AbbVie shares fell almost 3 percent on Tuesday after the California Department of Insurance sued the pharmaceutical company for allegedly giving health-care providers kickbacks for prescribing its arthritis drug Humira.
The suit alleges that AbbVie provided cash, trips and other gifts to health-care providers as incentives to prescribe the drug. The company allegedly also provided additional professional services, such as free insurance processing and marketing assistance.
The scheme was pulled off by a group of registered nurses known as Abbvie Nurse Ambassadors, who are sent into patients' homes after they are prescribed Humira and were trained to downplay potential risks of the drug, according to the suit.
The company "only provides the Ambassadors as long as the physicians continue to prescribe AbbVie's drug instead of selecting another course of treatment," according to the California Department of Insurance.
AbbVie spokeswoman Adelle Infante said in a statement that the allegations had no merit.
"AbbVie provides a number of support services for patients, once they are prescribed Humira, that both educate and assist patients with their therapy, including nursing support, and these resources are beneficial to patients dealing with a chronic condition," Infante said. "They in no way replace or interfere with interactions between patients and their healthcare providers."
The allegations were brought to the attention of the department by Lazaro Suarez, who was employed as an AbbVie Nurse Ambassador in Florida.
According to the lawsuit, private insurers have paid out $1.2 billion in pharmacy claims for Humira, which would make the case the largest instance of insurance fraud in the history of the California regulator.