Whistleblowers: The drug company offered "bribe" doctors to increase sales

The effort, whistleblowers said in a lawsuit against the company, was part of an intentional "multi-tiered strategy" by Questcor Pharmaceuticals, now Mallinckrodt, to increase sales of H.P. Acthar Gel, cheats government out of millions of dollars.

The Ministry of Justice has now intervened in the case after carrying out its own extensive investigation – a sign that the government believes the allegations imposed by whistleblowers are credible. Mallinckrodt did not deny the charges in a statement to CNN, but said the error is mainly located at Questcor.

The claims of bombshell lay down on what whistleblowers said was a culture designed to sell the drug at all costs, from lying to the food and drug administration to offering bribes to doctors.

The price increase, coupled with an aggressive sales pressure in rheumatoid arthritis, multiple sclerosis and other areas, has pushed the drug's annual sales of over $ 1[ads1] billion.

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Many of these sales are driven by Medicare refunds. A CNN survey last year showed that the Medicare spending on the Acthar had risen dramatically – more than ten times over six years – to around $ 2 billion.

In their lawsuit, the whistleblowers said the drugmaker's behavior "has deceived the federal government out of millions of dollars that should not have been paid, thereby enriching [the company] and exposing the patients to unauthorized, insecure and potentially inefficient uses of the HP Acthar Gel."

"Questcor has attempted to hide and cover the payment of refunds and its illegal promotion by the HP Acthar Gel by making false statements to the FDA and directing employees to conceal evidence by not disclosing … the full nature and extent of advertising, marketing and marketing materials and plan. "

Mallinckrodt acquired Questcor in 2014 as part of a $ 5.6 billion deal. "The illegal practice that Questcor had been engaged in since 2007," declared the case, "has been deliberately pursued since the merger and acquisition of Questcor by Mallinckrodt."

The floats' claims were unsealed after the Justice Department was granted on March 6 to intervene in the lawsuit. The Ministry of Justice has 90 days to submit its own complaint, according to the submission in March.

If responsibility was found liable, Mallinckrodt could pay up to three times any amount the government has found to have been deceived, as well as penalties

The Justice Department denied comment on this story.

Mallinckrodt said in his statement to CNN that it was disappointed with the Justice Department's decision to pursue the case and that it cooperated with the agency. Drugmaker also sought to refrain from Acthar's former owner, Questcor.

"The claims relate mainly to the legend Questcor," says Mallinckrodt.

"Mallinckrodt has collaborated fully with the DOJ in its review of this historic behavior, Volunteer provides documents and information to the government. While we are disappointed, DOJ has chosen to continue with the lawsuit, we have been in advanced deal negotiations with the government in the past. The months.

"The company believes that these sales and marketing claims will probably be resolved in the short term through ongoing negotiations, and further believes that a solution that is affordable and manageable for all parties is possible. Since the case mainly concerns allegations of hereditary behavior before Mallinckrodt's acquisition of Acthar Gel, we do not see any impact on how Mallinckrodt operates today. "

In his statement, the company referred to whistleblowers as two former Questcor employees, yet it is clear that one of the employees remained after the 2014 merger and worked for Mallinckrodt and left the company in June 2017.

After CNN published this story, Mallinckrodt sent an extra statement: "Mallinckrodt strongly disagrees with the substance of the complaint and the remarkable characterization of the claims. "

Marc Orlow, a lawyer representing the two whistleblowers, welcomed the government's decision.

" Our customers are true heroes to stand up for a corrupt corporate culture that costs taxpayers hundreds of millions of dollars, he says.

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The government does not make the decision to intervene in a whistleblower case easily, said Jennifer Arlen, a professor of law at New York University specializing in business enforcement.

  Medicare spent $ 2 billion for a drug that the manufacturer paid doctors million
"The government tends to take over winners," said Arlen, who serves as director of NYU's corporate compliance and enforcement program. "Historically, the government's decision to take this over is a bad sign" that the company is being investigated.
The government intervenes in fewer than 25% of whistleblower cases, according to the Ministry of Justice.

But the issue of health problems, says Arlen, can be "very challenging because pharmaceutical companies regularly have legitimate counseling and research arrangements with doctors."

"The government must show that the intention was to reward doctors for their prescribing behavior," she said.

What will be interesting, says Arlen, if the government uses its vast amount of prescribing data from doctors to strengthen its case.

