For Big Pharma, a $648M bribery settlement and heat over anti-viral’s price

drugnovartislogo-300x127Big Pharma focuses relentlessly on always making a buck, no matter the cost to the rest of us, and even a viral pandemic that infects 2.8 million Americans and kills roughly 130,000 of us won’t interrupt the corporate rapaciousness.

That’s the reality that federal prosecutors have reminded the public about with an announced $678 million settlement with Novartis over the drug maker’s doctor prescribing- and kickbacks-scheme.  And it is what Gilead has shown with its planned pricing for remdesivir. It is an anti-viral drug that has shown modest effect in shortening the course of Covid-druggileadlogo-300x11519 infections and was developed with taxpayer funding.

The Novartis case also paints a damning picture of doctors’ complicity in taking bribes to defraud taxpayers (specifically the Medicare, Medicaid, and Veterans Affairs programs) by pushing company products, including the high blood pressure drugs Lotrel, Diovan, Exforge, Tekturna, Valturna and Tekamlo, and the Type 2 diabetes medication Starlix.

As Audrey Strauss, the acting U.S. Attorney for the Southern District of New York, described the bad acts in a statement:

“For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs.  Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increases drug costs for everyone.”

The goodies dispensed— besides huge honorariums — included travel and entertainment. Prosecutors detailed the pricey feeding and watering holes at which Novartis wined and dined doctors, including: “Masa, Daniel, Gramercy Tavern, Il Mulino, Babbo, Peter Luger, Le Bernardin, and Eleven Madison Park in New York City; Charlie Palmer’s in Washington, D.C.; Morton’s Steakhouse and the Four Seasons in Chicago; Joe’s Stone Crab in Miami; Abacus, Nobu, and the Four Seasons in Dallas; Gary Danko in San Francisco; Patina and Matsuhisa in Los Angeles; Grill 225 in South Carolina; and Commander’s Palace in New Orleans.”

As the prosecutors statement noted: “In 2008, at a speaker program held at Ruth’s Chris Steakhouse in Pikesville, Md., Novartis held an event with only one doctor in the audience for the speaker’s presentation, at which it spent $448 per person on food and alcohol, in addition to the $1,000 honorarium payment provided to the speaker.”

The ROI (return on investment) was good for Novartis’ sketchy outlays, the New York Times reported:

“One doctor, who wrote more than 8,000 prescriptions for Novartis drugs, received $320,000 in honorariums, according to the settlement, which did not name the doctor. Another doctor who wrote 9,000 prescriptions received $220,000 in honorariums, and a third doctor who wrote 3,600 prescriptions was paid more than $200,000. ‘Not only did Novartis incentivize doctors to host these speaking events, reps bribed the doctors to write more prescriptions of the company’s drugs to give Novartis an advantage over competitors within their field,’ William F. Sweeney Jr., the assistant director in charge of the FBI’s New York field office, said in a statement. ‘Greed replaced the responsibility the public expects from those who practice medicine, not to mention the potential for an erosion of trust in the pharmaceutical industry as a whole. This conduct was reprehensible and dishonest.’”

Novartis, which reported 2017 revenues just under $50 billion, has said it will do better, with its CEO noting the drug maker has new leadership and has undergone other changes, including agreeing to “corporate integrity obligations” with the U.S. government. Federal prosecutors, by the way, have not detailed the doctors who took the kickbacks.

Bloomberg news service reported the New York deal was one of several settlements reached by the company:

“In a separate settlement, Novartis agreed to pay more than $51 million to end claims by prosecutors in Boston that it violated federal law by paying the Medicare co-pays for its own drugs to get patients covered by federal insurance programs to buy their drugs … The company announced June 25 it would pay about $347 million to resolve claims its units in Greece and Vietnam bribed doctors and hospitals to prescribe its products and created false records to cover the bribes. In 2015, the company also paid $390 million to resolve federal prosecutors’ claims it gave kickbacks to U.S. specialty pharmacies in order to increase sales of its Exjade and Myfortic drugs. Exjade reduces iron levels in the body while Myfortic is an anti-rejection drug for kidney transplant recipients.”

