Fighting Merck: Sleepless Nights, Mortgaged Homes
5 CommentsBy Ed Silverman // February 17th, 2008 // 10:21 am
Like many attorneys who think they have ‘the big case,’ Steven Cohen took a high-stakes gamble after meeting H. Dean Steinke, a Merck district sales manager in Michigan, who suspected that marketing practices aimed at docs were illegal kickbacks for two of the drugmaker’s most popular meds Vioxx and Zocor. Steinke’s prior complaints to his supervisor had fallen on deaf ears. And so the Merck manager wound up speaking with the Chicago lawyer.
Steinke had searched the Internet for a lawyer and found Mark Kleiman in Santa Monica, Calif., who called Cohen and asked if he could meet with Steinke because of their proximity, The Chicago Tribune writes. The two lawyers knew each other through an informal network of attorneys specializing in whistle-blower cases. What followed was a seven-year odyssey that forced Cohen to take out second mortgages on his Chicago home and a Michigan vacation home to cover his unpaid time and expenses that climbed to more than $2 million, according to the paper.
His big bet, however, paid off. Earlier this month, Merck agreed to pay more than $400 million to state and federal governments to settle the lawsuit. Steinke, who is now retired, will receive about $68 million. Cohen and two colleagues who worked on the case will get an undisclosed share plus their fees.
“I invested most of the money I had made as a private lawyer into this case,” Cohen tells the Tribune. “It’s not for everybody.”
On Dec. 6, 2000, the lawyers turned over 6,500 pages of evidence to Philadelphia prosecutors. In addition to allegations of kickbacks to docs, their lawsuit included claims that Merck offered deep discounts on its pills to hospitals but not to Medicaid. Federal law requires drugmakers to give Medicaid the best price they offer any customer.
For the first three years, federal prosecutors focused on the sexier kickback claims. But Justice officials in Washington hadn’t yet decided to join the case. A low point came in 2004, Cohen tells the paper, when Steinke’s lawyers had to educate a new lead prosecutor skeptical of proving the kickbacks because of the difficulty in getting docs to cooperate.
“I had some sleepless nights,” he tells the Tribune. “At one point we were preparing for the very real possibility we would not get intervention authority from federal government on substantial portion of the case.”
In the fall of 2004, Cohen ran into Tim Terry, Nevada’s chief deputy attorney general, who had concerns about pricing practices but no specific evidence of abuse. After meeting with Steinke and his attorneys, Cohen tells the paper, Terry launched his own investigation that culminated in a separate suit filed in Nevada in April 2005, alleging that Merck took advantage of a loophole in the law to increase market share.
An exemption in the best-price law says that meds sold at a discount of 90 percent or more don’t have to be disclosed to the government or included in best-price calculations. But the markdowns were meant to be used for charitable organizations, the Tribune writes, not as a means to sell more drugs to consumers by getting them hooked on a brand in the hospital.
It was a novel legal theory that had yet to be tested in the court of law, according to the Tribune. After the Nevada case was unsealed, Merck moved to have it dismissed, arguing that its pricing strategies were consistent with the law. In May 2006, a federal judge in Nevada declined to throw out the suit. “It was a landmark ruling for us,” Cohen said. “It changed the entire dynamics of the case.”
“Some attorneys in this area seem to be more mercenary, focused on how much money you can make,” Steinke, 51, tells the paper. “I know this sounds disingenuous, but these guys weren’t like that. They didn’t focus on the reward.”
Dan
Think about it:
If I have a beer between my legs while driving a car, a cop bulls me over and discovers this, I immediately go to jail.
If I have a white collar on, my persecution is deferred to somewhere in the neighborhood of a decade or so.
Can you say imbalance?
Paul
The persecution was not deferred. This is how long it too for plaintiff attorneys and states to pile on and bring on the blackmail. They’re all counting on company after company to say “pay now in a settlement without a judgment of wrongdoing or keep spending millions and millions and lots of distraction over many years” — just pay now and get it over with, without any admission. A matter of cutting their losses.
I would love to know how many cases never go anywhere and just fizzle away.
Dan
My understanding is that most cases are never settled, but perhaps I’m wrong. Swift and certain punishment is apparently a dream presently and unfortunatley. Yet this premise comes from a total layperson regarding such cases.
Dan
In addition, I seem to recall the primary issue in the case, about Merck offering remarkable discounts to hospitals with it’s products, was all over the press at the time. Was this an act of ignorance or acceptance?
Dr. Charles Coram
First do no Harm
February 4, 2005 I wrote a letter to the editor regarding my concerns about our healthcare community in Ottumwa.
Today, I want to give the people of Ottumwa an update.
On April 06, 2005 my wife gave birth to a wonderful baby girl (Olivia). She was delivered at the Ottumwa hospital. Before she was born; one of the hospital nurses asked my wife and I if we wanted our daughter vaccinated with Hepatitis B. My wife and I did not want our baby vaccinated at that time and signed a document to this. I explained to the nurse why we did not want her vaccinated. I told her that there has been documented studies indicating a greater risk for SIDS and AUTISM among children being vaccinated under the age of 2.
Within 2hours after Olivia was born, they vaccinated her with Hepatitis B.
We were told by hospital officials that the form that we signed was difficult for the medical staff to read. The Director of the medical staff told me that there was no risk to our daughter.
On April 20, 2005 Olivia stopped breathing. I rushed her to the hospital were she experienced two more episodes in the ER. She was kept in the hospital for the day and observed without incidence. For the next month our little girl had chronic breathing problems with no explanation from the hospital for her episode. We were constantly worrying that it was going to happen again. The hospitals doctor did ask my wife and I if we knew CPR, just incase it happened again.
The Hospital continues to claim no liability in the incident that almost cost our 2 week old daughter her life. Since she survived and has no recognizable brain damage the hospitals position is “no harm no foul.“ Malpractice laws disagree.
Last year the Department for Health and Human Services requested that all healthcare providing agencies report any hospitalizations, ER visits, and deaths following vaccinations. The report is to be filed with the Centers for Disease Control.
My wife and I gave an ORHC doctor the document to be filled out and submitted.
It was never done.
I contacted the Centers for Disease Control and filed the document.
*The CDC is now investigating the incident as a possible adverse reaction to the vaccine.
There are over 200,000 reports every year of possible vaccine reactions in children.
Over the past month there have been many reports regarding vaccine reactions in the mainstream press.
As of July 25, 2005 the Hospital position: “Based upon the information available to us, including literature which disputes the claim that adverse affects occur with childhood immunizations, and no additional claim of present injury to the child it does not appear that a financial settlement, of any amount, is warranted under the circumstances.”
On April 20, 2005 I rushed my 2 week old daughter to the ER because she was not breathing.
One of the possible adverse effects of Hepatitis B vaccines is AIRWAY OBSTRUCTION.
I encourage both the medical community and there patients to become more educated in the risks associated with the treatments that are provided.
***FIRST DO NO HARM!
Dr. Charles D. Coram