I guess they were going for creativity points.
I am an attorney who represents whistleblowers in lawsuits, and so I follow
qui tam and False Claims Act cases very closely. I am used to seeing cases
where a pharmaceutical company has offered enticements to doctors to try
to get them to prescribe the company’s drugs. But when pharmaceutical
company Victory Pharma, Inc. wanted to sell more of its prescription drugs,
it did not settle for your everyday, ordinary kickbacks. Instead, the
company got creative, offering a variety of “gifts” ranging
from lap dances for a doctor’s female staff, to trips, to mortgage payments.
The creativity is costing the drug manufacturer, though.
Victory Pharma has agreed to pay the federal government $11.4 million to resolve allegations that
the company used improper means to try to get doctors to prescribe its
drugs. Victory Pharma has agreed to pay $1.4 million to settle Stark Act
(Anti-Kickback) allegations, and another $9,938,310 in order to resolve
claims filed under the False Claims Act.
The settlement came thanks to a False Claims Act suit filed by whistleblower
Chad Miller. Miller was a sales representative for Victory, and he went
to the Government to report what he learned while he was working for the
drug company. Miller alleged that Victory Pharma was paying kickbacks
to doctors to convince them to write prescriptions for four of its products:
Naprelan, Xodol, Fexmid and Dolgic.
The Medicare regulations strictly prohibit any type of payment intended
to entice a doctor to prescribe a drug. The reason is pretty obvious:
it just can’t be good to encourage a doctor to prescribe a drug,
or a particular drug, for money. Drugs can have dangerous side effects
for patients. Furthermore, pharmaceuticals are expensive for Medicare,
and often for patients, too. Obviously a drug only should be prescribed
when it is necessary, and when it is the best possible drug for a particular patient.
According to the qui tam lawsuit, some of the kickbacks were fairly ordinary
gifts, such as tickets to sporting events, plays and concerts; spa passes;
golf and ski outings; and fancy dinners. But some of the kickbacks were
more unusual, like “giving a doctor money to help make a house payment;
paying for a doctor’s staff’s outing to a strip club, including
‘lap dances’ for the female staff; and offering a doctor and
his staff an all-expense paid trip to Las Vegas.”
Under the False Claims Act, a whistleblower is entitled to between 15%
and 25% of what the Government gets. In this case, Mr. Miller is going
to receive $1.7 million for his part in reporting the fraud and helping
the Government recover its money.
Naprolen is a non-steroidal drug prescribed to relieve pain and inflammation
of arthritis, tendinitis, etc.
Xodol is an opioid pain reliever that combines acetaminophen and hydrocodone.
Fexmid, also known as cyclobenzaprine, is a muscle relaxant.
Dolgic, a combination of acetaminophen and butalbital, is used to relieve
The Medicare regulations recognize that any time a pharmaceutical company
tries to influence a doctor’s choice about whether to prescribe
a drug and what drug to prescribe, the drug company is interfering with
the relationship between the doctor the patient, and may be causing the
patient to get less objective medical help than he otherwise would have
received. That rationale applies with any drug, of course. In this case,
though, I am particularly appalled by the company’s use of kickbacks
to persuade doctors to prescribe Xodol, because that drug is an opioid
and is potentially addictive for patients. It appears that Fexmid also
can be addictive. The frightening thing to me is that patients may have
been put on addictive drugs as a result of these kickbacks.
I know that many of the doctors involved would argue that, even if they
did receive kickbacks, they were making objective decisions about the
drugs when they prescribed them to their patients. However, I think it
would be the rare patient who would accept that argument coming from a
physician who just accepted a house payment from the drug’s manufacturer.
I can imagine that any patient who received one of these drugs and learned
that the doctor was taking kickbacks from the drug company would feel
betrayed. In the end, the reason why the kickback statute is so important
is that the doctor/patient relationship can only work when the patient
trusts the doctor will give him the medical care that the doctor truly
believes is best for him.