Health Care Corruption, "No Dirty Little Secret," but "An Open Sore" - Lessons from India for the US

<a href="http://hcrenewal.blogspot.com/search/label/health%20care%20corruption">Health care corruption</a> is widely prevalent around the globe, but remains the great unmentionable.<br /><br /><b>Introduction: Global Health Care Corruption </b><br /><br />We have discussed health care corruption whenever we have an opportunity, but rarely does the topic appear in the English language media or in English language medical and health care journals, particularly in the US.  Some might think that this is because health care corruption is not so prevalent in the US and other "developed" countries.  However, our <a href="http://hcrenewal.blogspot.com/2013/07/43-believe-that-us-health-care-corrupt.html">most read post of all time</a> was about a Transparency International global survey that found that fully <b><i>43% of Americans believe our health care is corrupt.  </i></b><br /><br />A recent editorial in the BMJ(1) opened thus,<br /><br /><blockquote class="tr_bq"><i>Healthcare is a high risk sector for corruption</i>. Best estimates are that between <i>10% and 25% of global spend on public procurement of health is lost through corruption</i>. This is big bucks. Total global spend on healthcare is more than $7 trillion each year. Corruption takes many forms, depending on the country’s level of development and health financing system. The United States, for example, lost between $82bn and $272bn in 2011 to medical embezzlement, mostly related to its health insurance system. <i>No country is exempt from corruption.</i> Patients everywhere are harmed when money is diverted to doctors’ pockets and away from priority services. Yet this complex challenge is one that <i>medical professionals have failed to deal with, either by choosing to enrich themselves, turning a blind eye, or considering it too difficult</i>. Transparency International, a watchdog on these matters, defines corruption as the<i> abuse of entrusted power for private gain, which in healthcare encompasses bribery of regulators and medical professionals, manipulation of information on drug trials, diversion of medicines and supplies, corruption in procurement, and overbilling of insurance companies</i>. This is no dirty little secret. It is one of the biggest open sores in medicine.</blockquote><br />When health care corruption is actually discussed in polite circles, including the scholarly literature about medicine and health care, the discussion usually refers to corruption elsewhere.  In particular, in developed countries, discussion of health care corruption usually focuses on less developed countries. <br />Thus, maybe it should not be a surprise that the editorial by Jain et al accompanied another BMJ article about health care corruption in India. Yet by reading between their lines, both articles have global application, and are just as relevant to those nations in which the powers that be seem to have smugly concluded that health care corruption is only a problem in benighted third world countries.<br /><br /><b>A Personal View on Health Care Corruption in India</b> <br /><br />David Berger a UK trained general practitioner (GP), discussed the corruption he found while volunteering in India.(2)  His introduction was,<br /><br /><blockquote class="tr_bq">'<i>The corruption strangles everything, Sir. It’s like a cancer</i>.' Accompanied by apologetic shrugs and half smiles, statements like this are commonly heard in India. I knew this was the case before I went to work as a volunteer physician in a small charitable hospital in the Himalayas, but what I didn’t realise was <i>how far the corruption permeates the world of medicine and the corrosive effect it has on the doctor-patient relationship.</i></blockquote><br />Berger raised several issues: <br /><br /><u>Neoliberalism and Privitization</u><br /><br /><br /><blockquote class="tr_bq">The healthcare system itself is <i>a model of inequity; it is one of the most privatised in the world</i>, with out of pocket expenditure on healthcare at more than 70%, far higher even than in the United States. This phenomenon is at least partly the result of the <i>neoliberal World Bank policies of the 1990s, which mandated a reduction in public financing of healthcare</i>, fuelling growth of the private sector. The latest in technological medicine is available to people who can pay, albeit at a high price,...</blockquote><br /><u>Kickbacks to Physicians for Referrals</u><br /><br />This is a common form of corruption in India.