Pharmaceutical companies that get convicted of crimes are still allowed to do business with the U.S. government? How does that work?

Seven years ago, Lee Chartock, a psychiatrist in South Weymouth, Mass., got a visit from a drug saleswoman offering to pay his expenses to an “advisory meeting” in Boca Raton, Fla.

There, hucksters encouraged him and other attendees to prescribe the drug Zonegran, approved by the Food and Drug Administration (FDA) as one of several medications to treat epilepsy seizures in adults. That small market wasn’t growing. But physicians had been paid up to $1,250 to attend Florida sessions where they were encouraged to increase the drugs’ sales by prescribing it “off-label” as a diet pill, to treat mood disorders, and for epilepsy in children.

Back in Massachusetts, the saleswoman offered to pay him to give speeches on behalf of the drug’s maker, an Irish firm with R&D and other operations headquartered in South San Francisco called the Elan Corporation.

Chartock declined. Instead he filed a federal whistle-blower complaint describing an illegal marketing scheme by Elan to market Zonegran for “off-label” uses.

On Dec. 15, the Justice Department announced that Elan would pay criminal and civil penalties totaling more than $200 million. As part of a legal settlement, Elan signed a so-called corporate integrity agreement, designed to ensure it doesn’t repeat this kind of practice. For the next five years, it will employ a “compliance committee” and regularly report back to the government on whether employees are breaking the law.

U.S. Attorney General Eric Holder said in a Dec. 16 speech that the cash settlement and the agreement were examples of how the Obama administration is “fighting back in bold, innovative ways” against health care fraud.

“Ironic” might be a word more apt than innovative. That’s because, when it comes to pharmaceutical companies, the federal government’s antifraud strategy has itself smacked of flimflam.

Elan is one of hundreds of entities under corporate integrity agreements requiring them to audit their own behavior under the supervision of the U.S. Department of Health and Human Services. Such negotiated deals have quietly become America’s preferred method of battling criminal activity in Big Pharma, the largest source of documented fraud against the U.S. government.

But even the feds’ top cop in charge of investigating Medicare fraud points out these agreements can be shams. “Sometimes you can dance around corporate integrity agreements and still be in compliance,” said Timothy Menke, deputy inspector general for investigations with the U.S. Department of Health and Human Services, during congressional testimony in March.

Peter Rost, a former Pfizer marketing vice president who blew the whistle on drug marketing fraud, takes Menke’s criticisms a step further. “In my opinion, this whole thing is a bit of a circus for the consumption of the masses,” he says. “The Department of Justice can say we’ve extracted hundreds of millions of dollars in fines. But it’s a game, and the reason it’s a game is that it really doesn’t change anything.”

As if to confirm Rost’s point, Elan’s official statements seem to suggest the company got caught up in a minor legal quibble and emerged with hardly a scratch. “We are pleased to have reached this agreement, which concludes a longstanding legal matter on a product Elan divested over six years ago,” counsel John Moriarty said. “Elan is committed to adhering to the highest ethical and legal standards.”

Management of health care is one of America’s greatest concerns. In California, new Gov. Jerry Brown’s austere 2011-2012 budget included more than $41 billion to fund Medi-Cal payments for disabled and elderly residents. The federal HHS budget, which includes Medicare and Medicaid health insurance programs for the elderly and poor, is $880 billion.

Medicare fraud, meanwhile, is estimated to take up $60 billion per year of these funds. Much of that problem can be traced to Big Pharma, which can sometimes earn a quarter of its income selling medicine paid for by the government.

Drug company reps can boost sales radically by bribing doctors to prescribe medicines for conditions for which the FDA has not approved them. Laws prohibit off-label marketing to prevent snake-oil salesmen from poisoning the public. For example, the FDA specifically did not approve Zonegran for use in children because of severe potential side effects of heat exhaustion and dehydration. Nonetheless, according to a federal indictment, one sales rep went so far as to instruct physicians to administer the drug to a child by emptying a capsule into applesauce.

According to Chartock’s complaint, between 2001 and 2003 Zonegran’s sales increased 87 percent to more than $80 million “due in large part to” bribes and off-label marketing.

Medicare rules banish companies convicted of felony fraud. But that rarely happens, even in cases of multibillion-dollar fraud.

The reason is simple: Like Bear Stearns and AIG, pharmaceutical giants seem too big to fail. Felony convictions would require banning big drug companies that defraud the government. That would make certain types of medicine unavailable to Medicare patients. And given pharmaceutical companies’ reliance on Medicare sales, banishment would drive companies out of business, eliminating thousands of jobs.

