Saturday, January 15, 2011

Pharma data-mining company IMS announces it is acquiring its rival SDI

IMS Health, Inc. just announced that it is acquiring SDI.  Below is the media statement.  These are turbulent times for companies like IMS.  As reflected in the post below, the U.S. Supreme Court agreed to take a case in which the State of Vermont seeks to prohibit companies such as IMS from collecting and selling "prescriber-identifiable data."  Such data-mining identifies doctors, links the doctor to a particular prescription, and reveals other details about that prescription.  Often, pharma companies use this information to determine whether the off-label marketing techniques are working. 

IMS Stmt (Acquiring SDI)                                                            

Supreme Court agrees to hear pharma data-mining case

After several years of courtroom battles, the U.S. Supreme Court granted cert to decide whether a state can ban data mining (i.e., tracking the sale of prescription drug information that identifies prescribers and patients for commercial marketing purposes). 

Below are the briefs for the State of Vermont (petitioner), IMS Health, Inc. (respondent), and the Pharmaceutical Research and Manufacturers of America (amicus).   

Some pharma companies use data-mining to track whether their off-label marketing techniques are effective.  It will be interesting to see whether the U.S. Attorney General and other state attorneys general file briefs.  Stay tuned, this is a very important case for health care fraud.  

Here is the State of Vermont's brief:
Vermont Cert Petition - Sorrell v IMS Health Dec 10                                                            
Here is IMS Health, Inc.'s brief:

IMS Response to Vermont Cert Petition Dec 10                                                            

Here is PhRMA's amicus brief:

PhRMA Response to Vermont Cert Petition Dec 10                                                            


Tuesday, January 11, 2011

Over the past 20 years, the pharma industry has paid over $20 billion in penalites

The study below is fascinating.  The main findings are:

  • Of the 165 settlements comprising $19.8 billion in penalties during this 20- year interval, 73 percent of the settlements (121) and 75 percent of the penalties ($14.8 billion) have occurred in just the past five years (2006- 2010).
  • Four companies (GlaxoSmithKline, Pfizer, Eli Lilly, and Schering-Plough) accounted for more than half (53 percent or $10.5 billion) of all financial penalties imposed over the past two decades. These leading violators were among the world’s largest pharmaceutical companies.
  • While the defense industry used to be the biggest defrauder of the federal government under the False Claims Act (FCA), a law enacted in 1863 to prevent defense contractor fraud, the pharmaceutical industry has greatly overtaken the defense industry in recent years. The pharmaceutical industry now tops not only the defense industry, but all other industries in the total amount of fraud payments for actions against the federal government under the False Claims Act.
  • The practice of illegal off-label promotion of pharmaceuticals has been responsible for the largest amount of financial penalties levied by the federal government over the past 20 years. This practice can be prosecuted as a criminal offense because of the potential for serious adverse health effects in patients from such activities.
  • Deliberately overcharging state health programs, mainly Medicaid fraud, has been the most common violation against state governments and is responsible for the largest amount of financial penalties levied by these governments. This type of violation is also the main factor in the considerable increase in state settlements with pharmaceutical companies over time.
  • Former pharmaceutical company employees and other “whistleblowers” have been instrumental in bringing to light the most egregious violations and have been responsible for initiating the largest number of federal settlements over the past 10 years. From 1991 through 2000, qui tam (whistleblower) cases made up only 9 percent of payouts to the government, but from 2001 through 2010, they comprised 67 percent of total payouts.

Below is the study.

Penalties Against the Pharmaceutical Industry- 1991 to 2010                                                            

Former GSK counsel blaming her outside counsel

The post below reveals how DoJ is prosecuting former GSK in-house counsel Lauren Stevens for obstruction of justice.  It appears that Stevens is pointing the finger at GSK's outside counsel.  But DoJ will have none of that.  Below is the motion filed by DoJ seeking to preclude Stevens from putting on an "advice of counsel" defense.

Here is the DoJ motion.

DoJ Motion to Preclude Advice of Counsel Defense                                                            

Former GSK general counsel indicted for obstruction of justice

The Department of Justice is prosecuting a former associate general counsel of GlaxoSmithKline for obstruction of justice and falsification of documents.  The FDA was investigating GSK's promotion of certain drugs for off-label uses.  As alleged in the Indictment, "Stevens was the Vice President and attorney at [GSK], who was in charge of [GSK's] response to the FDA's inquiry and investigation."  In that capacity, the DoJ alleges Stevens thwarted the Government's investigation, in violation of 18 U.S.C. §§2, 1512, & 1519.

Here is the Indictment.

Stevens Indictment                                                            

Monday, January 10, 2011

The Future of the Military Health Care System

Secretary Gates recently announced the Department of Defense will be seeking ways to cuts its budget.  The costs for providing health care to the military continue to climb at a higher rate than other costs.   More importantly, the report outlines how the military can and will seek to control its health care costs.  Fraud is a major reason why costs continue to increase.  Many of my qui tam cases involve providers committing fraud against TRICARE.  We have also seen first hand how some crooked soldiers enroll their friends and distant relatives into DEERS (which makes them eligible for TRICARE benefits), despite their ineligibility.  As it relates to the military, health care fraud is truly a national security issue because it misallocates money from the troops to fraudsters. 

Below is the report.

Tricare Report Dec. 2007                                                            

Sunday, January 9, 2011

Slides for my presentation at the Texas Bar Advanced Employment Law Course

Here are my slides for my presentation at the Texas Bar Advanced Employment Law Course, live in Austin.

Hargrove - SBOT 2011

My article for the State Bar's Advanced Employment Law Course

Below is the article I will present at the Texas Bar's Advance Employment Law Course.

SBOT (Hargrove - Article)

Article about pharma whistleblower's experience

The New England Journal of Medicine published a fascinating article about the experiences of whistleblowers who blew the whistle against pharmaceutical companies. (The article is below.) The article confirms what relator counsel have always know: almost all such whistleblowers blow the whistle for safety reasons. For example, the article reveals that a large percentage of whistleblowers reported they finally stepped forward after "the autopsy reports" showed the deadly side effects of the off-label uses of FDA-approved drugs but the company refused to fix the problem.

Here is the article:

NE Engl J Med (May 2010)