Health News Digest

January 19, 2015

Would You Trust A Doctor Who Got Kickbacks To Prescribe Your Drugs?

By Michael D. Shaw

I’m thinking, “Maybe not.” Yet, this sort of unethical practice goes on all the time. According to physician/activist Roy Poses, MD, there were at least four significant settlements of such cases during the last half of 2014 alone. And, by January 9th of our new year, another high profile case has already been settled. Officially, it is known as U.S. ex rel. Fragoules v. Daiichi Sankyo, Inc., Civil Action No. 10-10420 (D. Mass.).

In accordance with the disposition of the case, the US subsidiary of Japanese pharmaceutical firm Daiichi Sankyo Co. Ltd. will pay $39 million to the US federal government and state Medicaid agencies, to settle claims that it paid doctors kickbacks to prescribe certain of its products. Daiichi Sanyo also agreed to adhere to a so-called corporate integrity agreement, whereby a number of compliance programs are instituted to prevent similar abuses from occurring in the future.

The drugs in question are Welchol (cholesterol-lowering); and Benicar, Azor, and Tribenzor (antihypertensives).

Let’s examine some of the legal elements of this case. “Fragoules” is Kathleen Fragoules, who was employed by Daiichi Sankyo as a sales representative from approximately March, 1997 until January, 2010. The case was filed in March, 2010, and is a qui tam action.

Qui tam” is an abbreviation of the Latin phrase “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” meaning “Who sues on behalf of the King as well as for himself.” Such actions are brought by an informer or “relator.” Usually, these cases are filed under some statute which establishes a penalty for particular violations, and monetary damages are split between the relator and the state or other institution. In popular parlance, these relators are known as “whistle-blowers.”

Thus, “U.S. ex rel. Fragoules” denotes that the Feds have instituted the action, but on the information and instigation of an individual (Fragoules) who has a private interest in the matter. “Ex rel.” is an abbreviation for the Latin “Ex relatione,” meaning “Upon relation, or information.”

Two federal laws are cited in the complaint: The Anti-Kickback Act (1934 and amended) and the False Claims Act (1863 and amended).

Pursuant to the Anti-Kickback Act, it is unlawful to knowingly offer or pay any remuneration in cash or in kind in exchange for the referral of any product (including a prescription drug) for which payment is sought from any federally-funded health care program. Daiichi’s kickbacks took the form of honoraria payments, meals, and other remuneration to physicians who participated in Physician Opinion & Discussion programs (PODs) from Jan. 1, 2005 through March 31, 2011, and other speaker programs from Jan. 1, 2004 through Feb. 4, 2011.

The plaintiffs contend that these remunerations were indeed kickbacks since virtually no conditions were placed on the settings of these programs, other than the physicians in question were “high decile.” In some cases, the programs were cancelled, yet the payments were still made.

The False Claims Act was invoked because payments for drugs were made by the government, but in many instances those drugs were prescribed “off-label” (outside the indications approved by the FDA). Such off-label prescribing was encouraged by Daiichi through its sales representatives—often via the PODs. Because prescriptions for off-label uses are generally not eligible for reimbursement under applicable federal health care regulations, submission of such a claim constitutes a false claim under the Act.

We can only speculate as to actual harm to the patients involved, who very likely would have received drugs that were less effective than those that would have been FDA-approved for the particular indication. In the meantime, the Feds, the attorneys, and Fragoules all get compensated for their trouble. Fragoules will walk away with more than $6 million.

But what about the bribed doctors? Some may think twice about accepting honoraria again, but most will just go on to the next opportunity. And for all those physicians who would even attend such “educational” events, let alone be influenced by them: Once a brown-nosing nerd, always a brown-nosing nerd.