It is encouraging to read reports of the U.S. government bringing
down the hammer on companies that commit multi-million dollar
fraud—especially when their crimes could cause direct physical harm or
death to unsuspecting citizens. According to a press release recently
published by the Justice Department,
a New Jersey-based pharmaceutical company is on the hook for bribing
doctors, engaging in unethical marketing practices and defrauding the
Department of Veterans Affairs, Medicaid and other insurance providers,
in an attempt to get a hedge on the prescription drug market.
It was discovered that, over a four-year span of time, this
particular pharmaceutical company held “Medical Education Events” that
essentially acted as a vehicle to pay off doctors so they would favor
its drugs over others when they wrote prescriptions for patients. During
these events, which were often held at pricey restaurants and rarely
offered true educational value, the company provided physicians with
meals, payments and other incentives. At times, it directly courted
“high-prescribing” physicians to act as the company’s brand ambassadors,
soliciting them to become speakers for the purpose of obtaining
prescriptions. (“It’s easy. Just read what’s on the teleprompter and pick up your ‘speaking fee’ on the way out.”)
In an even grander attempt to side-step federal restrictions
preferable to competitors, the company submitted deceptive requests for
prescription authorizations to federal health care programs, submissions
that intentionally falsified certain patients’ medical histories and
needs. In some instances, members of its sales team cut out doctors from
the equation entirely and misrepresented themselves as physicians in
order to directly submit prior authorizations. (“I’m not a doctor, but I play one in real life.”)
The company also engaged in direct, unethical drug-marketing
practices by asserting that their drugs were more effective than those
sold by competitors, even though no clinical evidence existed to support
such claims. (“Evidence, schmevidence. We can charge more if we say it’s better.”)
A joint criminal investigation among numerous federal agencies
resulted in criminal charges being brought against the company and
participating individuals. A criminal plea agreement requires the
company to pay roughly $23 million in fines, to forfeit $2 million
related to illegal drug promotion and to pay nearly $200,000 in
restitution to private insurance companies it defrauded.
A separate joint civil investigation resulted in a settlement of more
than $102 million the company must pay the government for the false
claims it submitted to public health care programs: $91.5 million to the
federal government, and $10.6 million to the state Medicaid program.
As demonstrated by the massive financial penalties imposed on this company (a total of $125 million in case you weren’t counting),
brought about by collaboration among numerous federal and state
agencies and jurisdictions, the government is sending a clear message to
pharmaceutical companies: “the government will take action and hold
companies accountable when they prioritize profits over patient care.”
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