I guess nobody much cared about the food that night.
According to a whistleblower lawsuit filed by a former manager at pharmaceutical
manufacturer Cephalon, at a 2008 sales launch meeting the company passed
out cash – literally. The suit, which is filed under the False Claims
Act (“FCA”), says that the meeting was designed to encourage
employees to sell two drugs – Treanda and Fentora. To make the point
that selling prescription drug Treanda would be very profitable for the
sales reps, the company hired waiters to pass trays of $50 bills during
dinner. A Cephalon VP told the sales representatives to grab handfuls
of the bills as the waiters passed by, explaining that they could earn
huge bonuses by selling Treanda – which would be just like “taking
According to a pharmalot article,
How to Motivate Off-Label Promotion? Give
Reps Trays of $50 Bills, the FCA lawsuit claims that Cephalon projected $500 million in sales
for Treanda in the next year — a figure that would be impossible
unless the drug was sold for off-label uses.
While $50 bills certainly beat rubber chicken or meatballs-on-a-stick,
the VP’s reported comment about “free money” beg the
question. Free – to whom? Prescription drugs are not free to the
people who take the drugs, or to their insurance companies — and
the pharmaceuticals certainly are not free to U.S. taxpayers. In 2010,
Medicare spent 12% of its entire budget on prescription drugs under the Part D program – a whopping $62.0
billion in all.
I would be willing to bet that the VP submitted an expense claim for those
$50 bills that the waiters offered to the sales representatives. After
all, those bills weren’t free to him – just like drugs are
not free to those who ultimately pay for them.
Spending money on necessary pharmaceutical drugs is one thing. A
Congressional Budget Office Report argues that spending on prescription drugs actually saves money because
it decreases spending in other medical areas. But nobody can justify spending
money on prescription drugs that are not necessary or don’t work.
Those drugs can’t help the patients, and unlike the platters of
$50 bills, they certainly are not free.
Treanda is approved by the FDA to treat chronic lymphocytic leukemia. According
to the lawsuit, the company decided it would profit by marketing Treanda
for indolent non-Hodgkin’s lymphoma, even though the medication
was only approved as a second or third-line treatment for the disease.
To push the drug as a frontline treatment, the company relied on a German
study by a consultant hired by Cephalon. The False Claims Act lawsuit
says that the company executives believed that there were significant
problems with the German study, but decided to hide the problems and push
the drug, anyway.
The FCA lawsuit also alleges that the company encouraged offlabel marketing
of a drug called Fentosa, which is a painkiller.
Cephalon paid $425 million to resolve allegations of Medicaid fraud in
2008. The claims had been made in another whistleblower lawsuit filed
by a Philadelphia sales rep. The Philly sales rep alleged that the company
was pushing off-label marketing for three other drugs: Actiq, Gabitril
and Provigil. The Government resolved those FCA claims for $375 million
to address the overpayments by Medicaid, plus a $50 million payment for
a corporate criminal plea.
Teva Pharmaceutical now owns drug maker Cephalon.