Fraudulent Promotion of Bextra “Part of Pfizer Culture”

BNET reported on June 22, 2009, the sentencing of a regional sales manager of pharmaceutical giant Pfizer for her role in the company’s off-label promotion of Bextra. Although Mary Holloway received extensive praise from company superiors for her illegal promotion of Bextra for unapproved uses, she is only one of two sales managers to be tried for their participation in the fraudulent behavior. Holloway trained and encouraged 100 company sales representatives to partake in the fraudulent scheme. According to a memo filed by Holloway’s lawyer in federal court, the Bextra promotion was widespread within the company, and generally “part of the Pfizer culture.”

Pfizer resolved its Bextra scandal allegations earlier this year in a $2.3 billion settlement with the government. The settlement was little publicized, however, as it was released on the same day as the company’s announcement of a merger with fellow pharmaceutical giant Wyeth.

Ironically, Ms. Holloway had been distinguished as an ethical figure in Pfizer for her notification of superiors upon learning that other sales representatives in one of her districts deleted information from their computers. According to BNET, this good-faith action is likely what sparked the government investigation that eventually resulted in Ms. Holloway’s conviction.

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Pharma Giant Wyeth Accused of Medicaid Fraud in 16 States

On May 18, 2009, the United States Department of Justice announced that the United States and 16 states have joined in two whistleblower lawsuits against Wyeth, a giant pharmaceutical company. Wyeth allegedly failed to provide the same discounts to the government for its drugs, Protonix Oral and Protonix IV, as it provided for private purchasers. By failing to give the government equal discounts, Wyeth fraudulently avoided paying hundreds of millions of dollars in rebates, and in so doing violated the Medicaid Drug Rebate Program.

The Medicaid Drug Rebate Program was designed to guarantee that Medicaid, the nation’s provider of health insurance to the poor and disabled, would receive the same discounts enjoyed by large commercial customers in the market. From 2000 to 2006, Wyeth supplied Protonix Oral and Protonix IV in “bundled” packages to hospitals, who then received 94% and 80% discounts, respectively, for purchasing the drugs together. In Wyeth’s case, the company was required to determine the effective prices hospitals paid in this agreement, and offer the same prices to Medicaid. The company allegedly to have failed to do this.

“Our complaint charges that Wyeth created the Protonix bundle so they could increase their market share at the expense of the Medicaid program — a program to provide the least advantaged Americans with necessary medical care and services,” said Tony West, Assistant Attorney General for the Civil Division. “By offering massive discounts to hospitals, but then hiding that information from the Medicaid program, we believe Wyeth caused Medicaid programs throughout the country to pay much more for these drugs than they should have.”

The two separate civil False Claims Act suits – called qui tam actions – were filed against Wyeth and are pending in the District of Massachusetts. In addition to the United States, California, Delaware, the District of Columbia, Florida, Illinois, Indiana, Louisiana, Massachusetts, New York, Michigan, Nevada, New Hampshire, Tennessee, Texas, Virginia and Wisconsin also have intervened in the whistleblower suits against Wyeth.

“The best price reporting requirement is designed to assure that the nation’s healthcare programs for the poor – the Medicaid programs – are treated equally with drug companies’ best commercial customers,” said Michael K. Loucks, Acting U.S. Attorney for the District of Massachusetts. “We seek through today’s suit to put the Medicaid programs on par with Wyeth’s best customers, as it had agreed.”

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Eli Lilly & Co. Sued For Paying CVS Unit To Promote Zyprexa

On June 14, 2009, Bloomberg News announced a suit against AdvancePCS (APCS), a subsidiary of CVS Caremark Corp., America’s largest drugstore chain. APCS, a pharmacy benefit manager (PBM), offered to use information to which it has access as a prescription processor in a mass mailing promoting Eli Lilly & Co.’s Zyprexa antipsychotic. The unit of CVS said it would charge $5 per letter touting Zyprexa, Lilly’s top-selling drug that brought in $4.7 billion in sales in 2008.

PBMs such as CVS’s APCS are hired by health insurance companies and pension plans to advise them on which medicines should be covered by their plans, and to bargain with pharmaceutical companies for the cheapest price. In the United States, PBMs process about 75 percent of the retail prescriptions written annually.

“The problem is that PBMs are negotiating these hidden deals while at the same time telling employers that they represent them at the negotiating table,” said Gerry Purcell, a former PBM executive who advises companies on their drug plans.

The suit brought against Lilly—CVS is not a defendant—insists that the company, the biggest maker of psychiatric drugs, pay as much as $6.8 billion in damages for marketing Zyprexa for unapproved uses and downplaying its health risks in an attempt to increase profits.

Over 10,000 documents have been unsealed in the case. They reveal that Lilly officials engaged in  “ghostwriting,” when the officials would write medical journal studies about Zyprexa and then ask doctors to sign them. The documents also prove that Lilly urged doctors to prescribe Zyprexa for patients with dementia, an unapproved use for the antipsychotic, despite the fact that Lilly had evidence the medicine did not work for such patients.

“These documents will add fuel to the perception that the companies and the PBMs are in cahoots with each other,” Purcell said.

Lilly declined to comment on whether it accepted CVS’s $5-per-letter offer.

Richard Beck, the executive director of the Texas Pharmacy Business Council, said the conflicts of interest for companies that both represent health insurers in their search for cheaper medicines and market those drugs for the drug makers “are just too obvious to ignore.”

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University Hospital Double-Billed Medicaid, Returns Millions

On June 9, 2009, the Department of Justice reported the settlement of a False Claims Act case involving the University of Medicine and Dentistry of New Jersey (UMDNJ). Over a period of 11 years, the University’s hospital submitted duplicate bills to Medicaid for outpatient physician services and outpatient center doctor work. In effect, the government was double-billed. UMDNJ has agreed to pay the United States $2 million to resolve these allegations of federal civil fraud.

The case was initiated by a whistleblower, Dr. Steven Simring, who will receive $801,000 of the total federal recovery. In addition to the $2 million to be recovered by the government through the civil case, UMDNJ paid $4.9 million in a criminal case resolved prior to the civil case ruling. Half of the criminal settlement was to be returned to the federal Medicaid program.

“Today’s settlement demonstrates that the Department of Justice will not tolerate fraud on our Medicaid programs, which were created to serve our nation’s low-income families, children and seniors,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “We will continue to work with our partners at the Department of Health and Human Services Inspector General’s Office to protect the integrity of our public health programs.”

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

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