Doctor Chides Medical Societies to Take Action – GSK Fined $150 Million in Medicare Fraud

Wed, 21 Sep 2005

The latest in a series of fraud settlements, GlaxoSmithKline has agreed to pay $150 million to settle fraud allegations over inflating price of Zorfran and Kytril (nausea drugs) when billing Medicare and Medicaid. In May 2004, Pfizer admitted criminal guilt in marketing neurontin, and paid a $430 million settlement.

The Civil Division of the Justice Department said that more than 500 drugts were under investigation last year for pricing and marketing practices.

Below, Bernard Carroll, MD, professor emeritus, former chairman of psychiatry at Duke University, chides the medical professional societies and associations to use their “hammer” to restore medical ethics. Dr. Carroll suggests what should be a “no brainer”: he urges medical societies to “disengage from corporations that flout their commitments and abuse public trust. Corporations that receive adverse court rulings with financial penalties, regulatory fines, cease-and-desist orders for false advertising, and that pay millions of dollars in plea bargained settlements have so far been immune from the consequences of these ethical failures.”

“we are viewed unfavorably for our increasingly publicized reliance on corporations, not because these relationships are intrinsically unethical but because the profession has no record of taking action against corporations that are found to be crooked.”

“Our medical societies have every right and, I believe, the duty to terminate or suspend their association with corporations that receive criminal judgments or adverse regulatory rulings or that agree to judicial settlements for negligence, violations of good manufacturing practice, fraud, misrepresentation, and suppression of scientific data in the interest of marketing.”

Dr. Carroll’s proposition is one that the medical profession canot afford NOT to take–

Contact: Vera Hassner Sharav
212-595-8974

http://www.usatoday.com/money/industries/health/drugs/2005-09-20-glaxo-fraud_x.htm

GlaxoSmithKline pays $150 million in Medicare fraud case
By Mark Sherman, Associated Press

WASHINGTON – GlaxoSmithKline (GSK) has agreed to pay more than $150 million to settle fraud allegations over the pricing of two anti-nausea drugs for federal health programs, the Justice Department said Tuesday.

The pharmaceutical maker inflated the price of Zofran and Kytril for the federal Medicare and Medicaid programs, which reimburse health care providers based on the manufacturers’ prices, the government said. The drugs are used mainly to counter nausea brought on by chemotherapy and radiation.

But the company charged health care providers less for the drugs, knowing that the providers would get to pocket the difference, the Justice Department said.

GlaxoSmithKline, a British company with U.S. headquarters in Research Triange Park, N.C., and Pennsylvania, admitted no wrongdoing as part of the settlement. “We believe that our price reporting was lawful and was done in good faith, but we’ve agreed to this settlement to avoid the delay, expense and uncertainty of litigation,” said Mary Anne Rhyne, a company spokeswoman. It is the latest in a series of fraud settlements with major drug manufacturers that reap millions of dollars from the federal programs.

James Moorman, president of the advocacy group Taxpayers Against Fraud, said whistle-blower claims have so far resulted in $2.4 billion in settlements with drug companies.

Peter Keisler, assistant Attorney General in charge of the Justice Department’s Civil Division, said last year that the pricing and marketing of more than 500 drugs were under investigation. The GlaxoSmithKline settlement is the first announced this year.

The government opened an investigation into the drugs’ pricing after Ven-A-Care of the Florida Keys, a small home-infusion company, filed a whistle-blower lawsuit that first raised the allegations. The company and its principals will receive $26 million from the settlement, as allowed under the federal False Claims Act, the Justice Department said.

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Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Health Care Renewal
Tuesday, September 20, 2005
Medical Societies, Corporations, and Ethics
By Bernard Carroll MD
[posted with his permission]

Discussion of Pharma influence at medical society meetings often overlooks the real but unused power of physicians to make changes happen. No one would argue with the need for increased attention to our corporate relationships and to transparency. Few would argue, either, for a radically new relationship that involved severing ties between professional medical societies and industry.

Nevertheless, we are viewed unfavorably for our increasingly publicized reliance on corporations, not because these relationships are intrinsically unethical but because the profession has no record of taking action against corporations that are found to be crooked. For example, the drug industry has been censured for reneging on pledges to list clinical trials in a federal database, with Merck, GlaxoSmithKline and Pfizer being singled out as recalcitrant corporations. A New York Times editorial concluded, “the best hammer would be federal legislation.. with stiff penalties for noncompliance.”

Physicians and professional medical societies have an alternative “hammer” that they have never used: disengagement from corporations that flout their commitments and abuse public trust. Corporations that receive adverse court rulings with financial penalties, regulatory fines, cease-and-desist orders for false advertising, and that pay millions of dollars in plea bargained settlements have so far been immune from the consequences of these ethical failures. They continue to have unimpeded access to professional medical groups. The professional societies maintain a double standard, indulging crooked corporations in ways that do not apply to individual members. The by-laws of professional medical associations provide for the censure and expulsion of individual members who fail to act in accordance with ethical codes. Sufficient cause for such adverse action can include clinical or scientific fraud, as well as criminal conduct that need not be related to a member’s clinical practice or professional work. Any felony conviction, for example, will result in termination of membership in most professional medical societies. The corporations that enjoy access to our professional organizations are immune from similar treatment.

In some medical societies, companies pay for the status of Supporting Corporations. These corporations and their designated liaison employees are prominently listed, along with company descriptions (infomercials), in membership directories. Supporting corporations typically send several employees to the annual meetings, where many deals are struck for clinical trials, research projects, educational programs, and professional consulting, accompanied by much wining and dining. In giving their support, the corporations are not motivated by altruism. They are buying access. Likewise, many professional medical societies sponsor huge exhibit halls at their annual conventions, with lavish, high-tech displays operated by pharmaceutical corporations. These events are unparalleled opportunities for the corporations to influence practitioners and “thought leaders.” The corporations also support continuing medical education symposia at the conventions through “unrestricted educational grants”, while having every confidence that featured speakers are “on message.”

Our medical societies have every right and, I believe, the duty to terminate or suspend their association with corporations that receive criminal judgments or adverse regulatory rulings or that agree to judicial settlements for negligence, violations of good manufacturing practice, fraud, misrepresentation, and suppression of scientific data in the interest of marketing. That would send a powerful message from us to back up any legislative hammer. A 5-year suspension-of-access period per incident would get the attention of the corporations more than the penalties typically negotiated by Pharma with regulators. Likewise, individual academic physicians could send a powerful message by resigning from the advisory boards and speaker panels of corporations that receive judicial and regulatory penalties.

When academic physicians and professional medical societies simply shrug off these corporate behaviors, they collude in the cynicism of the corporations, for whom the monetary penalties, that may run to hundreds of millions of dollars, are viewed as just part of the cost of doing business.

The fundamental issue in this evolving scandal is the distinction between professional and commercial ethics. As the sociologist Jane Jacobs observed, the most rudimentary civic morality is the line between these two. Physicians have to understand that when they work in the service of the public or as advocates for patients, they cannot also be in service to clients who seek to influence legislation or regulatory decisions or who simply want to maximize profits.

Many professional medical organizations have tried to straddle this line, using predictable rationalizations such as money for operations, expanded educational programs, and strategic inclusiveness. The straddle has become increasingly uncomfortable, however, and the professional societies would do well to reassert their independence by treating corporations as they would treat any individual member who violates ethical and criminal codes. There is no reason for the professional medical societies to give multi-billion dollar corporations a pass on ethics. As the saying goes, when you sup with the devil, use a long spoon.

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