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DOJ Achieves Big-Dollar Settlements Against Big Pharma for Drug Marketing Violations

The Department of Justice is on a rampage against big pharma, cracking down on illegal marketing practices through False Claims Act litigation. Emboldened by recent blockbuster settlements, including two in the $600 million range, DOJ is going after pharmaceutical companies for, among other offenses, improperly promoting their products to high-volume prescribers in order to bolster sales.

Novartis: False Claims and Anti-Kickback settlement

Novartis Pharmaceuticals agreed to pay $678 million to settle allegations that it violated the False Claims Act and Anti-Kickback Statute by providing doctors with cash payments and lavish outings and meals to induce them to prescribe Novartis cardiovascular and diabetes drugs, which are covered by Medicare and Medicaid. The False Claims Act, which dates to the Civil War, prohibits fraud against these health care programs and other government programs. The Anti-Kickback Statute, which forbids the exchange of kickbacks for referrals in government health care programs, was passed in 1972 to ensure Medicare and Medicaid patients receive medical treatment and referrals that are in their best interests, and not for the benefit of the referring party.

The government alleged that between 2002 and 2011, “Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs,” Acting U.S. Attorney Audrey Strauss of the Southern District of New York said in a statement. “Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increases drug costs for everyone.”

Novartis sales representatives, as directed by their managers, selected high-volume prescribers to serve as the paid “speakers” at these events and then pressured the speakers to increase their Novartis prescriptions, often dropping them from the program if they failed to do so, DOJ alleged.

As part of the settlement, Novartis admitted responsibility for some of the allegations, including that some of its sales reps intended for the honoraria paid to doctors to induce the doctors to prescribe more Novartis drugs, and that many high-prescribing doctors were paid tens or hundreds of thousands of dollars. For instance Novartis shelled out more than $320,000 to a doctor who wrote over 8,000 prescriptions for the drugs in question and more than $220,000 to a doctor who wrote in excess of 9,000 prescriptions.

Indivior: Civil and criminal case involving opioids

Indivior Plc and Indivior Inc. agreed to pay $600 million and subsidiary Indivior Solutions Inc. pled guilty to a felony charge to settle civil and criminal liability related to the marketing of Suboxone, a drug containing buprenorphine, which is used to treat opioid addiction. The government alleged Indivior deceived doctors and health care benefit programs into believing the film version of Suboxone, which is dissolved under the tongue, was safer and less susceptible to abuse than similar drugs. The government also alleged that Indivior purposely connected opioid addicts to doctors that the company knew were prescribing buprenorphine-containing drugs at high rates and in questionable circumstances. One way that Indivior allegedly encouraged these physicians to prescribe Suboxone Film was by including them in its internet and telephone referral program. Billed as a concierge service for patients, the program included a “Locate a Doctor” tool and a “Here to Help” hotline, from which calls could be transferred to the physicians’ offices for appointment booking.

Though Indivior Solutions pled guilty to providing misleading safety information about Suboxone Film to the Medicaid program in Massachusetts, the company admitted no wrongdoing in connection to the civil settlement, which resolved claims involving Indivior activity from 2010 to 2015 in six lawsuits pending in federal courts in the Western District of Virginia and the District of New Jersey originally brought by whistleblowers, who will receive a share in the settlement under the False Claims Act’s qui tam provision.

“Addressing the opioid crisis is a top priority for OIG [Office of the Inspector General], and we will continue to work closely with DOJ to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” Gregory E. Demske, chief counsel to the Inspector General of the U.S. Department of Health and Human Services, said in a statement.

DUSA Pharmaceuticals agrees to pay $20.75M

In late August, DUSA Pharmaceuticals, a division of Sun Pharmaceutical Industries Inc., agreed to pay $20.75 million to resolve allegations regarding its Levulan-Kerastick, a prescription topical solution approved by the FDA to treat actinic keratosis (AKs), scaly lesions that develop from prolonged overexposure to the sun, on the face and scalp. FDA-approved instructions call for a two-part treatment process, in which the lesions are treated with a blue light 14 to 18 hours after the cream is applied. In an effort to increase sales, DUSA from 2014 to 2016 promoted a shorter application period of just one to three hours to physicians through paid physician speaking programs and paid physician peer-to-peer programs, and did not inform physicians that the shorter period was less effective, the government alleges. In addition to the shorter period being an easier sell to doctors and patients, the misinformation may have caused patients to use the drug multiple times to achieve success.

“We will hold drug manufacturers accountable when they knowingly promote ineffective uses of their products that undermine patient care or waste program funds,” Acting Assistant Attorney General Ethan P. Davis for the Justice’s Department’s Civil Division said in a statement.

DOJ and its partner agencies will continue to hold pharmaceutical companies accountable when they step over the line and defraud taxpayer-funded health care programs, said Department of Health and Human Services-Office of the Inspector General Special Agent Scott J. Lampert in a statement in connection to the Novartis settlement.

“Greed must never play a part in patient care,” he added.

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