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25 March 2016

How Two Whistleblowers Broke The Biggest Case Of Health Care Fraud Allegations In US History

In 2003, two former employees of pharmaceutical conglomerate GlaxoSmithKline filed a whistleblower lawsuit against the company in the US District Court of Massachusetts. Thomas Gerahty, who served as a senior marketing development manager for GlaxSmithKline, and Matthew Burke, a regional vice president, said their former employer had been promoting “numerous” prescription drugs “off-label” for years.

Eventually, the US Department of Justice took on the case. Numerous states were added as plaintiffs, as the Justice Department bundled several other similar whistleblower, or qui tam, lawsuits together. After nine years of investigation, the lawsuit would end in a $3 billion settlement agreement, which holds the record for largest case of health care fraud in US history.

In 2003, GSK Whistleblowers Claimed “Systematic” Pharma Fraud

But it all began in Boston, and many of the government’s allegations were drawn directly from Gerahty and Burke’s initial complaint.

At least six of the company’s most-popular drugs had all been marketed for unapproved uses, the two men said, through efforts that could deceive health care professionals, could inflate prescription sales and, in some cases, might get patients on “medically unnecessary” treatment regimens.

View The Whistleblower Lawsuit: Case 1:03-cv-10641

If true, many of Gerahty and Burke’s allegations amount to violations of federal Food and Drugs laws. Less clear, but no less forbidden, according to Plaintiffs (who are referred to as “relators” in the context of whistleblower lawsuits), were their employer’s “indirect promotional strategies.” The men outlined two of the most prevalent schemes: distributing medical articles on the putative benefits of an unapproved use and holding “Continuing Medical Education” courses for physicians, “lessons” that stress the benefits of an off-label use.

File Cabinets In Hallway

On numerous occasions, the FDA and Congress have attempted to limit a company’s ability to encourage “off-label” sales through indirect means. Under the Food & Drug Administration Modernization Act, distributing articles on unapproved indications is only legal if a health care provider makes an “unsolicited request” for the materials. Continuing Medical Education courses, on the other hand, have to be “truly independent of the drug companies [and] free from the supporting company’s influence and bias,” Relators wrote in their lawsuit. Both were schemes which may have resulted in greater profits for GlaxoSmithKline, Gerahty and Burke claimed.

Their allegations spanned six different drugs, Wellbutrin SR, Valtrex, Zofran, Imitrex, Advair and Lamictal. In this article, we’ll focus on two: Wellbutrin and Zofran.

Selling Wellbutrin

Among antidepressants, Wellbutrin is unique. Rather than affecting the brain’s uptake of serotonin, like the vast majority of popular drugs approved to treat depression, Wellbutrin’s active ingredient, bupropion, deals with a different neurotransmitter: dopamine. But just like selective serotonin reuptake inhibitors (SSRI) Paxil, Prozac and Celexa, Wellbutrin is approved to treat only one condition, major depressive disorder in patients 18 and older. That put Wellbutrin into direct competition with every SSRI, but GlaxoSmithKline’s own market research found that neither psychiatrists nor primary care providers perceived Wellbutrin as an effective treatment. Wellbutrin, Gerahty and Burke say, was losing out in the battle to treat depression.

The company’s market research wasn’t a total loss, however, Relators write. SSRIs have long been linked to weight gain and sexual dysfunction. Wellbutrin, on the other hand, carries a lower risk for these undesirable side effects, treatments for which, Gerahty and Burke note, constitute multi-billion dollar markets in their own right. The solution was clear, say Relators: encourage doctors to prescribe Wellbutrin, in combination with SSRIs, to treat the side effects of SSRIs. In effect, promote Wellbutrin for the treatment of sexual dysfunction and weight gain, indications that, according to Relators, went far beyond the drug’s one approved usage.

And why limit Wellbutrin to only one indication? The drug, after all, is simply a chemical that increases the amount of two neurotransmitters, norepinephrine and dopamine, in a patient’s brain. To be sure, boosting norepinephrine and dopamine can certainly help patients with depression, but what about those suffering from “co-morbid” disorders, other conditions that often appear alongside major depression? Opening Wellbutrin up to these other lucrative markets is exactly what GlaxoSmithKline did next, Gerahty and Burke claim.