So instead of pursuing felony cases, companies get fines and wrist-slaps in the form of corporate integrity agreements. There’s no drug industry equivalent to Martha Stewart, a famous cheating executive who was jailed as a warning to others.

Pfizer, a $146 billion company, entered one integrity agreement, committed more fraud, entered another agreement, committed fraud again, and entered another agreement.

“When deciding whether to exclude or debar any company, we have to ask, ‘What is in the best interest of our program and our beneficiaries?'” Lew Morris, chief counsel to the Health and Human Services Inspector General, was quoted last year as saying. “We have decided that it is better to keep Pfizer in the program providing critical services and drugs.”

In the case of Elan, the penalty included $100 million in criminal fines for promoting Zonegran as an off-label treatment for pain relief, psychiatric disorders, and migraines. The company pleaded guilty to a misdemeanor, rather than a felony, and thus won’t be barred from selling medicine to federal programs. As for other pharmaceutical companies, fraud seems like just another manageable cost of doing business.

Patrick Burns, a spokesman for the Washington group Taxpayers Against Fraud, said the kid-glove policy is changing, if gradually. In November, the Justice Department announced it had indicted a former vice president of the British drug company GlaxoSmithKline on charges of making false statements and obstructing a federal investigation into illegal drug marketing.

More typical, however, are cases such as Elan’s, which announced in November just as settlement negotiations were winding up that CEO Kelly Martin would be leaving — but not until 2012.

“Most of these corporate integrity agreements are not much better than birdcage lining,” Burns says.

Source: Matt Smith, “Government lets fraudulent drug companies deal with Medicare,” San Franscisco Weekly, January 19, 2011.

Advertisement

Official report seeks to shut down psychiatric “house of horrors” in Mumbai

The 110-year-old Masina Hospital – which boasts of one of the city’s foremost psychiatry wards – has been slammed by the Directorate of Health Services (DHS) for rampant violations of the Mental Health Act of 1987.

The hospital has been asked to put its act together or face a shutdown.

A report filed by the five-member committee, appointed by DHS, states that the hospital has been illegally detaining patients in its psychiatry ward and forcefully administering psychotropic drugs to the detainees.

The head of the psychiatry ward, Dr. Yusuf Matcheswala, however is of the opinion that these are only “minor drawbacks,” which do not warrant a shutdown or similar punitive measures.

The matter came to light after Kemp’s Corner resident Pushpa Tolani filed a complaint with the Maharashtra Human Rights Commission (MHRC) claiming that her friend Neela Shete was detained in the hospital illegally.

Tolani in her complaint pointed out that many other patients like Shete were detained without a reception order from the district magistrate – a mandate under the Mental Health Act.

Shete, 55, a resident of Altamount Road was admitted in July. She was discharged two months later. “The doctors’ claim that she had schizophrenia may or may not be true. However, they cannot detain any adult for such a long time without a reception order,” said Tolani, adding that Shete has been untraceable since her discharge. “They have similarly detained many patients without their consent and in all possibility, they are administering drugs which may be worsening their condition,” she alleged.

Dr. Matcheswala however rubbished these claims saying, “Shete was my patient for the last three years. Her admission for two months was also voluntary and we had not detained her illegally.” He added that he has not heard from Shete since September.

Meanwhile, the MHRC refused to take Tolani’s allegations lightly and directed the DHS to file a detailed report after an investigation. “After surveying the hospital and cross checking all the allegations we learnt that about 20 more patients were detained illegally at the hospital.

They were administered treatment which has been banned, and their relatives were overcharged. Often the patients are being drugged even when it was not required,” said Dr. Sanjay Kumavat, who is heading the DHS committee.

The committee including Kumavat, advocate Chaya Haldankar, clinical psychologist Dr. Vinayak Mahajan and psychiatrist Dr. Geeta Joshi personally met these patients.

While Dr. Matcheswala said that he was aware of the enquiry, and vowed to “rectify” the “shortcomings” once the report from DHS was made available to him, Dr. Kumawat and the investigating committee were in no mood to for any leniency.

Psychiatrist Dr Yusuf Matcheswala

“If the hospital fails to straighten up in the stipulated time, their licence will be revoked and the mental health facility will be shut down. The matter is also under the purview of human rights commission. If they are found guilty of violation of the act, as per IPC they can face imprisonment up to five years and cancellation of licence,” said Kumavat.

“Ours is the only psychiatric ward in the city. We cannot close down because of such minor drawbacks,” said a belligerent Dr. Matcheswala.

What’s ailing Masina hospital

♦ Detaining patients without consent: “Ideally a patient can come voluntarily or following a court order. However, patients here were brought in a van at relatives’ request. There are cases of relatives sending patients away due to vested interest,” said Kumavat, and consent taken later.

