Health fraud

We often think of problems with our medicines in terms of fake or counterfeit drugs, or of snake oil peddlers like those you see around Quiapo touting all kinds of cures. These are all very real and serious problems but sometimes we forget that even the larger drug companies, the ones we trust so much for our medicines, may also be engaged in what the US government calls health fraud.

GlaxoSmithKline (GSK), a British pharmaceutical firm, has agreed to pay the US government a $3-billion settlement after pleading guilty to three misdemeanor charges. The settlement has been described as the largest in history for a case of health fraud. GSK was brought to court for the way it marketed 10 drugs, including making claims for unapproved uses, as well as excessive promotions with doctors. Besides paying the settlement, GSK has agreed to US government monitoring of its marketing practices for the next five years.

It was in 2003 when two GSK sales representatives became whistle-blowers, presenting evidence of alleged unethical marketing practices—for example, Wellbutrin being promoted for weight loss, substance addictions, sexual dysfunction and attention deficit hyperactivity disorder, all indications not approved by the US Food and Drug Administration (US FDA).

Government prosecutors also said that Glaxo illegally promoted Paxil for treating depression in children from 1998 to 2003; yet, the US FDA’s approval was very clear about the drug having to be used only for patients over the age of 18. One reported side effect of Paxil has been suicidal thoughts, and there are concerns the risks are higher for young patients.

The government had a long list of misdemeanors—for example, GSK promoting Advair, an asthma remedy combining two drugs, for use as a first-choice treatment for any patient with asthma when the US FDA, concerned about some of its side effects, had approved it only as first-line therapy for patients with severe asthma.

GSK will also plead guilty to failing to report to the government, across seven years, safety problems with the diabetes drug Avandia. The drug was banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failure.

False claims

I hope our doctors, and patients, will be more careful when thinking about our large drug companies which we presume to provide the best quality drugs with the best information. Yet this latest health fraud case with GSK comes only two years after it agreed to plead guilty to charges of manufacturing and distributing adulterated drugs by Cidra, a subsidiary in Puerto Rico. The drugs were for depression, diabetes and skin infections. The factory there has since been closed down. GSK agreed to pay $150 million as a criminal fine and civil settlement, and another $600 million to various states in America for reimbursement claims for the adulterated drugs.

The United States has a strong False Claims Act that allows the government to go after erring drug companies for various offenses, from improper marketing to the manufacture of substandard drugs. In several cases, including the two GSK cases I just described, false claims include reimbursements from Medicaid, the government’s health insurance program, for the drugs in question. It’s an interesting take where the meaning of false claims is not just unethical promotions but also government money being used to reimburse for drugs that were promoted for unapproved uses.

The law also allows private citizens to bring civil actions on behalf of the United States and to share in any recovery. In the case of GSK’s adulterated drugs, the whistle-blower, Cheryl Eckard, was eligible to receive some $96 million from the settlement.

Ethical, beneficial?

Before this GSK case, the largest health fraud settlement involved Pfizer, which agreed in September 2009 to pay $2.3 billion for illegal promotion of the drugs Bextra, Geodon, Zyvox and Lyrica, including “kickbacks” to health care providers.

It had mainly been US and European governments cracking the whip on drug companies, but in July 2009, Pfizer agreed to pay $75 million to the Nigerian state of Kano to settle charges that it had conducted clinical trials in 1996 involving children with meningitis, without government authorization or guardian consent. The state of Kano claimed that the testing resulted in the death of 11 children and the incapacitation of 181 others and wanted $2.75 billion in damages. Pfizer insisted its actions were “ethical and beneficial” but agreed to pay to settle the suit.

Similarly, in this latest health fraud case, GSK was very careful in qualifying that its settlement “does not constitute an admission of any liability or wrongdoing in the selling and marketing of Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex, Avandia or Advair products.”

Yet, in a number of statements around these charges, which date back several years, company executives have admitted that their marketing practices were problematic. In a speech last May before the World Affairs Council, Deirdre Connelly, Glaxo’s US president, said that business models used for selling “chocolates or cars” should not be used for prescription medicines. Connelly said that Glaxo had stopped paying bonuses to sales representatives based on the volumes of prescriptions written in their sales territories, and that how effectively they provided information and support to customers would instead be used as basis.

There have been self-policing moves by the pharmaceutical companies, through the International Federation of Pharmaceutical Manufacturers and Associations. A code of marketing practices was first formulated in 1981, following growing complaints from governments and consumer groups about unethical marketing practices. The code has been revised several times and a new one will come in force in September, one with greatly expanded scope. Besides direct marketing practices, the new code has provisions concerning clinical research and transparency, and interactions with physicians and with patients’ organizations.

There are many other unpublicized cases of pharmaceutical fraud. A posting on the site jurist.org quotes Daniel R. Levinson, inspector general of the US Department of Health and Human Services, as saying that pharmaceutical companies paid $2.3 billion in 2010 alone, involving cases filed against them. Levinson also said: “If all pharmaceutical manufacturers complied with the law, there would be no need for such massive settlements and judgments. But until they stop stealing from taxpayers and threatening the health and lives of Americans … [the Office of the Inspector General] will continue to vigorously pursue these corporations and their executives.”

Now to ask: Is enough being done to protect the health and lives of people around the world, including the Philippines, who depend so much on the medicines produced by these companies?

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Email: mtan@inquirer.com.ph