Operation Hustle: “New Indications” Lead Growth

This is where “Operation Hustle” comes in, a national sales campaign pitched to the company’s “sales and marketing force in approximately 17 cities around the country.” Operation Hustle was designed to redefine GlaxoSmithKline’s approach to promoting Wellbutrin, moving the drug away from major depression and toward unapproved conditions like attention deficit / hyperactivity disorder (ADHD), addiction withdrawal, depression-associated anxiety, post-traumatic stress syndrome, panic disorders, generalized anxiety disorder and even social phobia, according to Relators.

Here’s an example of the company’s “new direction,” taken from Exhibit 7 of Gerahty and Burke’s lawsuit, a pamphlet distributed to sales representatives in February 2002:

US v. GlaxoSmithKline Exhibit 7

You’ll notice that the company begins by noting Wellbutrin’s one indication, “depression in adults,” and goes so far as to state that the drug is “not indicated” for anxiety disorders. In the next sentence? Wellbutrin “has demonstrated positive results in treating symptoms of anxiety.”

“The message” here “was clear,” Gerahty and Burke write: “Wellbutrin SR […] could be used to treat a substantially broader range of indications than mere depression.” Similar marketing materials, Relators say, advocated the use of Wellbutrin for everything “from ADHD and addictions to chronic fatigue syndrome, craving and cognitive disorders.” All of which are separate indications, “discrete diagnoses,” the men wrote in their lawsuit, “each of which has FDA-approved drugs for their treatment.”

Operation Hustle turned out to be aptly-named, Relators claim. Less than a year after the initiative was begun, Wellbutrin sales had increased by 34%. But as a treatment for depression, the drug’s usage had only grown by 20%. For “other” indications, according to Gerahty and Burke, Wellbutrin sales had increased by almost 60%, a fact acknowledged in GlaxoSmithKline’s “Strategic Plan” dated April 27, 2000, which read, in no uncertain terms, “recent successes have been driven by heavy promotion of new indications and tolerability advantages” [emphasis added].

False PRIDE?

In 2001, Relators write, GlaxoSmithKline veered even further from Wellbutrin’s approved indications. To this point, the company’s alleged off-label promotion had at least stayed in the ballpark of major depression. But with the release of several favorable studies (all funded by GlaxoSmithKline), Relators say the company saw new hope for its growing brand: Wellbutrin might be “an effective treatment for weight loss in nondepressed patients.” Internal corporate documents from 2002 even define a “current lack of safe and effect[ive] prescription therapies for weight loss w/o side effects” as one of the company’s market “Opportunities”:

US v. GlaxoSmithKline Exhibit 17 Clip Note that “legitimacy of treatment of sexual dysfunction in non-depressed patients” is listed as another “Opportunity.” How to capitalize on these “Opportunities,” Gerahty and Burke write, was another matter. As we mentioned, pharmaceutical companies can’t just send studies about unapproved uses to health care providers. That would look a lot like off-label promotion. In order to circumvent federal law, Relators claim, GlaxoSmithKline found a clever way to bring health care providers to them.

The scheme was called PRIDE, Peer Review of Intimacy and Depression, a series of “national speaker program[s],” dinners really, where “putatively ‘independent’ speakers and / or consultants presented their own materials and views about Wellbutrin SR” to rooms of doctors. These presentations, however, were “permeated with off-label representations,” Relators write. In fact, since Glaxo representatives attended “every PRIDE program event,” and brought copies of the presentations back to headquarters, GlaxoSmithKline was able to identify the speakers who made the “strong[est] off-label claims” and invite them to speak “most frequently,” Gerahty and Burke say.

Doctors Served As Willing Collaborators, Relators Say

Presenters, for their part, doctors like James Hudziak and James Pradko, did not go uncompensated for their efforts. Pradko alone made around $600,000 in 2002 off his PRIDE speaking engagements, a vast sum Gerahty and Burke characterized as an illegal “kickback.” In his presentations, Relators claim, Pradko said more about Wellbutrin’s off-label benefits than its on-label uses, going so far as to contradict the drug’s FDA-approved prescribing information. In one “lecture,” the doctor even said “he put all of his pregnant patients on Wellbutrin SR and further claimed that the FDA said that [Wellbutrin] is [the safest antidepressant] in pregnancy,” Gerahty and Burke write. Contrast those assertions to what the drug’s prescribing information actually said about pregnancy: Wellbutrin “should be used during pregnancy only if clearly needed” and “there are no adequate or controlled studies in pregnant women.”

