Federal law enforcement agencies announced a $54 million settlement against Salix Pharmaceuticals for using “speaker programs” to pay kickbacks to doctors so they would prescribe company drugs and medical devices.
The scam violated the federal Anti-Kickback Statute and False Claims Act. Big Pharma is a corrupt industry that has often been nailed for paying kickbacks and committing fraud to bloat their profits:
|Bristol-Myers Squibb||$515 million||Abilify, Serzone||2007|
|GlaxoSmithKline||$3 billion||Avandia, Wellbutrin, Paxil, Advair, Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex;||2012|
|Johnson & Johnson||$2.2 billion||Risperdal, Invega, Nesiritide||2013|
|Merck||$650 million||Zocor, Vioxx, Pepsid||2008|
|Pfizer||$2.3 billion||Bextra, Geodon, Zyvox, Lyrica||2009|
|Schering-Plough||$435 million||Temodar, Intron A, K-Dur, Claritin RediTabs||2006|
|TAP Pharmaceutical Products||$875 million||Lupron||2001|
Sham speaker programs
Announcing the settlement were the US Attorney for the Southern District of New York, the U.S. Department of Health and Human Services, the Office of Inspector General’s New York Region, and the FBI.
Salix held sham speaker programs, often at high-end restaurants (such as Nobu and Le Bernardin in New York City), with per-person costs exceeding $300. The doctors got substantial speaker fees at fake continuing medical education (CME) programs and spent little or no time discussing the product.
Under the settlement, Salix must pay about $46.53 million to the federal government plus $7.47 million to resolve the state law civil fraud claims.
“Salix found a way to pay doctors money and treated them to fancy meals to push their drugs. With today’s settlement, Salix has taken responsibility for its conduct and agreed to pay a significant financial penalty. This is part of our continuing effort to pursue health care providers who put their profits ahead of patient safety,” said Manhattan U.S. Attorney Preet Bharara.
FBI Assistant Director-in-Charge Diego Rodriguez said, “The simple idea behind the pitch eats away at the faith patients have in their doctors to put their health and wellbeing above the interests of a corporation.”
Salix is a specialty pharmaceutical company based in Raleigh, North Carolina, that sells products used to treat various gastroenterology conditions. From January 2009 to December 2013, Salix’s speaker programs for Xifaxan, Apriso, Relistor, MoviPrep, OsmoPrep, Solesta, and Deflux were nothing more than social events where Salix wined and dined doctors to induce them to write prescriptions for these products.
At many of its speaker programs, Salix repeatedly invited the same doctors, who often were from the same practice or otherwise knew each other, to attend the same program on the same topic. In pre-recorded programs – which Salix staff called “doc-in-the-box programs” – the pre-recorded video often was not played or was intentionally played in a way so it could be ignored.
Many of these doctors increased their prescription-writing for Salix drugs after becoming speakers or repeatedly attending sham speaker programs. Salix spent about $25 million on speaker payments and meals.
Salix admitted and accepted responsibility for the following conduct:
- The speaker programs were an important part of Salix’s strategy for increasing sales of its drugs. The company conducted about 10,000 speaker programs, including about 8,000 programs alone for Xifaxan, Apriso and Relistor.
- Speaker honoraria payments ranged from $250 (for a doctor available on call to answer questions) to $4,500 (for a doctor who spoke at an in-person program). Salix paid more than 500 physicians honoraria for serving as speakers about their products, with dozens of physicians earning more than $50,000, and several earning more than $100,000.
The government joined two private whistleblower lawsuits that had previously been filed under seal pursuant to the False Claims Act.