October 30, 2015

DOJ Catch Of The Week — Warner Chilcott

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to Warner Chilcott US Sales LLC, a subsidiary of pharmaceutical manufacturer Warner Chilcott PLC.  Yesterday, the company agreed to plead guilty to a felony charge of health care fraud as part of a global settlement in which Warner Chilcott agreed to pay $125 million to resolve its criminal and civil liability arising from illegally marketing the drugs Actonel, Asacol, Atelvia, Doryx, Enablex, Estrace and Loestrin in violation of the False Claims Act and Anti-Kickback Statute.  See DOJ Press Release.

The government charged that between 2009 and 2013, Warner Chilcott paid physicians to induce them to prescribe Warner Chilcott drugs.  Specifically, the government claimed Warner Chilcott employees, at the direction of company management, provided payments, meals and other remuneration associated with so-called “Medical Education Events,” which included dinners, lunches and receptions.  These events, which were often held at expensive restaurants, often contained minimal or no educational component and were instead used to pay prescribing physicians to gain a competitive advantage over other companies.

The government further alleged that from 2011 to 2013, Warner Chilcott employees submitted false or misleading prior authorization requests and other coverage requests to federal health care programs for the osteoporosis medications Atelvia and Actonel.  The false information was provided to overcome formulary restrictions that favored less expensive osteoporosis drugs.  According to the government, Warner Chilcott sales representatives filled out numerous prior authorizations for Atelvia, using “canned” medical justifications which often were inconsistent with the patients’ medical conditions.  The government claimed that in some instances, sales representatives submitted these prior authorizations directly to insurance companies, holding themselves out to be physicians.  In other cases, sales representatives allegedly coached physicians and staff about which medical justifications would result in an approved prior authorization, whether or not they were true for a particular patient.

Finally, the government claimed Warner Chilcott employees were instructed by members of the company’s management team to make unsubstantiated superiority claims when marketing the drug Actonel.  According to the government, sales representatives told physicians that Actonel was superior to other bisphosphonates due to its supposedly unique “mechanism of action.”  They did so even though the claim was not supported by clinical evidence.

In announcing the settlement, the government stressed the importance of “protecting the integrity of physician prescribing decisions and ensuring that financial arrangements in the healthcare marketplace comply with the law.”  Benjamin C. Mizer, head of the Justice Department’s Civil Division, said the DOJ “will continue to hold companies and responsible individuals accountable when they use improper incentives, like those alleged here, to promote their products.”  US Attorney Carmen M. Ortiz for the District of Massachusetts echoed this sentiment.  “Doctors’ medical judgment should be based on what is best for the patient, and not clouded by expensive meals and other pharmaceutical company kickbacks.”  General Daniel R. Levinson of the U.S. Department of Health and Human Services was even more firm in his message: “Placing financial gain above the legitimate needs of patients is deplorable [and] will not be tolerated.”

In addition to the company’s guilty plea and civil settlement, several company executives were criminally charged or pleaded guilty to various offenses related to the company’s alleged misconduct.   Two former district managers, Jeffrey Podolsky and Timothy Garcia previously, pleaded guilty to various charges, including conspiracy to commit health care fraud and violations of the Health Insurance Portability and Accountability Act (HIPAA).  A third former district manager, Landon Eckles, was criminally charged earlier this month for alleged HIPAA violations.  Last week, Springfield, Massachusetts physician Rita Luthra was charged with accepting free meals and speaker fees from Warner Chilcott in return for prescribing its osteoporosis drugs.  And yesterday, former Warner Chilcott President W. Carl Reichel was charged with one count of conspiring to pay kickbacks to physicians.

The allegations first arose in a whistleblower lawsuit by two former Warner Chilcott sales representatives filed under the qui tam provisions of the False Claims Act.  The whistleblowers will receive a whistleblower award of approximately $22.9 million from the federal share of the civil recovery.

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