By Peter Loftus
Federal prosecutors are probing whether big drugmakers including
Sanofi SA, Gilead Sciences Inc. and Biogen Inc. potentially
violated laws by providing free services to doctors and patients,
according to a Wall Street Journal review of securities
filings.
Drug companies say the services, such as nurses and
reimbursement assistance, help doctors and patients. But the
practices, which have become more prevalent as drugmakers have
introduced more complex and expensive drugs, are drawing scrutiny
over whether they serve an illegal commercial purpose: inducing
sales.
Amgen Inc., Bayer AG and Eli Lilly & Co. face whistleblower
lawsuits alleging the services are illegal kickbacks. Meanwhile,
California's insurance commissioner this week sued AbbVie Inc.,
accusing the company of providing kickbacks in the form of nursing
support and insurance assistance to prompt doctors to write
prescriptions for its arthritis drug Humira.
Altogether, the federal investigations, whistleblower lawsuits
and California case suggest that the drug industry's growing
provision of free services is starting to draw the same kind of
attention that had been trained on once-common company sales
practices such as lavishing high-prescribing doctors with fancy
dinners and trips.
AbbVie's share price has declined about 3% since the lawsuit was
filed. The North Chicago, Ill., company said the California
allegations, as well as a previous whistleblower lawsuit, are
without merit, and that it complies with state and federal laws. It
said it provides services for patients once they are prescribed
Humira.
Bayer and Lilly said the whistleblower lawsuits against them
have no merit, and Amgen declined to comment.
The lawsuit against AbbVie could have broader implications for
the industry because the practices it describes "are similar to
what other biopharma companies have also used to help patients
start and stay on medications that their doctor prescribes," Credit
Suisse analysts said in a research note.
Drugmakers are drawing scrutiny for an ever-widening array of
practices that they say help patients, from defraying copay costs
to providing disease education. However, prosecutors and critics
say such practices, even if helpful, are intended to encourage
continued use of specific drugs over alternatives. Additionally,
some critics say that such tactics can boost overall health-care
costs by pushing higher-priced drugs on people.
A federal anti-kickback statute prohibits payments to induce
drug prescriptions or other medical care that is reimbursed by
government health programs.
The Justice Department has probed drug manufacturers' donations
to third-party charities that help pay drug copays for Medicare
patients. That practice tends to boost overall sales because
Medicare pays the bulk of the cost. Last year, United Therapeutics
Corp. agreed to pay $210 million to settle Justice Department
allegations related to use of a third-party foundation to pay
copays. United Therapeutics didn't admit liability.
In Sanofi's case, the U.S. attorney's office for the Southern
District of New York sent the company's U.S. unit a civil
investigative demand in August 2017 requesting documents and
information about the company's "certified diabetes educator
program," Sanofi said in a securities filing in March. Government
officials sometimes seek broad information through such demands,
but it doesn't always lead to further action.
The Sanofi program consisted of nurse practitioners and other
health-care professionals who answered patients' questions about
diabetes and trained them to use Sanofi's diabetes products, a
Sanofi spokeswoman said. The program is no longer in effect.
Sanofi is cooperating with the investigation into whether it
violated the anti-kickback law, the spokeswoman said. A spokesman
for the U.S attorney's office in New York declined to comment.
Gilead Sciences has received state and federal inquiries. In
September 2017, the U.S. attorney's office for the Eastern District
of Pennsylvania requested information about Gilead's "reimbursement
support offerings, clinical education programs and interactions
with specialty pharmacies" for its hepatitis C drugs Sovaldi and
Harvoni, the company said in a February securities filing. The U.S.
attorney's office in Pennsylvania declined to comment.
In October 2017, the California insurance department and the
Alameda County, Calif., district attorney's office sent a subpoena
to Gilead requesting documents about similar matters, Gilead said.
The company said in its filings it is cooperating in both
inquiries. A company spokeswoman declined to comment further.
Biogen, which makes several drugs for multiple sclerosis,
received a civil investigative demand from the federal government
in December 2016 for documents and information about its
relationships with "entities providing clinical education and
reimbursement support services," Biogen said in securities filings
last year. The company said in filings it is cooperating with the
government; a spokesman declined to comment further.
The California lawsuit against AbbVie said the company has sent
registered nurses to visit patients to train them how to inject the
company's arthritis drug Humira and provide other assistance. The
lawsuit said AbbVie also provided staff to help doctors' offices
with paperwork for obtaining reimbursement for the drug, which can
cost more than $50,000 a year.
According to the lawsuit, such services saved doctors time and
money, inducing them to prescribe Humira, the highest-selling drug
in the world. In 2017, Humira had $18.4 billion in global sales,
including $12.4 billion in the U.S. California is seeking monetary
damages on behalf of private insurers that have paid $1.29 billion
since 2013 to cover Humira prescriptions for California
patients.
The state insurance commissioner, Dave Jones, said the nurses
deployed by AbbVie were trained to ensure patients stay on Humira
and to sidestep questions about Humira's risk of side effects.
"It's of particular concern when decisions about medical care
are being driven by kickbacks and inducements as opposed to what's
in the best interest of patients," Mr. Jones said in an
interview.
California's lawsuit against AbbVie updates a prior
whistleblower lawsuit filed by Lazaro Suarez, who worked in 2013
and 2014 as a Humira "nurse educator" for an AbbVie contractor,
Quintiles, now part of IQVia Holdings Inc. The state joined the
case as lead plaintiff and filed a revised lawsuit Tuesday.
Drug companies' free services to doctors and patients may sound
positive, but it "undermines medical decision making," said Rachel
Geman, Mr. Suarez's attorney.
Mr. Suarez also has filed a lawsuit against AbbVie in federal
court in Illinois with similar allegations. Mr. Suarez could
collect a share of any money the federal government or California
collects via settlements or judgments.
A spokesman for IQVia, which isn't a defendant in the California
lawsuit, said the company adheres to the highest ethical
standards.
Write to Peter Loftus at peter.loftus@wsj.com
(END) Dow Jones Newswires
September 21, 2018 15:38 ET (19:38 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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