♦ Unqualified staff, inadequate facilities: The report says the hospital has few psychiatric nurses and other professionals. Despite a 40-bed licence, some 100 patients are kept without permission.

♦ Forcing unnecessary therapies, including shock therapy: Patients are administered treatment banned long ago.  Shock treatment is often used despite use of tranquillisers. One patient is given 35 sessions of Transcranial Magnetic Stimulation, which is unnecessary.  “As patients are unaware, the hospital administers almost all non required treatment and makes money for itself and pharma firms, by extending their stay,” said Dr Vinayak Mahajan, committee member. “We have prescriptions of unwanted medicines,” he said.

♦ Patients seldom rehabilitated: Hardly any patients are being rehabilitated. The hospital only concentrates on active psychiatric cases. They are not maintaining patient records and case papers.

Source: Sobiya Moghul and Jyoti Shelar, “City’s foremost mental hospital uses banned therapies, detains patients illegally,” Ahmedabad Mirror, January 4, 2011.

Has psychiatrist Henry Nasrallah accurately reported his pharma income to the University of Cincinnati?

The University of Cincinnati website describes schizophrenia researcher Henry Nasrallah as “an internationally recognized psychiatrist, educator and researcher.”  Thanks to the work of the ProPublica news group, the University can now add “internationally recognized researcher compromised by pharmaceutical company influence.”

ProPublica, a public interest news agency, recently issued the report “Dollars for Docs,” in which they identified 384 physicians who received more than $100,000 from one or more of the seven pharmaceutical companies which publish such information (such companies include Eli Lilly, GlaxoSmithKline and Pfizer).

Pharmaceutical companies may pay physicians for various reasons, such as for giving promotional speeches about a company’s drug to groups of doctors or being a company’s paid consultant.

Nasrallah received more than $60,000 from Pfizer the last two quarters of 2009 for presenting “expert-led forums” and for related travel expenses.

He received $41,920 from Astrazeneca in early 2010 for being a paid speaker on their behalf.

He received more than $6,000 from Johnson & Johnson in 2010 for speaking fees.

Nasrallah is not the first or only University of Cincinnati psychiatrist to have his financial conflicts of interests exposed:   Melissa Delbello, a pediatric research psychiatrist with the University of Cincinnati was cited by the U.S. Senate Finance Committee for her failure to disclose to the university how much she had earned from pharmaceutical companies. In 2002, she was the lead author of a study that concluded that children responded well to the antipsychotic drug Seroquel, which is manufactured by AstraZeneca.  She disclosed that she’d received $100,000 from the company between 2005 and 2007, but Finance Committee Ranking Member Senator Charles Grassley discovered it was more than double that: $238,000.

Which raises the question: Has Nasrallah accurately reported his pharma income to the University?

University of Cincinnati psychiatry professor Henry Nasrallah received more than $100K from drug companies last year

The University of Cincinnati website describes schizophrenia researcher Henry Nasrallah as “an internationally recognized psychiatrist, educator and researcher.”  Thanks to the work of the ProPublica news group, the University can now add “internationally recognized researcher compromised by pharmaceutical company influence.”

ProPublica, a public interest news agency, recently issued the report “Dollars for Docs,” in which they identified 384 physicians who received more than $100,000 from one or more of the seven pharmaceutical companies which publish such information (such companies include Eli Lilly, GlaxoSmithKline and Pfizer).

Pharmaceutical companies may pay physicians for various reasons, such as for giving promotional speeches about a company’s drug to groups of doctors or being a company’s paid consultant.

Nasrallah received more than $60,000 from Pfizer the last two quarters of 2009 for presenting “expert-led forums” and for related travel expenses.

He received $41,920 from Astrazeneca in early 2010 for being a paid speaker on their behalf.

He received more than $6,000 from Johnson & Johnson in 2010 for speaking fees.

[Delbello] disclosed that she’d received $100,000 from the company between 2005 and 2007, but Finance Committee Ranking Member Senator Charles Grassley discovered it was more than double that: $238,000.

Nasrallah is not the first or only University of Cincinnati psychiatrist to have his financial conflicts of interests exposed:   Melissa Delbello, a pediatric research psychiatrist with the University of Cincinnati was cited by the U.S. Senate Finance Committee for her failure to disclose to the university how much she had earned from pharmaceutical companies. In 2002, she was the lead author of a study that concluded that children responded well to the antipsychotic drug Seroquel, which is manufactured by AstraZeneca.  She disclosed that she’d received $100,000 from the company between 2005 and 2007, but Finance Committee Ranking Member Senator Charles Grassley discovered it was more than double that: $238,000.

