Kickbacks

Pharmaceutical companies spend tens of billions of dollars on advertising every year, with a significant chunk of that allocated to direct marketing to physicians.

This attention that drug companies lavish on doctors—including honoraria, vacations, and other gifts—creates non-negligible risks of distorting doctors’ medical judgments, by influencing doctors to write prescriptions they would not write otherwise, which increases costs to Medicare, Medicaid, and other federally funded healthcare programs and may adversely affect patient care.  Read more 

To attempt to insulate physicians from these influences, federal law prohibits “kickbacks.” A kickback is any “remuneration” provided by a drug manufacturer to physicians or their staff, in cash or in kind, intended as an inducement or reward for recommending or prescribing particular products. Illegal kickbacks have taken many forms, some disguised, some not, including free or reduced cost vacations, free fancy meals, payments for serving on sham “advisory” boards, lecture fees, sham “consulting” fees, free samples (to be sold to patients), and tickets for sporting or entertainment events, among others.

Case Examples

Many very substantial False Claims Act cases have been based on claims of kickbacks paid by drug manufacturers. Both parties to a kickback—the offeror and the recipient—risk liability. By way of example:

In February 2014, Omnicare, Inc., an Ohio-based company that provides pharmaceuticals and services to long-term care facilities, agreed to pay $4.19 million to resolve whistleblower claims that it violated the False Claims Act by soliciting and receiving kickbacks from the drug manufacturer Amgen in return for implementing programs designed to switch Medicaid beneficiaries from a competitor drug to Amgen’s product. The whistleblower in this case was an Amgen employee, who received $397,925 as his share of the settlement. Read more

In November 2013, Johnson & Johnson (J&J) agreed to pay $149 million to resolve whistleblower claims that the company violated the False Claims Act by paying kickbacks—disguised as “share rebate payments,” “data-purchase agreements,” “grants” and “educational funding”—to OmniCare, Inc., the nation’s largest long-term care pharmacy provider, to induce Omnicare and its consultant pharmacists to promote the use of J&J drugs in nursing homes. The whistleblowers in the case received $27.7 million as their share of the settlement. Read more.

In 2008, Bayer HealthCare (Bayer) agreed to pay $97.5 million to settle claims that it violated the False Claims Act by engaging in a cash-for-patient scheme, which involved paying diabetic suppliers to convert their patients to Bayer’s products from supplies manufactured by Bayer’s  competitors. Read more

In 2001, TAP Pharmaceuticals agreed to pay $559 million to resolve whistleblower claims that the company violated the False Claims Act by paying kickbacks to doctors to encourage them to prescribe TAP’s drug Lupron over competing drugs and by gifting free samples of Lupron to doctors who could then sell the samples at a profit.

If you have knowledge and solid evidence of fraud or false claims by a drug manufacturer, please contact our Chicago whistleblower lawyers.
Consultations are free and confidential.