 prescription drug claims to the Medicare and Medicaid programs for clozapine prescriptions generated by kickbacks paid by Teva Pharmaceuticals USA, Inc., and IVAX Pharmaceuticals LLC, according to the civil lawsuit.

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The civil settlement is neither an admission of liability by Reinstein nor a concession by the United States or the State of Illinois that their claims were not well-founded, according to the statement.

In March 2014, Teva and IVAX paid the United States and the State of Illinois $27.6 million to settle allegations they violated state and federal False Claims Acts by making payments to Reinstein in return for his prescriptions of clozapine to patients, according to authorities.

The civil lawsuit alleges that between 2003 and 2011, Reinstein solicited and accepted the kickbacks for prescribing clozapine to thousands of elderly and indigent mentally ill patients in at least 30 area nursing homes and other facilities.

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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. While clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, 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.

Autopsy and court records show that at least three patients under Reinstein's care died of clozapine intoxication, according to an independent investigation by ProPublica. At that time, Reinstein defended his prescription record, arguing that clozapine is effective and under-prescribed.

However authorities claimed Reinstein did not engage in meaningful pharmacological management because his prescribing decisions for clozapine patients were based on the kickbacks he received rather than his independent medical judgment or the individual needs of his patients.

Reinstein has been practicing as a psychiatrist in the Chicago area since 1973, with an office in Chicago’s Uptown neighborhood since at least 1999, authorities said.

His medical license has been suspended.

Up until 2003, the manufacturer of Clozaril paid Reinstein thousands of dollars annually for speaking engagements to promote the drug, federal authorities said. In 2003, after the manufacturer of Clozaril stopped paying Reinstein for speaking engagements, Ivax paid him $50,000 per year as a consultant and Reinstein switched his patients to generic clozapine, authorities said.

Teva continued paying Reinstein consulting and speaker fees related to clozapine after acquiring IVAX in January 2006, they said.

Further, employees of Teva and IVAX caused the pharmaceutical companies to pay an estimated $30,000 in entertainment expenses for Reinstein and his associates, including expensive meals, tickets to sporting events, and all-expense-paid trips to Miami, according to authorities.

IVAX and Teva also made payments to a research company affiliated with Reinstein totaling approximately $61,000, according to authorities. The research company made monthly payments to Reinstein for rent and medical director fees, they said.

For years, as he was under federal investigation, Reinstein has been the subject of two ProPublica investigations.

In 2009, ProPublica and the Chicago Tribune reported that in one year, Reinstein prescribed more clozapine to patients in Medicaid's Illinois program than all doctors in the Medicaid programs of Texas, Florida and North Carolina combined. Reinstein's prescribing of clozapine appears to have declined after the articles were published, according to ProPublica.