Abbott Pays $41M Over Off-Label Marketing
7 CommentsBy Ed Silverman // December 7th, 2010 // 6:21 pm
Could this be a record? Earlier today, Abbott Laboratories agreed to pay $126.5 million to settle charges of deliberately misreporting pricing info in order to hike reimbursements from Medicare and Medicaid (see this). A few hours later, Abbott agreed to pay $41 million to resolve criminal and civil charges that its Kos Pharmaceuticals unit engaged in kickbacks and off-label marketing; the deal also involves a deferred prosecution agreement.
More than $38 million will cover civil allegations that Kos offered and paid illegal kickbacks to doc, other medical professionals, physician groups and managed care companies in the form of money, free travel, grants, honoraria and other goodies to persuade them to prescribe or recommend the Niaspan and Advicor cholesterol drugs.
For instance, two docs proposed endorsing the meds in exchange for a series of payments. Between January 2002 and June 2006, one doc wrote 4,130 prescriptions, and the feds says some were paid for by Medicare and Medicaid. From 2002 to 2004, Kos paid the doc or an intermediary in the form of a sponsorship of continuing medical education classes conducted by the doc as well as speaking fees. For this, Kos is paying a $3.36 million criminal fine.
At the same time, the feds say Kos promoted Advicor as a first-line therapy for management of mixed dyslipidemias, which was never approved by the FDA or accepted as indication by Medicaid. And so the federal share of the civil settlement is $33.7 million and $4.4 million goes to state Medicaid programs (read the settlement here, the criminal information sheet and the statement from the US Department of Justice).
Searching2000
Ten years ago part of the talk around “The Park” was that highest management wanted to reach the same pinacle as a certain global healthcare provider headquartered in New Brunswick, NJ. If the recent number of major negative stories is a valid metric, then you can argue that they have arrived.
Commercial Critic
The fine is a drop in the bucket! No wonder this Chicago company keeps doing it over and over and over again!
industry insider
This is what is called The Cost of Doing Business. Most or all of these violations occured prior to the Kos acquisition. Being ex Abbott and knowing that they have pretty good lawyers, I’m pretty sure that this issue came up during due diligence. I’m equally sure that the calculation was made that whatever fines might emanate from these products would be dwarfed by the sales of these products.
Justice in MI
Insider–Honest question. Let’s say a certain number of pts were rx’d Advicor when they might have been given a drug approved for dyslipidemia and–postulate this–had better hard outcomes in M&M.
When a company thinks through the “costs of doing business,” do such considerations enter into the thinking of relevant decision-makers. Not asking about Abbott specifically, but about your sense of how things work in general.
As above, genuine and honest question.
industry insider
JiM. Let me answer your question this way. If you walk into a corporate lawyer’s office, especially in today’s litigious society, you are likely to find nary a scrap of paper. Think about all of the e-mail paper trails that have landed folks in big time hot water. Issue discussed, issue resolved, case closed, no documentation. To be sure, such meetings are never held on the corporate campus, but rather in remote locations where the conference rooms can be pre-swept for bugs and security tightly controlled. This is also how it’s done in the world of corporate collusion and price fixing.
Does this sound paranoid? If your career and possibly a prison term is the alternative, than not at all if you look at it from the perspective of the players involved.
Stephanie
Searching2000, great comment! So sad so true.
Searching2000
While this is “Pharma”-lot and not ‘device, the news on 22 DEC of the ABT Diabetes test strip recall underscores my earlier comment.
http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm237900.htm
Recalling 359 Million glucose test strips certainly rivals that ‘global pharma from New Brunswick’ recalling multile-millions of tablets. When I suggested that - partially in jest - to one of their senior compliance people late yesterday that this attempt to equal ‘that NJ company’ was a bit much, the reply was “With the hundred million-plus dollars we lost on the Similac recall, we have exceeded them.”