<br /><br /><blockquote class="tr_bq"><i>all investigations attract a 10-15% kickback to the referring doctor</i>. One day, the marketing executive for this clinic had turned up at the hospital with an envelope full of cash—the commission for investigations ordered in the past few months. The senior doctor refused it and stipulated that in future the commission was to be paid back to patients, which is why the resident had to sign the form. The country’s <i>doctors and medical institutions live in an 'unvirtuous circle' of referral and kickback</i> that poisons their integrity and destroys any chance of a trusting relationship with their patients.</blockquote><br /><u>Kickbacks from Pharmaceutical Firms</u><br /><br /><blockquote class="tr_bq">There is also widespread corruption in the pharmaceutical industry, with <i>doctors bribed to prescribe particular drugs.</i> Tales are common of hospital directors being given top of the range cars and other inducements when their hospitals sign contracts to prescribe particular antibiotics preferentially.<br /><br />I met a former pharmaceutical sales executive who left the industry, sickened by the corrupt practices he was supposed to employ. Working for one of the largest drug companies in the country, <i>he was expected to bribe doctors with money and luxury goods. </i>The crunch came when a doctor demanded that the company fly him to Thailand for a holiday and then provide him with prostitutes at his home. When the company representative queried this, his manager told him to comply, and he felt he had no choice but to resign, protesting that he was 'not a pimp.'</blockquote><br /><u>Huge Fees Charged to Medical Students</u><br /><br /><blockquote class="tr_bq">Endemic corruption extends to medical studies themselves.<i> In another 'unvirtuous circle,' students can have to pay very large “donations” (perhaps $200 000 or more, some 20 times the average doctor’s annual salary) to get into the rapidly increasing number of private medical colleges and to get on to sought after postgraduate training schemes. </i>This means that doctors can have <i>high levels of debt or family obligation when qualifying, which is a strong incentive against working as generalists in rural areas and favours them practising technological medicine for maximum profit</i> in urban areas to try to recoup their investment.</blockquote><br /><br /><b>The US Parallels</b><br /><br />All the issues above have clear parallels in the US.  But in the US, hardly anyone talks about health care corruption as a local or national problem.   <br /><br /><u> Neoliberalism and Privitization</u><br /><br />The US is known for its increasingly private health care system, pushed by the ideology of "neoliberalism" or "<a href="http://hcrenewal.blogspot.com/search/label/economism">economism</a>."  US health insurance is mostly provided by private, for-profit corporations, not non-profits, or government agencies.  US hospitals and hospital systems are increasingly private, as are other organizations that provide direct health care, e.g., <a href="http://hcrenewal.blogspot.com/search/label/hospices">hospices</a>.  US physicians are increasingly <a href="http://hcrenewal.blogspot.com/search/label/corporate%20physician">corporate employees</a>.  India may be more privatized, but the US is close behind. <br /><br /><u> Kickbacks to Physicians for Referrals</u><br /><br />We have frequently posted about cases in which there was good evidence that physicians in the US got <a href="http://hcrenewal.blogspot.com/search/label/kickbacks">kickbacks</a>, or bribes.  Most involved legal settlements of cases in which there were allegations of widespread kickbacks.  Some of them involved kickbacks for referrals (e.g., the settlement involving Omnicare in 2013, look <a href="http://hcrenewal.blogspot.com/2013/10/there-they-go-again-omnicare-to-settle.html">here</a>).  On the other hand, resolution of cases involving kickbacks to small groups of physicians for referrals are so common in the US that we rarely discuss individual examples. For example, I found the following headlines from the last few weeks:<br /><br /><blockquote class="tr_bq"><a href="http://6abc.com/news/nj-arrests-more-than-12-in-alleged-kickback-scheme/134025/">NJ Arrests More than 12 in Alleged Kickback Scheme</a><br /><a href="http://www.nj.com/morris/index.ssf/2014/06/randolph_doctor_jailed_for_20_months_for_role_in_massive_kickbacks_scheme.html">Randolph Doctor Jailed for 20 Months for Role in Massive Kickback Scheme</a><br /><a href="http://www.ocregister.com/articles/ahmed-626942-indictment-million.html">O.C. Grand Jury Indicts 15 Doctors  </a>  </blockquote><br />We have also written extensively about how <a href="http://hcrenewal.blogspot.com/search/label/corporate%20physician">corporate physicians</a> are pushed to avoid "leakage," that is referral of patients to health care facilities not owned by their corporate employees (e.g., look <a href="http://hcrenewal.blogspot.com/2011/02/new-steward-health-care-will-superbowl.html">here</a>).  <br /><br /><br /><u>Kickbacks from Pharmaceutical Firms</u><br /><br />We have posted about numerous examples of widespread <a href="http://hcrenewal.blogspot.com/search/label/kickbacks">kickbacks</a> given by health care corporations, particularly pharmaceutical, biotechnology, and medical device companies, to physicians to enhance their prescriptions for or use of their products.  Most recent examples include legal settlements by Pfizer about kickbacks to promote use of Neurontin (one of many by that company, look <a href="http://hcrenewal.blogspot.com/2014/06/justice-delayed-is-justice-denied.html">here</a>); by Medtronic to promote use of its pacemakers and defibrillators (look <a href="http://hcrenewal.blogspot.com/2014/06/fool-me-twice-boehringer-ingelheim.html">here</a>); and by Johnson and Johnson to promote use of Risperdal (look <a href="http://hcrenewal.blogspot.com/2013/11/another-and-huge-22-billion-settlement.html">here</a>).  Moreover, we have discussed many examples of physicians paid as "consultants" or given "honoraria" for talks by companies whose goal was to use these physicians as "<a href="http://hcrenewal.blogspot.com/search/label/key%20opinion%20leaders">key opinion leaders</a>," actually covert marketers for their drugs or devices.  Many of the <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest </a>we have discussed actually seemed to involve kickbacks or bribes, even though some physicians and policy-makers like to refer to them as "collaborations" with industry to increase "innovation."  <br /><br /><u>Huge Fees Charged to Medical Students</u><br /><br />The huge tuition charged US medical students, their huge resulting debt, and their resulting tendency to pursue procedural specialties rather than cognitive specialties, particularly primary care, have become cliches.<br /><br />So it seems that the US has some of the same possible risk factors for corruption as does India, that there are many cases in the US of activities that are called corruption in India, and that a near majority of US citizens feel their health care is corrupt.  But health care corruption remains a largely taboo topic in the US.  <br /><br /><b>Summary: Some General Approaches </b><br /><br />The editorial by Jain et al that to its authors' credit emphasized that health care corruption is a global problem suggested some general approaches to corruption(2)<br /><br /><blockquote class="tr_bq"><i>Good governance, transparency, and zero tolerance</i> must form the basis of any anti-corruption strategy. Changes must be implemented in society at large for reform to be sustained. <i>Better governance requires rigorous legislation and functioning administrative mechanisms to provide fiscal oversight. Ethical standards of conduct must be explicitly established and staff held accountable for their performance.</i> <i>Punitive measures should be available to serve as a deterrent.</i> <i>Honest behaviour must be rewarded</i>. These policies may be ineffective, however, unless healthcare professionals are assured of a decent salary and <i>fair opportunities for professional growth</i></blockquote><br />Also<br /><br /><blockquote class="tr_bq">Simple and effective <i>channels for complaints must be established, and appropriate legal support and protection provided to whistleblowers</i>. Looking deeper, <i> underlying issues such as education and social justice must not be forgotten</i> if the battle against corruption is to be sustained and eventually won. Answers may also lie outside the world of medicine. </blockquote><br />Note that we have discussed all these approaches: <a href="http://hcrenewal.blogspot.com/search/label/accountability">accountability</a>, <a href="http://hcrenewal.blogspot.com/search/label/transparency">transparency</a>, <a href="http://hcrenewal.blogspot.com/search/label/governance">governance</a>, <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20trustees">boards of trustees</a>, <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20directors">boards of directors</a>, <a href="http://hcrenewal.blogspot.com/search/label/ethics%2F%20integrity%20policies">ethics and integrity policies</a> , <a href="http://hcrenewal.blogspot.com/search/label/impunity">impunity</a>, <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, and education about corruption (look <a href="http://hcrenewal.blogspot.com/2010/12/lancet-emphasizes-threats-to-academic.html">here</a>).  <br /><br /><br />Not that any of them have been widely adopted.<br /><br />So to repeat an ending to <a href="http://hcrenewal.blogspot.com/2013/07/43-believe-that-us-health-care-corrupt.html">one of my previous posts</a> on health care corruption....  if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations' misbehavior, and thus taking such action will require some courage.<br /><br /><b>References</b><br /><br />1.  Jain A, Nundy S, Abbasi K. Corruption: medicine's dirty open secret.  Brit Med J 2014.  Link <a href="http://www.bmj.com/content/348/bmj.g4184">here</a>.  <br /><br />2.  Berger D. Corruption ruins the doctor-patient relationship in India.  Brit Med J 2014.  Link <a href="http://www.bmj.com/content/348/bmj.g3169">here</a>.

Health Care Corruption, "No Dirty Little Secret," but "An Open Sore" - Lessons from India for the US

Health care corruption is widely prevalent around the globe, but remains the great unmentionable. Introduction: Global Health Care Corrupti...

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Justice Delayed is Justice Denied? - Another Neurontin Settlement by Pfizer 20 Years After the Alleged Events

We have argued repeatedly against the strategy used by US government authorities to address allegations of bad behavior in health care (and elsewhere) by pursuing monetary <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">settlements</a> against the companies involved, rather than trying to impose penalties on the people who may have done wrong.  There are many apparent things wrong with this approach (which we will rant about again below), but one aspect that deserves more attention is its slowness.<br /><br /><b>The Latest Pfizer Settlement </b><br /><br />For example, Bloomberg <a href="http://www.bloomberg.com/news/2014-06-02/pfizer-agrees-to-325-million-settlment-over-neurontin.html">reported</a> in early June about yet another settlement by Pfizer of allegations about the marketing of the drug Neurontin (gabapentin, made by its Parke-Davis subsidiary):<br /><br /><blockquote class="tr_bq">Pfizer Inc agreed to pay $325 million to settle a lawsuit brought by health-care benefit providers who claimed the drugmaker marketed the epilepsy drug Neurontin for unapproved uses.<br /><br />The settlement, which needs approval from a federal judge in Boston<a href="http://topics.bloomberg.com/boston/"></a>, would end a case over <i>claims that the company’s Parke-Davis unit schemed to market the drug for unapproved conditions <b>as early as 1994. </b></i></blockquote><br />Thus this settlement occurred 20 years after the first actions were alleged to have occurred.<br /><br /><b>Officially, "Pfizer Didn't Admit Wrongdoing" Despite Allegations of Kickbacks </b><br /><br />Otherwise, this particular settlement appears unremarkable.  As is typical, the federal authorities and the judge allowed a settlement which obscures what really happened, because,<br /><br /><blockquote class="tr_bq">The Boston accord will resolve 'all third-party payer claims regarding off-label promotion' and state antitrust claims over Neurontin sales, Steve Danehy, a company spokesman, said in a statement. <i>Pfizer didn’t admit wrongdoing</i>, he said. </blockquote><br />Nonetheless, the allegations were about kickbacks to physicians, a behavior that ought to concern ethical health care professionals.<br /><br /><br /><blockquote class="tr_bq">The companies alleged that Parke-Davis, part of Warner-Lambert Co., <i>paid kickbacks to doctors to encourage them to prescribe the anti-seizure drug for unapproved uses such as bipolar and panic disorders. </i><br /> <br />Pfizer acquired Warner-Lambert in 2000 and 'deliberately expanded the promotion of off-label uses,' lawyers for the benefits firms said in an amended complaint filed in 2011. </blockquote><br /><b>So Why Pay $325 Million? </b><br /><br />So Pfizer appears to have paid another $325 million to allow the company to claim again that these allegations were never proven.  Yet if these allegations were really entirely false, one might think it would have cost the company less than that to take the case to trial?