In an unusual move, the California Insurance Commissioner has intervened, or joined, a whistleblower lawsuit that was filed in 2007 by three former Bristol-Myers Squibb employees, who charged the drugmaker with bribing doctors to prescribe its meds - Abilify, Avapro, Glucophage, Plavix, BuSpar, Pravachol and others. In all, private insurers in the state paid more than $3.5 billion to cover the drugs.
"This sort of fraud has long plagued our health insurance system, leading to billions of dollars annually in added health care costs nationally," Insurance Commissioner Dave Jones says in a statement. "Besides the obvious and deplorable ethical violations in such cases, health care fraud also leads to higher premiums for consumers and an unnecessary and unjust increase in health care costs."
The lawsuit was initially filed by former BMS employees - Michael Wilson, who was a sales rep; Lucius Allen, who was a cardiovascular metabolic risk specialist; and Eve Allen, who was an integrated health manager. They alleged the drugmaker instructed its reps to woo docs with expensive meals; theater and concert tickets; honoraria; liquor; gift cards; golf outings; all-expense-paid trips to resorts and samba dances (for Hispanic physicians) to induce them to prescribe more meds. One popular freebie: suites at the Staples Center to watch Los Angeles Laker basketball games, food included.
Another goodie was access to some of the Lakers players, who participated in "Lakers Dream Camps" created by Bristol-Myers for high-prescribing docs and their families, according to the lawsuit. Among the players: Larry Drew, Byron Scott, Kurt Rambis, Jamal Wilkes and Reggie Theus, each of whom was paid $2,000. The drugmaker handed out 155 purple basketball jerseys emblazoned with 'Pravachol,' and more than 100 people attended. Oh yes, there were also autographed basketballs and photos taken with the players (here is the lawsuit).
We should also note that pharmacies were allegedly bribed, as well, so that prescriptions for Bristol-Myers drugs, and not generics, were filled.
pic thx to katerha on flickr
11 Comments
Hi Ed,
I find it interesting that Lucius Allen is also Director of pharmaceutical co Emmaus Medical Inc, in Torrance, CA
Old news but new spin on these allegations, perhaps Ca will prevail in getting some of their money back. Good luck to them all.
This is all old news, its pre-Pharma guidelines. What's done is done. Sure, there is $ to be had but its not going to teach anyone a lesson. Focus should be spent on activities of these companies post-guideline implementation. If you are a pharma company, and you are doing this type of behavior today, then you deserve to be front page news.
Actually I'd rather have Patrick Ewing as my main man:
http://query.nytimes.com/gst/fullpage.html?res=9900E5D6113AF937A15754C0A9679C8B63
I basically agree that it's old news unless the alegations are true that the conduct continued through 2011, that would be pretty shocking in light of the Pharma Guidelines and the many settlements that BMS was forced into -- it's Deferred Prosecution Agreement for channel-stuffing and its Corporate Integrity Agreement for off-label promotion of Abilify and kickbacks.
It is disappointing however that this relatively insignificant conduct continues to warrant so much governmental and media attention when the far more impactful conduct goes undetected and undeterred.
I don't care too much if doctors get wined and dined. It looks terrible for sure, but it does not offend me given how prevalent such practices are in virtually every other business. Could it sway some doctors? Perhaps. But what's more likely to sway a doctor in his or her prescribing: the fact that he got to go to a Lakers Game or the fact that he made $350,000 in speaking, consulting and clinical trial fees? Inside those activities is where the real risks are, where doctors and science itself can be deeply corrupted.
So box seats don't concern me.
The fact that thousands of doctors serve as "Speakers" for big brands and can make hundreds of thousands of dollars in "Speaker Fees" coming to dinners to go through some canned speaker slides does concern me.
The fact that doctors get paid thousands of dollars to attend all sorts of advisory board meetings where marketing folks walk through off-label data concerns me.
The fact that pharma companies support research projects from important "Opinion Leaders" that are often repetitive and lack real scientific merit while they reject other more scientifically important research projects concerns me.
The fact that pharma companies routinely have articles written for doctors concerns me.
Unfortunately, these other areas are complex and sticky. The companies have all sorts of processes designed to make these programs appear legitimate. It's easier for the government to go after "box seats".
I guess the case will be fun to watch, but I don't see it having any impact on the industry and the integrity of science or clinical practice.
This is just another case of a government agency going after money. Years and years of these cases have demonstrated that they have no impact.
Hi Folks
Thanks for the comments. I would like to underscore just one point, which is that, as the opening sentence indicates, the charges in the lawsuit may go back a few years, but the decision by the state insurance commissioner is not only new, but noteworthy. Intervention in whistleblower lawsuits usually is undertaken by the US Department of Justice and, even then, that does not happen in most such cases.
And so while the underlying allegations may appear to be old news, the process by which this is playing out appears to be taking a different form than in the past. Whether there will be any impact, beyond recent attempts to change business practices, remains to be seen, of course. As for a money grab by a government agency, that is up for debate. The feds have, as noted previously, have made a point more than once of noting how whistleblower lawsuit recoveries have generated significant returns to the US Treasury.
In any event, thanks for writing in.
Regards ed
I may have mispoken which disapppoints me since I try to be reasonably careful with my words on here.
