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Caveat Medicus: Consequences of Federal Investigations of Marketing Activities of Pharmaceutical Suppliers of Prostate Cancer Drugs

From the Jesse Brown Veterans Affairs Medical Center Lakeside Community-Based Outpatient Clinic and the Mid-West Center for Health Services and Policy Research; the Divisions of Hematology/Oncology and Geriatric Medicine, the Robert H. Lurie Comprehensive Cancer Center, and the Institute for Health Service Research and Policy of the Northwestern University Feinberg School of Medicine; Rush Medical College; Center for Pharmacoeconomic Research, College of Pharmacy, University of Illinois at Chicago, Chicago IL; Department of Urology, Stanley Scott Cancer Center of the Louisiana State University School of Medicine, New Orleans, LA; Urologic Oncology Clinic, Urology Service, Walter Reed Army Medical Center, Washington, DC; and The Virginia Prostate Center of Eastern Virginia Medical School, Norfolk, VA.

Address reprint requests to Charles L. Bennett, MD, PhD, MPP, Jesse Brown Veterans Affairs Medical Center, Division of General Internal Medicine/ Department of Medicine, Feinberg School of Medicine, Northwestern University, 333 E Huron St, Ste 277, Chicago, IL 60611; e-mail: cbenne{at}northwestern.edu

In the course of recent health care fraud investigations against TAP Pharmaceuticals (Lake Forest, IL) and AstraZeneca International (London, United Kingdom), each pled guilty to one violation of the Prescription Drug Marketing Act, settled claims related to alleged violations of the False Claims Act without admitting guilt, and paid fines, settlements for liabilities, and reimbursements of $850 million and $355 million, respectively. In a unique aspect of these cases, federal investigators brought criminal charges against 14 TAP employees and investigated the billing practices of several urologists. These investigations resulted in guilty pleas from both urologists and industry employees relative to the Prescription Drug Marketing Act or the False Claims Act and probationary sentences with payments of fines and restitution to the government for urologists who cooperated with federal investigations. One uncooperative urologist was found guilty of violating the Federal False Claims Act and sentenced to 6 months of home arrest, excluded from Medicare for 5 years, required to provide 600 hours of free medical care to indigent patients and patients covered by Medicare or Medicaid, and paid fines and restitution to the government. The cases against TAP and AstraZeneca have been followed by federal and state investigations of allegedly illegal marketing practices of other pharmaceutical firms and have resulted in negotiated settlements of $3.8 billion and $71.5 million, respectively. Believing that an Average Wholesale Price–based reimbursement system was an important driving factor for these marketing activities, Medicare has shifted to an Average Sales Price–based reimbursement system. This is expected to greatly impact the practice of outpatient oncology nationwide.

Supported in part by Grants No. 1R01CA 102713-01 and P 30 CA60553 from the National Cancer Institute (C.L.B. and J.M.M.).

Authors' disclosures of potential conflicts of interest are found at the end of this article.

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