<br /><br />As Judge Rakoff noted in rejecting a settlement between the US Department of Justice and Citigroup of allegations of financial misbehavior (look <a href="http://hcrenewal.blogspot.com/2011/11/will-citigroup-ruling-challenge-health.html">here</a>),<br /><br /><blockquote class="tr_bq">As for common experience, <em><strong>a consent judgment that does not involve any admissions and that results in only very modest penalties is just as frequently viewed, particularly in the business community, as a cost of doing business imposed by having to maintain a working relationship with a regulatory agency</strong></em>, rather than as any indication of where the real truth lies.</blockquote><br />Yet the latest Pfizer Neurontin settlement, occurring 20 years after the events in question, officially gives no indication of where the real truth lies.<br /><br /><b>No Admitted Wrongdoing, Despite Past Evidence, Including a RICO Conviction </b><br /><br />These very late denials of admission of wrongdoing seem hollow when they are compared to the revelations that have appeared over the years from various legal actions about Neurontin marketing.  As we have discussed <a href="http://hcrenewal.blogspot.com/search/label/Neurontin">here</a>, documents revealed by previous Neurontin litigation have uncovered a catalog of deceptive marketing practices, including <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">manipulation of clinical research</a>, including its design and the analysis and dissemination of its results,  (look <a href="http://hcrenewal.blogspot.com/2012/10/when-clinical-trials-are-meant-for.html">here</a> and <a href="http://hcrenewal.blogspot.com/2009/11/editorial-that-wasnt-evidence-for.html">here</a>), the <a href="http://hcrenewal.blogspot.com/search/label/suppression%20of%20medical%20research">suppression of clinical research</a> (look <a href="http://hcrenewal.blogspot.com/2008/10/did-pfizer-marketers-suppress-and.html">here</a>), and <a href="http://hcrenewal.blogspot.com/search/label/stealth%20marketing">stealth marketing campaigns</a>, including manipulation of <a href="http://hcrenewal.blogspot.com/search/label/CME">continuing medical education</a> through "unrestricted educational grants," captive speakers bureaus, docile and well-paid academics and physicians on advisory boards and consultants, the use of <a href="http://hcrenewal.blogspot.com/search/label/key%20opinion%20leaders">key opinion leaders</a> as marketers, and publications strategies including <a href="http://hcrenewal.blogspot.com/search/label/ghost%20writing">ghost writing</a> (look <a href="http://hcrenewal.blogspot.com/2006/08/stealth-marketing-of-neurontin.html">here</a>).   <br /><br /><br />Note also that this is only the latest chapter in the long saga of Neurontin, for whose mismarketing Pfizer has already shelled out a lot of money (for the most recent example look <a href="http://hcrenewal.blogspot.com/2014/04/the-pervasiveness-of-health-care.html">here</a>, then see<a href="http://hcrenewal.blogspot.com/2006/08/stealth-marketing-of-neurontin.html"> this post</a>, and look <a href="http://hcrenewal.blogspot.com/search/label/Neurontin">here</a> for the collection).  Pfizer has an amazing record of bad behavior on view <a href="http://hcrenewal.blogspot.com/search/label/Pfizer">here</a>.  In fact, it has had a conviction as a Racketeering Influenced Corrupt Organization (RICO) on the basis of its previous marketing of Neurontin (look <a href="http://hcrenewal.blogspot.com/2013/12/blogscan-us-supreme-court-turns-down.html">here</a>), which was recently upheld on appeal (look <a href="http://hcrenewal.blogspot.com/2013/12/blogscan-us-supreme-court-turns-down.html">here</a>).   Yet Pfizer, convicted as a racketeering influenced corrupt organization, gets to officially deny wrong-doing once again.  And through all this, no Pfizer executive who authorized or directed any of this conduct, or who got a big bonus based on Neurontin revenues hiked by deception, has apparently had to suffer any negative consequences.<br /><br /><b>Summary: the Usual Rant </b><br /><br />So here we go again,...  The failure of the current limp legal efforts against such corruption is evident by how many corporations have become ethical repeat offenders.  Pervasive bad behavior by large health care organizations has got to be a major cause of our ongoing health care dysfunction.  So, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue.<br /><br />True health care reform would include much more vigorous enforcement of existing laws to make sure health care organizations and their leaders actually put health, rather than personal enrichment, first. 