At least for me, when I said it was old news I was referring only to the alleged conduct. These are not allegations that reveal some new facet of the industry that we have never seen before or that have never been elements of a subpoena. However, I agree completely that seeing the State of California intervene in such a case is new and very noteworthy. Frankly it is fascinating. So I stand corrected. This case is truly one to watch. And I am certainly happy to know that you will be following it Ed helping the rest of us understand this new development.
That being said and with all due respect, your comments about whistleblower cases and the US Treasury surprise me. No doubt the government has raised a great deal of money from whistleblower cases. But what I think people are finally doing is stepping back and asking the question whether that was the goal. Maybe it was but I am not sure. It is very important for everyone to recognize the issues.
The primary manner in which our government is authorized to raise money is through taxes. And there have been special taxes designed to influence behavior e.g. tobacco and gas taxes. But there are some significant consquences when the government turns to illegal behavior as a significant source of revenue.
In the rare event that even a single sole is reading this, I would make an analogy that may be off point but I don't think it is. We all joke in society that our local police officers have traffic ticket quotas etc. And I think there is some truth to it. Certainly, there seem to be situations where police officers have some incentive to issue tickets. Perhaps the money is allocated back to fight crime. On it's face that sounds great. But therein lies the rub.
A number of years ago, my son was in elementary school. We lived in one of the major NE cities. It was a good neighborhood but still part of a big city and we faced issues in the school playground. There was a time when teenagers were showing up selling drugs. It took a lot of work by the parents to keep the park safe. Thoughout these incidents we could not get a police officer to routinely patrol the playground not matter how loud we screamed. But if you walked two blocks away, there was a corner that the police would patrol constantly. And it was not because it was dangerous. The reality was there was a "no turn on red" sign that cars rarely saw. It was the proverbial trap. And the police would sit there and write tickets all day long. And I think you can see the point. When law enforcers turn to illegal conduct as a source of revenue there are unintended consequences. Inevitably there is a risk that they focus on the revenue rather than interceding where and when they can actually have the most impact on people and their safety.
Healthcare is a unique part of our commerce. When delivered appropiately to as many people as possible, when properly incentivised to develop innovative medicines and when checks are in place to protect consumers, an enormous amount of benefit flows. But because it involves people and their health, an enormous amount of harm can be done as well. So from my perpective, I don't really want the DOJ, the OIG, the FDA and the various states penalizing conduct simply to raise money, so that they can build up the force to go after more folks and raise more money etc. It becomes a beast that feeds on itself.
We need the government to allow the marketplace to evolve, to allow innovation and competition to flourish and to intercede when necessary to protect consumers and to protect the integrity of the scientific and clinical processes at work.
I believe we finally have found a situation where some politicians are finally starting to ask the right questions. Are we really getting what we needed and hoped for from these cases. Yes, I agree the treasury has raised lots and lots of money. So now the government can go after more companies and raise more money. But are we better off? Are the companies penalized making a greater contribution to scince and consumer welfare? Is the integrity of the scientific process more sound? Are consumers safer? Do we share a greater confidence in the healthcare system?
I think the jury is still out.
The story can't be a surprise given Bristol-Myers tortured history and scandal and governance failure. Let's look at the quick list:
In April 2003, Bristol settled with the FTC for improperly manipulating patent listings to keep generics out. Bristol also settled with private plaintiffs for over $600 million.
In August 2003, Bristol received a Warning Letter from the FDA for inappropriately promoting Pravachol.
In June 2005, Bristol entered into a Deferred Prosecution Agreement regarding allegations that BMS manipulated the distribution channel in order to overstate revenue. Bristol also agreed to pay $300 million into a settlement fund.
In February 2006, BMS agreed to pay $185 million to shareholders who sued BMS regarding statements made about the prospects for Vanlev. The cases dated back to 2002 or 2003 when the development of Vanlev tanked.
In September 2007, BMS settled a DOJ case involving off label promotion of Abilify and other kickback and pricing issues. As part of the settlement, BMS paid $500 million in fines and entered a Corporate Integrity Agreement ("CIA").
In August 2008, BMS cut a bad deal with Apotex to settle patent litigation. The Agreement did not prevent Apotex from dumping enormous amounts of generic plavix into the market, deeply damaging BMS business. Ultimately, the damage caused by the deal forced then prosecutor Chris Christie to put pressure on BMS to oust Peter Dolan as CEO.
This is just a partial list but the notion that all those events transpired 2003 or after is incredible. Looks like we might be adding to the list.
i'm the editor of a french newsletter for pharma industry. And all the storys about whistleblowers are absolutly unbelievable for my french readers. i think they're a little afraid about a possible exportation of that !
Sounds like a consistent methodology used by big pharma. It really does not matter if it happened before or after the regulations were agreed upon and approved by PMA, it was still illegal. I do agree the behavior has to stop and individuals need to be held accountable or nothing will change. ANd the feds do not recover the money lost due to fraud, they just recover a part of it, sometimes only a small part of it. It is very profitable for big pharma even if they are caught.
Abilify was given to my father as a sample packet after seeing his doctor once. It put my dad in the hospital for nearly a month and caused drug induced parkinsonism. My dad nearly died and now can barely walk. The drug was administered over a period of a week on top of his 3 other antidepressants, heart medicine, and diabetes shots and pills. We are currently in the process of filing lawsuits against the doctor and perhaps the drug manufacture.