Creative Kickbacks at Teva, Drug Reps Claim

(CN) - To disguise kickbacks it paid doctors prescribing its medications, Teva Pharmaceuticals listed the payments as honorariums from "sham" physician-speaker programs, whistle-blowers claim in Federal Court.

Former Teva sales representatives Charles Arnstein and Hossam Senousy hope to represent the United States, 29 states, the District of Columbia, and the cities of Chicago and New York in the complaint they filed against Teva Pharmaceuticals in Manhattan.

Though the New York attorney general launched an investigation of Teva over its marketing of the drugs at issue in the 2013 whistle-blower case, Copaxone and Azilect, Teva spokeswoman Doris Saltkill noted that the government has declined to intervene.

Copaxone is a medication for multiple sclerosis that faces increased competition from generics. It is currently the Israeli pharmaceutical company's bestselling drug, bringing in $4.3 billion in sales in 2013. Azilect is a drug for Parkinson's disease.

In their second amended complaint, unsealed earlier this month, Arnstein and Senousy say Teva compensates physicians to prescribe Copaxone and Azilect but organizes "pretextual" speaker programs through Allied Health Media to skirt review under the Anti-Kickback Statute.

"Teva currently pays physicians anywhere from $1,500 to $2,700 for each speaker program, which payments are disguised as 'honorarium' so that Teva can feign compliance with federal, state, and city kickback laws," the complaint alleges.

Doctors allegedly receive the money in a green envelope to emphasize that they have a lot to gain financially by working with Teva.

"Confirming the explicit nature of the quid pro quo relationship, physicians were only permitted to remain as paid speakers if they increased the number of prescriptions written for the covered drugs (or at least continued to write a significant number of prescriptions)," the complaint alleges.

The whistle-blowers say Teva paid more than $10 million to physicians in 2012 for speaking at its events. Its highest paid speaker, Dr. O.K. of Detroit, allegedly conducted 80 sessions, earning him an annual honorarium of $216,000. Dr. O.K. allegedly writes $200 million in Copaxone prescriptions per year, according to the complaint.

In addition to attracting few or no attendees, these programs offer little educational value, as the speakers essentially presented the same material again and again with a change of title or a shuffle of the slide deck to make the presentation appear somewhat different, the whistle-blowers say.

"It was common for physicians to rotate between serving as speakers and attendees to disguise the fraudulent nature of these programs and because it often was difficult, if not impossible, to persuade practitioners to attend events in which it was known that the physician-speaker had no new, material information to offer regarding the covered drugs," the complaint states.

Given the small population of patients who suffer from multiple sclerosis or Parkinson's, the number of speakers Teva paid to promote its drugs is "in a word, obscene," the whistle-blowers claim.

"Teva's illicit scheme was and is widespread and orchestrated from the highest levels of the company," according to the complaint.

Teva spokeswoman declined to comment on the case as it "is now the subject of pending litigation."

The whistle-blowers seek damages and civil penalties for violations of the False Claims Act and Medicare fraud.

They are represented by James Miller with Shepherd, Finkelman, Miller & Shah in Chester, Conn.

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