Company facing huge fines in
prostate cancer drug case
BOSTON -- May 29, 2001
(Cancer Digest) -- The maker of a commonly prescribed prostate
cancer medicine may be facing the largest fines ever levied for
health fraud according to reports in Monday's Boston Globe and
the Associated Press.
In a copyrighted story,
the Globe disclosed that TAP Pharmaceuticals is negotiating with
the U.S. Attorney's office to settle federal allegations that
it used taxpayer's funds to bribe doctors to prescribe the drug
Lupron Depot, a hormone blocking drug, and artificially inflated
its price
TAP, which has not
been charged with any crime, is nonetheless expected to pay the
government what could be the largest fine ever in a federal health
fraud case, topping the $840 million paid last year by the hospital
company HCA.
At the same time patients
who were prescribed the drug have filed a class action lawsuit
against the company alleging the company's inflated prices resulted
in millions of dollars of overcharges.
Court documents charge
that the company bribed individual doctors with as much as $70,000
in free drug samples, for which the doctors then billed Medicare
and the patients. The company also allegedly offered an unnamed
health maintenance organization in Massachusetts $65,000 in an
effort to get it to switch from using a competing drug.
In addition, the government
accused TAP of controlling the average price used for government
reimbursement to ensure doctors would make at least a $100 per
dose.
The Globe quoted Jeffrey
Kodroff, lead attorney for the class action suit filed this month
in US District Court, Boston as saying, ''It's a ripoff of Medicare
and the patients who paid their 20 percent co-payments.''
Kim Modory, a spokeswoman
for the Illinois-based company, declined comment on the class
action suit or the company's marketing practices, but confirmed
TAP was negotiating a settlement with the US attorney's office.
''The discussions in
the investigation are ongoing,'' she told the Globe reporter,
''TAP conducts its business ethically.''
The US attorney's office
declined to comment.
The alleged scheme
involved physicians from across the country, including a Connecticut
doctor who allegedly used his patients as bargaining chips to
get bigger kickbacks from TAP, switching them back and forth
between Lupron and a less-expensive drug made by another company.
The doctor, Joseph Spinella of Bristol, pleaded guilty in March
to conspiring to receive kickbacks.
Lupron has been on
the market since 1985, when it was approved by the Food and Drug
Administration for prostate cancer as an alternative to removal
of the testicles. The drug is injected by doctors into the arm
muscle or buttocks once a month or once every three or four months,
often for the remainder of the patient's life. In subsequent
years, the drug was also approved for use against endometriosis,
uterine fibroids, and early puberty.
Medicare, the federal
health program that insures the elderly, paid billions of dollars
over the past decade for Lupron. The drug is a hormone injection
that blocks the body's production of testosterone and helps halt
the progression of prostate cancer.
Some government investigators
believe Medicare paid at least $100 million a year more than
it should have from 1993 to 1998. Authorities are also investigating
whether Medicaid, the state-federal health insurance program
for the poor, overpaid as well.
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