Glaxo didn’t discourage this off-label advocacy, Relators say; the company actively promoted it. For one, company representatives attended the speaking events and, fully aware of the presenters’ statements, employed more frequently those speakers who made claims about Wellbutrin’s off-label benefits. Some speakers, Gerahty and Burke claim, were “told that they would not be asked to speak if they did not convey the message Glaxo wished.”

But for those doctors who stuck to the company’s script, considerable rewards would follow, Relators write. The company would purchase “hundreds, if not thousands, of audiocassette tapes” of their presentations, Gerahty and Burke allege, and then distributed those tapes directly to prescribing physicians. Of course, since GlaxoSmithKline was purchasing the tapes from speakers like Dr. Pradko, those sales “constituted a reward or kickback” in their own right, Relators write.

“Unless He Gives A Better Message, He Will Not Talk For Us”

Physicians, Gerahty and Burke suggest, were more-than-willing conspirators in this apparent scheme to increase off-label prescriptions of Wellbutrin. In one meeting with a company sales representative, a North Carolina doctor said he didn’t “mind prostituting himself out for about $750 a pop.” That zeal, though, wasn’t good enough for GlaxoSmithKline, Relators write. Two months, and several presentations later, a rep wrote of the same doctor: “tell him that unless he gives a better message, he will not talk for us.”

Soon, the presentations were being given to company sales representatives as well. GlaxoSmithKline’s sales force was “bombarded […] with information concerning off-label treatments with Wellbutrin SR,” according to Gerahty and Burke, at the expense of learning about the drug’s approved indications. Perhaps most egregious is Relators’ allegation that the company “required” its sales reps “visit pediatricians and child psychiatrists” to promote Wellbutrin. As we know, Wellbutrin was not, and has never been, approved for use in patients under the age of 18. Today, the drug’s labeling bears a “black box” warning about an “increased risk of suicidal thinking and behavior in children, adolescents, and young adults taking antidepressants.”

Glaxo Pleads Guilty, But Not To Promoting Off-Label

In 2012, according to a Justice Department press release dated July 2, 2012, GlaxoSmithKline agreed to plead guilty to introducing a misbranded drug, Wellbutrin, into interstate commerce. The company also agreed to plead guilty to misbranding Paxil, an SSRI antidepressant. For both offenses, Glaxo agreed to pay a criminal fine and forfeit assets equivalent to $757,387,200. Here’s how the US Department of Justice summed up the outcome:

“The United States […] alleges that, from January 1999 to December 2003, GSK promoted Wellbutrin, approved at that time only for Major Depressive Disorder, for weight loss, the treatment of sexual dysfunction, substance additions and Attention Deficit Hyperactivity Disorder, among other off-label uses. The United States contends that GSK paid millions of dollars to doctors to speak at and attend meetings, sometimes at lavish resorts, at which the off-label uses of Wellbutrin were routinely promoted and also used sales representatives, sham advisory boards, and supposedly independent Continuing Medical Education (CME) programs to promote Wellbutrin for these unapproved uses. GSK has agreed to plead guilty to misbranding Wellbutrin in that its labeling did not bear adequate directions for these off-label uses.”

The Justice Department’s investigation was based directly on allegations first leveled in Gerahty and Burke’s qui tam lawsuit, and the agency’s criminal case against GlaxoSmithKline was prosecuted by the US Attorney’s Office for the District of Massachusetts.

Blockbuster “Zofran” Got A Bump From Tums, Relators Claim

For Zofran, the whistleblowers claim, GlaxoSmithKline didn’t need to create complex marketing initiatives, like Operation Hustle or PRIDE. In order to expand the nausea drug’s sales off-label, the company took a decidedly more direct route, they write.

Zofran was approved in 1991 to treat nausea and vomiting in specific patients populations. To date, the drug has only been approved for patients who experience nausea after receiving surgical anesthesia and cancer patients undergoing certain types of chemotherapy and radiotherapy. Even with these limited indications, Zofran was almost immediately a “blockbuster” drug, according to Gerahty and Burke, pulling in over $859 million in US sales in 2001 alone. Any credit for that number should go to GlaxoSmithKline’s Oncology Division sales force, which “historically” undertook the drug’s marketing, Relators say. That’s logical when you take the drug’s approved indications into account.

Look at Zofran’s 2002 sales, though, and you’ll notice a significant jump. That year, revenues from the drug increased to $1.1 billion, a 28% bump from the previous year, but according to Relators, it’s no longer so clear who should be commended for the growth.