"During today's administration, it seems to be a real effort to combat various forms of health fraud, and I know that DOJ is using data analysis to identify doctors who deceive the government," she said. "The data can be used very effectively in a case like this."

Last year's CNN survey showed that Acthars producers had paid doctors millions.

More than 80% of the doctors who submitted Medicare claims in 2016 for Acthar received money or other benefits from drugmakers, according to the CNN analysis of publicly-identified researchers.

The analysis, which looked at doctors who submitted more than 10 part D requirements, showed that Mallinckrodt and Questcor paid 288 researchers over 6.5 million for counseling, sales and other Acthar related services between 2013 and 2016. [19659002]

$ 1,000-a-gallon gas

The whistleblower lawsuit had been under seal for seven years in the US District Court in the Eastern District of Pennsylvania, since it was originally filed against Questcor in 2012. The suit has been changed to reflect Mallinckrodt's acquisition of Questcor in 2014.

When government files notice to intervene in a whistleblower case, the complaint is unsealed – in this case, the fourth amended complaint filed on June 8, 2017. All other documents related to the case remain sealed.

This is not the first time Mallinckrodt has met the government's investigation related to Acthar. The pharmaceutical company reached a $ 100 million settlement in 2017 after the Federal Trade Commission accused the drug user of breaking the antitrust law to prevent competitors from undermining Acthar's exorbitant price. The company settled without acknowledging the offense.

The drug is approved for 19 indications, including multiple sclerosis, rheumatoid arthritis and kidney disease. But critics note that the drug was approved for many of these conditions far beyond the FDA's more stringent standards today and that there are few randomized clinical trials showing the effect, especially in adult conditions.

"Medicare has spent millions of dollars for Acthar for questionable indications," said Dr. Dennis Bourdette, head of the Department of Neurology at Oregon Health & Science University, who has studied the drug's price and the doctors prescribe it for years.

The whistleblower suite was filed by Charles Strunck, who worked for Questcor as a multiple sclerosis sales specialist from September 2010 to August 2011, and Lisa Pratta, a specialist in Acthar neurology with Questcor and then Mallinckrodt from September 2010 to June 2017.

According to the case, Mallinckrodt "deliberately engaged in an illegal scheme to increase sales and profits by engaging in" illegal activity, including:

  • federal anti-kickback statute using valuable incentives, rewards, and others forms of remuneration to induce health professionals to promote and prescribe "Acthar."
  • "Systematic promotion and marketing of the HP Acthar Gel for unauthorized use, without the use of labels."
  • cause hundreds or thousands of false claims for reimbursement of HP Acthar Gel to be sent to, and paid by, federal health programs. "

Sales members were compensated royally for increased sales, said the package of lucrative monthly bonuses designed to promote a "sell at all A sales specialist was awarded a $ 124,000 bonus in the second quarter of 2011, including $ 75,000 a month alone, another received a $ 110,000 bonus in the same quarter, including $ 80,000

Sales reps were given a daily report "track the productivity of all specialists to motivate them."

"This exercise continued after the merger with Mallinckrodt," said the package.

The success claims that Questcor had problems getting into the multiple sclerosis market because it was a cheaper alternative that was considered the standard of care for MS flareups.

"Questcor's answer to this challenge has been to bribe doctors to prescribe and promote the HP Acthar Gel," the package said.

The success continued to say that many doctors who treated MS patients refused to speak to Questcor sales representatives, but the company developed a workplace: "One way that Questcor has overcome this threshold obstacle is to bribe office workers to arrange such meetings. "

Bourdette, CEO of Oregon Health & Science University's Multiple Sclerosis Center, found these claims particularly exciting.

"In the multiple sclerosis field, there is a very small number of doctors who prescribe Acthar, and I have never understood why these doctors do," he said. "If these charges are true, it can provide an explanation."

The drug price has been a source of controversy for more than a decade since the price shot up overnight in August 2007 from $ 1,600 to $ 23,000 a vial. At that time, the drug was primarily marketed for infantile spasms, a disruptive seizure failure in babies.

Despite protests from the nation's best epilepsy findings and neurological groups above the drug's high price, Acthar's price has risen another $ 16,000 per vial. Today, a $ 39,000 vial is listed.

The price increase puts it among the most dramatic drug price increases in the country's history, says Stephen Schondelmeyer, director of PRIME Institute, a research organization studying economic and political issues related to drugs.

"If gas [prices] increased from 1993 to 2019 with the speed of the HP Acthar, gas today would cost $ 1,300 a gallon, he said.

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