Justice Delayed is Justice Denied? - Another Neurontin Settlement by Pfizer 20 Years After the Alleged Events

We have argued repeatedly against the strategy used by US government authorities to address allegations of bad behavior in health care (and ...

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Fool Me Twice? - Boehringer Ingelheim, Medtronic Settle Lawsuits Alleging Deceptive Marketing

It seems like it has been really quiet on the legal settlement front in the US, but maybe corporate executives wanted to wait until things calmed down after the unofficial start of summer to let out news that some people might not think reflected well on them.  So this week it was time to announce two new legal settlements of allegations of bad behavior by corporate health were announced, as we will list in alphabetical order....<br /><br /><b>Boehringer Ingelheim Settles Suits Alleging it Hid Data About Pradaxa Harms</b><br /><br />As <a href="http://www.bloomberg.com/news/2014-05-28/boehringer-pays-650-million-to-end-blood-thinner-cases.html">per Bloomberg</a>,<br /><br /><blockquote class="tr_bq">Boehringer Ingelheim GmbH, the German family-owned drugmaker,<i> agreed to pay $650 million to settle the majority of lawsuits filed over its blood thinner Pradaxa, which has been linked to more than 500 patient deaths.</i></blockquote><br />The major allegations were about deception,<br /><br /><blockquote class="tr_bq"> Patients and their families alleged<i> Boehringer executives knew Pradaxa posed a deadly risk to some consumers when they brought it to the U.S. market in October 2010.</i></blockquote><br />In particular, as we <a href="http://hcrenewal.blogspot.com/2014/02/cant-this-be-avoided-how-corporate.html">discussed</a> in more detail in February, 2014, <br /><br /><blockquote class="tr_bq">Documents made public as part of patients’ Pradaxa suits showed <i>Boehringer officials didn’t disclose to U.S. regulators a data analysis that indicated the blood-thinning drug may have caused more fatal bleeding</i> after it was cleared for sale than in a study used to win approval.  </blockquote><br /><a href="http://www.nytimes.com/2014/05/29/business/international/german-drug-company-to-pay-650-million-to-settle-blood-thinner-lawsuits.html">Per </a>the New York Times, Boehringer Ingelheim executives continued to maintain<br /><br /><blockquote class="tr_bq">that it stood behind the safety and efficacy of Pradaxa and continued to believe that the lawsuits lacked merit, but that settling the case <i>allowed the company to move on.</i> 'Time and again, the benefits and safety of Pradaxa have been confirmed,' said Desiree Ralls-Morrison, senior vice president and general counsel of Boehringer Ingelheim USA.</blockquote><br />This is typical of most legal settlements involving large health care organizations, whether they end lawsuits brought by private parties or by the US government.  The settlements often allow the parties to continue to disagree, do not establish guilt or innocence, but leave one to wonder why executives would pay so much of admittedly other peoples' money just to "move on" without upholding their or their companies' honor, especially when documents revealed and legal findings made in cases prior to settlement remain unchallenged.<br /><br />So this settlement also comes after December, 2013, as we discussed <a href="http://hcrenewal.blogspot.com/2013/12/a-second-order-cover-up-judge-finds.html">here</a>, December, when a judge<br /><br /><blockquote class="tr_bq">ordered Boehringer to pay a $931,000 fine in December for <i>failing to preserve 'countless' files on Pradaxa’s development and marketing. Patients’ lawyers say Boehringer should have placed an effective 'litigation hold' on the documents</i>, forcing employees to preserve them.</blockquote><br />(The above <a href="http://www.bloomberg.com/news/2014-05-28/boehringer-pays-650-million-to-end-blood-thinner-cases.html">per Bloomberg</a>.)  That finding, which the settlement does not dispute, does not fill one with confidence about the openness and transparency of Boehringer Ingelheim managers.