Expensive golf outings, Lakers basketball camp for kids, concerts, Broadway shows and cold, hard cash. These are some of the things that drug giant Bristol Myers used to lure doctors into prescribing the company’s pharmaceuticals. Under federal law, paying kickbacks or giving anything of value in order to induce someone to prescribe a certain type of medication is illegal.
Bristol Myers and Kickback Allegations
The lawsuit against Bristol Myers was started by three of the company’s former sales representatives. They claimed that the company knowingly approved of pricey incentives to induce doctors to prescribe more of their brand named pharmaceuticals. One of the drugs being pushed was Pravachol, a cholesterol lowering drug.
Brand name anti cholesterol drugs are quite pricey. Consumers pay on average over $100 per month. Two new cholesterol drugs, Repatha and Praluent, cost over $14,000 per year! With some of the more established drugs like Pravachol, generics are now available that can lower monthly costs to below $4 per month. (Generic pravastatin is the widely accepted substitute for Pravachol.)
As drugs come off patent, drug makers worry that generics will decrease their profits. Some companies like Bristol Myers resort to “incentives” to keep doctors writing prescriptions for the more expensive brand name drug.
According to California officials, Bristol Myers incentives included:
- Box suites at sporting events where physicians were provided tickets, food, drinks, and parking.
- Enrollment in a Lakers basketball camp for doctors and their children.
- Pre-paid golf outings at luxurious golf courses.
- Tickets for physicians and their families to see Broadway plays in California cities.
- Monetary incentives given to doctors responsible for prescription-drug decisions for formularies.
- Lavish dinners, resort hotel trips, and concert tickets, given to doctors who were large-volume prescribers, to induce more prescriptions in the future.
California’s Insurance Commissioner joined in the whistleblower complaint and helped facilitate a settlement. Under the terms of the agreement, Bristol Myers must pay $30 million and affirm its commitment to follow state and federal compliance rules.
Despite paying a $30,000,000.00 penalty, the company accepted no responsibility for its actions. In a formal statement, a company spokesperson said, “Bristol-Myers Squibb denies any wrongdoing in this matter and we are pleased to put this matter behind us so that we can focus on making transformational medicines for patients battling serious diseases.”
State Insurance Commissioner Dave Jones said, “Patients have a right to expect medications prescribed for them are based solely on medical need and not because the physician was given tickets to a sporting event or treated to a lavish golf outing. Illegal and unethical marketing practices put patient health at risk if a medical professional is influenced by the inducements offered by drug makers.”
Insurance Fraud & Kickbacks
The federal Anti Kickback Statute makes it a crime to bribe or attempt to bribe physicians. Those doctors that accept bribes can also find themselves in hot water. Under federal law, a violation of the Anti-Kickback statute is also a violation of the False Claims Act. The latter is a 19th Century whistleblower law that allows the Justice Department to pay whistleblower awards to those with inside information about Medicare fraud.
Twenty-nine states and the District of Columbia have state false claims laws that pay whistleblowers for information about kickbacks involving state funded Medicaid programs.
California is one of just two states with robust whistleblower laws that pay rewards for information about private insurance fraud. Because this case involved losses to private insurance companies, the three whistleblowers filed their claims under the California Insurance Fraud Prevention Act. The complaint claims that the following insurance companies suffered losses because of the illegal incentive payments: Prudential, Cigna, Maxicare, Blue Cross/Blue Shield, HMSA Health Plan Hawaii, Scan Health Plus, United Health Plan, CalOptima, Argus, Merck-Medco, PCS, Prosever, Express RX/Value RX/DPS, Caremark, MedImpact/MedCare, Envoy, Aetna Pharmacy Management, Pharmaceutical Care Net, Advance PCS, Rx America, Prescription Solutions, WellPoint Pharmaceutical Management, First Health, Save-Rx, PacifiCare, and Health Net.
In 2007, Bristol Myers Squibb paid $515 million to settle similar charges brought by the Department of Justice.
Under California’s Insurance Frauds Prevention Act, the three whistleblowers are entitled to receive $15 million of the settlement. The previous 2007 federal settlement was also the result of seven different whistleblower claims and resulted in tens of millions of dollars in whistleblower awards.
Insurance fraud costs American taxpayers billions of dollars each year. It also results in less healthcare money being available for those truly in need. Insurance fraud is not a victimless crime.
If you are aware of Medicare fraud, Medicaid fraud or other forms of healthcare fraud, give us a call. Our whistleblower clients have received over $100 million in awards. If you have inside information, the next award could belong to you.
MahanyLaw – America’s Healthcare Fraud Lawyers