Paying illegal kickbacks to doctors: just the cost of doing business for Big Pharma?

The drug company Novartis has agreed to pay $422.5 million in criminal and civil penalties for promoting illegal use of its epilepsy drug Trileptaland five other Novartis drugs, the U.S. Department of Justice announced recently. The cases charged the company with promoting off-label use of Trileptal for medical conditions it had not been tested or approved to treat, and also for its illegal targeted marketing efforts.

The marketing efforts that prosecutors took exception to included paying kickbacks to physicians to encourage them to prescribe more of these drugs.

Now, that word kickbacks is a loaded word, and one that I’d imagine the docs who have been accepting this drug money would not likely ever use themselves.  

The kickbacks specifically mentioned in this case included payments to physicians for agreeing to speak to their peers as part of the drug company’s speaker programs, advisory board memberships, entertainment, travel, and meals  – all specifically to encourage doctors to prescribe Trileptal and five other Novartis drugs: Diovan, Exforge, Tekturna, Zelnorm, and Sandostatin.

The civil settlement resolves lawsuits filed by four whistleblowers under the federal False Claims Act, which lets private citizens sue on behalf of the government.

Court documents reveal that in January 2000, the FDA had approved Trileptal for the treatment of partial seizures in people with epilepsy. But when sales of Trileptal did not meet expectations, Novartis decided to re-launch the drug to market Trileptal for the unapproved uses of neuropathic pain and bipolar disease, and profited from this off-label campaign by hundreds of millions of dollars.

“Novartis knew that the populations suffering from (neuropathic pain and bipolar disease) greatly outnumbered the population of epileptics in the United States. Novartis thus decided to compete for the off-label markets of bipolar disease and neuropathic pain.”

According to Cole Petrochko‘s report on MedPage Today, Novartis then directed its sales staff to call on doctors who treated bipolar disease and neuropathic pain, in particular psychiatrists, neurologists and pain doctors. Novartis trained its sales staff in off-label diseases, and provided them with studies and materials to distribute to doctors about those off-label uses. In effect, sales representatives could only meet their company sales goals by promoting Trileptal off-label. Novartis also used Continuing Medical Education (CME) programs and Advisory Boards to advance its off-label sales.

This re-launch was successful, and sales increased significantly in the psychiatric and pain markets.

But what Novartis sales reps were not sharing with physicians on their payroll was that clinical studies in the 1990s had failed to show that Trileptal was effective for bipolar disease, and when Novartis undertook clinical studies to test the efficacy of Trileptal for neuropathic pain, those tests also failed to show positive results.

Novartis joins the lofty ranks of other major pharmaceutical companies who’ve been charged with illegally marketing drugs for off-label use. For example:

1.  Forest Laboratories Inc. agreed to plead guilty and pay $313 million in a whistleblower case over its Levothroid thyroid drug.

2.  Allergan Inc. agreed to plead guilty and pay $600 million to resolve civil and criminal probes over its drug Botox.

3.   AstraZeneca was fined $520 million for allegedly misleading both doctors and patients about the safety of its anti-psychotic drug Seroquel, downplaying the known risks of weight gain and diabetes.

4.  Eli Lilly paid $1.4 billion to settle probes into its promotion of its anti-psychotic drug Zyprexa, including a $515 million criminal fine.

5.  The Big Daddy of all drugmaker penalties, Pfizer agreed to pay $2.3 billion including a $1.3 billion criminal fine (the biggest in U.S. history) for illegal marketing of the painkiller Bextra, psychiatric drug Geodon, antibiotic Zyvox and epilepsy drug Lyrica.

As part of the most recent Novartis plea agreement, the company – like AstraZeneca was forced to do with its Seroquel criminal case – signed a corporate integrity agreement with the Department of Health and Human Services that promises the company will:

  • undergo annual third-party compliance review
  • issue a letter to health care professionals notifying them of the settlement
  • provide information on its website about all future payments made to physicians.

Here’s the threat for breaching this agreement: serious breach could result in exclusion of the company from Federal health care programs, the Justice Department statement said.

And that line, buried near the bottom of the Justice Department’s statement, holds the key to stopping these criminal activities once and for all:  if they really wanted to stop them, why don’t government agencies threaten real consequences (like being excluded from government-run health care funding)?

Meanwhile, Andy Wyss, president of Novartis Pharmaceuticals, said in one of those brilliantly obtuse corporate-speak blahblahblah statements:

“Novartis will continue its commitment to high standards of ethical business conduct and regulatory compliance in the sale and marketing of our products.”

Which, roughly translated, means that these penalties are merely the cost of doing business.

Find out more about the $422 million penalties charged against Novartis, and wonder along with me why senior management at Big Pharma has managed to avoid facing criminal charges for any of this marketing fraud.

Or learn about how easy it can be for an otherwise decent doctor to get seduced into taking kickbacks from Big Pharma in Dr. Daniel Carlat‘s essayMy 1-Year Career As a Wyeth Drug Rep, or how the Novartis Stable of Big Name Athletes Lures Docs To Drug Dinners, or about AstraZeneca market strategies for pushing its drug Seroquel in What Drug Reps Wrote in Their BlackBerries.

See also:

7 thoughts on “Paying illegal kickbacks to doctors: just the cost of doing business for Big Pharma?

  1. “…kickbacks included payments to physicians for agreeing to speak to their peers as part of the drug company’s speaker programs, advisory board memberships, entertainment, travel, and meals – all specifically to encourage doctors to prescribe Trileptal and five other Novartis drugs…”

    Despite doctors’ insistence that these payments are not “kickbacks” – what an unattractive word! – taking money from corporations for helping to sell more of that corporation’s products means kickbacks, pure and simple. Wake up Doctors!

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    • I absolutely agree, Quinn. Drug companies are not paying these doctors out of the goodness of their hearts, but because such “kickbacks” work in driving up brand name drug sales. Thanks for this – love your website!

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  2. If Novartis did indeed “direct its sales staff to call on psychiatrists, neurologists and pain doctors” to try to boost sales of their epilepsy drug, that seems like a simple no-brainer to me. These big drugmakers act as if normal legal marketing protocols and appropriate drug approvals do not apply to them at all.

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  3. Pingback: Medicine Blog

  4. “Kickbacks” = not the word doctors would prefer to use at all to describe the cash they’re willing to accept from their Big Pharma employers. That list of companies and their legal penalities is shocking. Yet doctors apparently see nothing wrong with this widespread practice? SHAME on you, doctors.

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