<br /><br />Also the settlement does not refute documents released during this litigation which suggested that Boehringer Ingelheim personnel tried to influence, or manipulate a company sponsored research paper to prevent it from contradicting the company's official marketing message that Pradaxa administration does not require monitoring of patients with blood tests (as we discussed <a href="http://hcrenewal.blogspot.com/2014/02/cant-this-be-avoided-how-corporate.html">here</a>).     <br /><br />Note further that this case comes only a few years after a case in which Boehringer Ingelheim settled allegations of deceptive marketing of drugs other than Pradaxa, as we discussed <a href="http://hcrenewal.blogspot.com/2012/10/just-another-day-at-office-boehringer.html">here</a>. <br /><br /><b>Medtronic Settles Suit Alleging Kickbacks to Physicians</b><br /><br />The most extensive and colorful <a href="http://www.startribune.com/business/260978651.html">report</a> was in the Minneapolis Star-Tribune, <br /><br /><blockquote class="tr_bq"><i>Medtronic Inc. will pay the U.S. Justice Department $9.9 million to settle a whistleblower lawsuit that accused the company of paying kickbacks to doctors for using its defibrillators and pacemakers.</i><br /><br />The alleged kickbacks, according to the newly unsealed suit, included '<i>gifts of wine and alcohol</i>' and '<i>trips to strip clubs</i>' paid for by the Fridley-based company. The lawsuit also says Medtronic paid to fly doctors to events in San Francisco, Las Vegas, New Orleans, New York, Minneapolis and other cities that some physicians used as 'a free vacation.'</blockquote><br />More colorful details,<br /><br /><blockquote class="tr_bq">The lawsuit, whose details remained secret until Tuesday, describes Medtronic <i>business plans with names such as 'Project Wildfire' that had sales representatives offer 'cash payments, expensive trips and meals, expensive gifts and entertainment to physicians as kickbacks in exchange for the physicians’ agreement to implant Medtronic devices.'</i><br /><br />The lawsuit alleged that Medtronic '<i>funneled millions of dollars in unrestricted grant money to physicians</i>' to get them to encourage the use of Medtronic defibrillators and pacemakers in patients whose 'mild heart failure symptoms did not meet [Food and Drug Administration] criteria for an implantable device.'<br /><br />Those procedures were not only unnecessary, the suit alleged, but potentially dangerous.<br /><br />The suit describes <i>payments of thousands of dollars in speaking fees to doctors for attending dinners at which they spoke for only a few minutes</i>, if at all. In other cases, <i>Medtronic allegedly prepared entire presentations that physicians offered almost verbatim.</i><br /><br />The suit talks of a plan that 'instructed sales representatives to personally review patient charts in friendly doctor’s offices' and to flag those patients the sales representative 'felt should receive an implant.'</blockquote><br />Note that commercially supplied "unrestricted grant money" is now the lifeblood of many ostensibly academic continuing medical education (CME) programs, but this case suggests that corporate executives may believe they are paying such money to get doctors to use their products.  Note further that many physicians defend their receipt of money in payment of talks they have given on behalf of commercial firms as fair payment for providing unbiased education, but this case suggests that corporate executives may believe they are paying such money for marketing, and/or to get the supposedly unbiased physician speakers to use their products.  <br /><br />Once again, the settlement did not resolve the allegations. <br /><br /><blockquote class="tr_bq"> Medtronic said it <i>did not admit that any of its activities were improper or illegal</i> and that the settlement would bring to a close a long-running review of events dating from 2001 to 2009.