Which raises the question: Has Nasrallah accurately reported his pharma income to the University?

(Used with permission of Citizens Commission on Human Rights International.)

Psychiatrist Jonathan D. Sommers charged by license board for excessive prescribing

On October 7, 2010, the Medical Board of California issued an Accusation against psychiatrist Jonathan David Sommers, seeking to suspend, revoke or otherwise discipline his license.

According to the Board’s document, it opened and investigation of Sommers based on information received from the Humboldt County Department of Health and Human Services, where Sommers was employed.

A review of his treatment of patients and prescribing practices was undertaken.  The investigation detected departures from the standard of care relative to five patients.

In general, the accusations center around prescribing psychiatric drugs to elderly patients at excessively high doses as well as numerous departures in the standard of care in the treatment of a 17-year-old suicidal patient.

Source: Accusation in the Matter of the Accusation Against Jonathan David Sommers, M.D., license no. G41535, Case No. 12-2008-193482, Medical Board of California.

State seeking to revoke psychiatrist’s license for incompetence, gross negligence, false claims

On September 22, 2010, the Medical Board of California issued an Accusation and Petition to Revoke Probation on psychiatrist Joseph Ling-Hang Chan and is seeking to revoke his license, among other disciplinary measures.

The Board issued an Order on January 12, 2009, suspending Chan for 30 days and placing him on probation for seven years for gross negligence, repeated acts of negligence, incompetence and excessive prescribing involving seven patients, most of whom were elderly. The Order details how Chan prescribed multiple atypical antipsychotic drugs (Seroquel, Clozaril, etc.) in excessive amounts and failed to maintain appropriate medical records, failed to order appropriate lab tests (specifically with regard to the use of Clozaril) and/or failed to maintain adequate and appropriate records of the results of such tests.

A typical scenario in the January 2009 Order: Chan maintained a 68-year-old patient on Prolixin and Zyprexa (both atypical antipsychotics), among other drugs, and noted in the chart that he would taper the patient off of Prolixin and keep him on Zyprexa, but that did not actually occur for four months.  In another entry, Chan wrote that he would “clean up Prolixin when [the patient] is stable.” That note was repeated verbatim in the patient’s record for five consecutive months and then was dropped with no explanation.  The notes don’t explain why Chan intended to cross-taper the patient from one drug to the other or why it was not carried out and the records do not provide justification for maintaining the patient on excessive doses of the two drugs.  The records show that shortly after, Chan added an additional antipsychotic, Seroquel, the patient’s regimen, but there was no rationale in the patient’s records for this addition and there was no justification noted when the dosage was increased.

In one incident, Chan continued to submit claims for payment of service for nine consecutive months after the patient died.

Additionally, the Order noted that Chan’s patient records in general were not adequate or accurate and that he submitted false billings to public heath plans (Medicare and Medi-Cal).  Specifically, he routinely failed to appropriately document patients’ medications; his rationale for treatment with multiple antipsychotic agents; reasons for making (or failing to make) medication changes; review of laboratory test results; follow up on drug side effects and his communications with the patients’ other health care providers.  Additionally, Chan’s patient records for numerous visits were identical or nearly identical for extended periods; contained factual errors and were missing documentation for numerous months during his care of multiple patients.

Lastly, Chan submitted inaccurate or false health care claims to state and federal health plans (including Medicare and Medi-Cal) for services he had not provided.  In one incident, Chan continued to submit claims for payment of service for nine consecutive months after the patient died.

The Board’s current Accusation and Petition to Revoke is based on Chan’s identical or similar treatment of five additional patients, as well as his failure to consult the patients’ prior medical records and filing false documents, among other things.

The Board noted that “despite remedial clinical education,” Chan “demonstrated little understanding of the purpose of medical records or the importance of maintaining adequate and accurate records; rather, [he] stated that he made trivial changes in his records from visit to visit for the sole purpose of deflecting criticism.”  Additionally, with regard to the false billings, the Board noted that Chan “routinely prepared medical records and bills for services…with the intent to receive compensation for services not rendered” and “admitted to excessive billing, which he justified on the basis that he was not paid enough for his services….”

Source: Accusation and Petition to Revoke Probation in the Matter of the Accusation Against Joseph Ling-Hang Chan, M.D., Physician and Surgeon certificate F50691, Case Nos. D1-2006-174722 and 03-2008-193948 and Stipulated Settlement and Disciplinary Order in the Matter of the Accusation Against Joseph Ling-Hang Chan, M.D., Physician and Surgeon certificate F50691, Case No. 03-2008-193948, Medical Board of California.

This information was used with permission of the Citizens Commission on Human Rights International.