Posted on: Tuesday, May 29, 2001
Reports: Drug company to pay $840 million
Associated Press
BOSTON — The maker of a top-selling prostate cancer drug is expected to pay a record fine of more than $840 million to settle federal allegations that it hiked its prices and bribed doctors to prescribe it, according to published reports.
In addition to the U.S. attorney's case against TAP Pharmaceutical Products, patients who took the drug Lupron Depot have filed a separate class action lawsuit asserting that they were overcharged by millions of dollars.
According to a report in the Boston Globe's Monday edition, the company bribed individual doctors with free drug samples.
The company also allegedly offered an unnamed Massachusetts HMO $65,000 to get it to switch from using a competing drug.
In addition, TAP is accused of manipulating the average government reimbursement for the drug to ensure doctors would make at least a $100 profit per dose.
Lupron patients on Medicare often paid more than $1,000 a year for the drug, which helps halt the progression of prostate cancer.
"It's a rip-off of Medicare and the patients who paid their 20 percent co-payments," said Jeffrey Kodroff, lead attorney for the class action suit filed this month in U.S. District Court in Boston.
Abbott Laboratories of Illinois shares 50-50 ownership of TAP with the Japanese firm Takeda Chemical Industries.
Calls to Abbott's offices went unanswered yesterday, Memorial Day, and spokesmen for the company could not be reached for comment yesterday.
Kim Modory, a spokeswoman for the Illinois-based company, told the Boston Globe that TAP is negotiating a settlement with the U.S. attorney's office.
"The discussions in the investigation are ongoing,'' she said. ``TAP conducts its business ethically."
The U.S. attorney's office declined to comment.
Medicare, the federal health program that insures the elderly, paid billions of dollars over the past decade for Lupron. The drug is a hormone injection that blocks the body's production of testosterone and helps halt the progression of prostate cancer.
Some government investigators believe Medicare paid at least $100 million a year more than it should have from 1993 to 1998.
Authorities are also investigating whether Medicaid, the state-federal health insurance program for the poor, overpaid as well.
TAP, which has not been charged with any crime, is nonetheless expected to pay the government what could be the largest fine ever in a federal health fraud case, topping the $840 million paid last year by the hospital company HCA.
A settlement is expected this summer.
Lupron has been on the market since 1985, when it was approved by the Food and Drug Administration for prostate cancer as an alternative to removal of the testicles.