As for Gilead, the drug maker drew as much fire as it did praise for its announced pricing of remdesivir, which the San Francisco Chronicle reported, thusly:

“The maker of a drug shown to shorten recovery time for severely ill Covid-19 patients says it will charge $2,340 for a typical treatment course for people covered by government health programs in the United States and other developed countries. Gilead Sciences announced the price … and said [it] would be $3,120 for patients with private insurance. The amount that patients pay out of pocket depends on insurance, income and other factors.”

That might be an appropriate cost for the drug, some independent evaluators noted, as the newspaper reported:

“The Institute for Clinical and Economic Review, a nonprofit group that analyzes drug prices, said remdesivir would be cost-effective in a range of $4,580 to $5,080, if it saved lives. But recent news that a cheap steroid called dexamethasone improves survival means remdesivir should be priced between $2,520 and $2,800, the group said.”

Critics said that Gilead — the subject of other big and sustained complaints, for example, over the cost of its HIV medications — will make hefty profits with its pricing plan, while also trying to reap public relations benefits by appearing to keep remdesivir’s costs constrained, including in the developing world at $600 or so for a treatment regimen. Gilead also had sought to boost its public standing by donating a significant number of dosages of its existing remdesivir after clinical trials showed the drug’s modest effectiveness in Covid-19 treatment.

But Dr. Steven Nissen of the Cleveland Clinic told the San Francisco Chronicle: “This is a high price for a drug that has not been shown to reduce mortality. Given the serious nature of the pandemic, I would prefer that the government take over production and distribute the drug for free. It was developed using significant taxpayer funding.”

Indeed, critics howled, the newspaper noted:

“Peter Maybarduk, a lawyer at the consumer group Public Citizen, called the price ‘an outrage. Remdesivir should be in the public domain’ because the drug received at least $70 million in public funding toward its development, he said. ‘The price puts to rest any notion that drug companies will “do the right thing” because it is a pandemic,’ Dr. Peter Bach, a health policy expert at Memorial Sloan Kettering Cancer Center in New York said …’The price might have been fine if the company had demonstrated that the treatment saved lives. It didn’t.’”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them and their loved ones by dangerous and harmful drugs. If patients wonder, too, how and why prescription medications also keep skyrocketing in price, one answer appears to be, sadly: Because. Because Big Pharma will push every boundary possible — and politicians and regulators have been incapable or unwilling to keep the profit-mongering in check. Good for prosecutors for stepping into the breach, but why the heck must scams reach the stage of big dollar criminality before officials act?

Big Pharma not only has spent vigorously before on advertising, marketing, and especially political lobbying for itself and its wares, the industry now, as one critic has decried it, “view Covid-19 as a once-in-a-lifetime business opportunity,” said Gerald Posner, author of “Pharma: Greed, Lies, and the Poisoning of America.”

“The world,” he told the Intercept news site, “needs pharmaceutical products, of course. For the new coronavirus outbreak, in particular, we need treatments and vaccines and, in the U.S., tests. Dozens of companies are now vying to make them. ‘They’re all in that race,’ said Posner, who described the potential payoffs for winning the race as huge. The global crisis ‘will potentially be a blockbuster for the industry in terms of sales and profits,” he said, adding that the worse the pandemic gets, the higher their eventual profit.’”

This is not good, and neither is the gullibility if not downright criminal deceit of doctors and hospitals in abetting prescription drug price gouging. Patients deserve better from medical caregivers, especially that they are not bought and sold, at prices cheap or dear, by Big Pharma, though research suggests that even the whiff of cash can influence prescribing.

We’ve got a lot of work to do, not only to battle the killer coronavirus but also the debilitating leeching of excess profit-taking by Big Pharma.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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