An Unexploited Market

Zofran’s remarkable popularity, on Gerahty and Burke’s account, really comes down to Tums. You know Tums, those tasty, chewable antacids available over-the-counter. Tums are made by GlaxoSmithKline and, as it turns out, Glaxo’s Consumer Healthcare sales force “routinely calls on obstetrician[s] and gynecologists to promote and sell Tums,” Relators wrote in 2002.

Pregnant women frequently suffer from heartburn; more than half report severe heartburn during the second and third trimester, according to WebMD. Since Tums is a safe, effective and cheap treatment for heartburn, it’s only logical that OB/GYNs would be receptive to suggesting the drug to their patients, even offer them a few free samples. But heartburn isn’t the only adverse condition from which most pregnant women suffer. By some estimates, upwards of 90% of pregnant women experience some degree of morning sickness during early pregnancy. That’s a huge market, and one that was completely unserved, since America’s only FDA-approved drug for morning sickness was removed from the market in 1983.

GlaxoSmithKline, Gerahty and Burke say, saw yet another opportunity. In 2001, the company’s Oncology Division struck an agreement with its Consumer Healthcare Division, so both sales forces could promote Zofran to physicians, Relators write. Oncology would stick with oncologists, promoting Zofran as a nausea treatment for chemotherapy patients. But Consumer Healthcare, according to the whistleblowers, would use its preexisting network of obstetricians and gynecologists to pair presentations on Tums with presentations on Zofran and the drug’s benefits for pregnant women.

Gerahty and Burke claim the new “co-marketing arrangement” worked wonders for GlaxoSmithKline. Prescriptions for Zofran “written by obstetricians and gynecologists” rose “dramatically,” and while some OB/GYNs perform surgeries and could be using Zofran for post-operative nausea, Relators say that “internal Glaxo analyses conclude that the vast majority of the Zofran prescriptions written by obstetricians and gynecologists are for the off-label treatment of morning sickness.”

Glaxo Settles, But Denies Promoting Zofran Off-Label

Where Zofran was concerned, the government’s claims against GlaxoSmithKline were civil, not criminal charges, but the case never reached a court of law. The company, for that matter, never admitted any liability for promoting Zofran off-label. In fact, the company never admitted to promoting Wellbutrin SR off-label, either.

Instead, Glaxo entered a settlement agreement, in which the federal government agreed to “release GSK […] from any civil or administrative monetary claim” in exchange for $832,485,436 (plus interest). $2,320,640 of that total was intended specifically to settle the government’s allegations about Zofran, as was an unspecified portion of the $54,637,287 intended to settle allegations involving allegedly illegal kickbacks.

While GlaxoSmithKline has never admitted to promoting Zofran as a morning sickness treatment, the government has never disavowed its allegations. In the settlement, “made in compromise of disputed claims,” the United States was clear: “this Agreement is not a concession by the United States or the Relators that their claims are not well-founded.”

A Short Explanation Of Qui Tam Lawsuits

Qui tam, which is what whistleblower lawsuits are called in legal circles, comes from the Latin phrase, qui tam pro domino rege quam pro se ipso in hac parte sequitur. Translated, that means, “[he or she] who sues in this matter for the king as well as for himself.” Swap “federal government” out for “king” and you have the basic logic behind qui tam lawsuits.

Anyone who has knowledge that the federal government was defrauded in some way has a right, under the False Claims Act of 1863, to file a lawsuit on behalf of the government. At this point, the US Department of Justice, along with the US Attorney serving the jurisdiction in which the lawsuit has been filed, can choose to intervene. For 60 days, the lawsuit has to be kept under seal, so the government can begin conducting a preliminary investigation. Not even the named defendant is notified of the case against them, until the government decides whether or not to pursue an investigation.

Shredded Documents

Whistleblowers are usually federal contractors, since they have intimate knowledge of business dealings that involve the federal government. But since the government runs the two largest health insurers in America, Medicaid and Medicare, pharmaceutical company representatives become aware of their employer’s efforts to defraud the government fairly often, too. Of course, individual states also have a hand in administering Medicaid on the ground level. It’s not uncommon for states to join the federal government as plaintiffs in a qui tam lawsuit, and eventually, Gerahty and Burke were suing GlaxoSmithKline, not only on the federal government’s behalf, but on the behalf of 25 states and the District of Columbia as well.

When the government sues someone over allegations of fraud, the case almost always begins with a whistleblower. Between 1987 and 2014, more than 68% of the $44 billion recovered under the False Claims Act were the result of qui tam lawsuits, according to Department of Justice statistics.