</blockquote><br />Also,<br /><br /><blockquote class="tr_bq"> Asked to comment specifically on the strip club allegations and the accusation that it financially facilitated unnecessary implantations, Medtronic<i> reiterated that its $9.9 million payment was not an admission that it had done anything illegal or improper.</i></blockquote><br />See my comments above.  Why would executives with even the slightest ability to feel shame not contest such allegations if they were untrue?  But maybe many of today's corporate health care executives are not capable of feeling shame, and of course they get to pay off these lawsuits with other peoples' money.<br /><br />By the way, this is just one of many Medtronic settlements.  As Bloomberg <a href="http://www.bloomberg.com/news/2014-05-28/medtronic-settles-suit-over-heart-device-kickback-claims.html">summarized</a>,<br /><br /><blockquote class="tr_bq"> Medtronic agreed in 2007 to <i>pay about $130 million to settle consumer suits accusing the device maker of hiding defects in its defibrillators</i>. The company agreed to a <i>$268 million settlement of suits in 2010 over allegations that fractured wires in another line of defibrillators caused at least 13 patient deaths.</i></blockquote><br />In fact, Medtronic has provided our blog with <a href="http://hcrenewal.blogspot.com/search/label/Medtronic">lots of material</a>.  We first <a href="http://hcrenewal.blogspot.com/2006/01/medtronics-payments-to-doctors-too.html">discussed</a> detailed and vivid allegations that Medtronic had been paying off doctors starting in 2003 here in 2006.  Medtronic has been involved in other lawsuits alleging various kinds of deception. <br />-  In 2011, it settled for $23.5 million two other federal lawsuits alleging it paid kickbacks to encourage physicians to implant its devices (look <a href="http://hcrenewal.blogspot.com/2011/12/medtronic-settles-yet-again.html">here</a>).   <br />- In 2008, Medtronic subsidiary Kyphon settled a suit for $75 million and signed a corporate integrity agreement for allegations that it defrauded Medicare through a scheme that lead to excessive hospitalization for patients who received the company's spine surgery device (link <a href="http://hcrenewal.blogspot.com/2008/05/corporate-integrity-agreement-for.html">here</a>)<br />- In 2006, Medtronic subsidiary Sofamor Danek settled for $40 million allegations that it gave kickbacks to doctors in the form of sham consulting fees and lavish trips (look <a href="http://hcrenewal.blogspot.com/2011/12/medtronic-settles-yet-again.html">here</a>). <br /><br />Yet we are now writing at the end of May, 2014, and Medtronic is still settling lawsuits involving vivid allegations of payoffs to physicians, and its executives are still saying nothing to see here, move on.<br /><br /><b>Summary</b><br /><br />These sorts of cases provide evidence that large health care corporations, including not just pharmaceutical companies, but biotechnology and medical device companies, commonly use deceptive and unethical practices to market their products.  Such marketing lets them charge high, even outrageous prices and sometimes results in patients getting expensive treatments that do them no good, or worse, that do more harm than good.  Some of the executives of these companies doubtless got large bonuses, and may have gotten millions in compensation partially because of the sales generated by these practices.  However, they get to walk away from such lawsuits without any personal accountability, just by paying out a few millions, or billions, of the company's, that is, other peoples' money.  They get do pay that money without any other explanation that it eliminates distractions and allows them to move on (with whatever they have already made).<br /><br />The more this goes on, the more health care dysfunction continues, and the more the health care oligarchy prospers.  As we have written many times,<br /><br /><blockquote class="tr_bq">penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.  Note that each of the companies discussed above have had their previous ethical lapses discussed in previous Health Care Renewal posts. <br /><br />The continuing march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">settlements</a>, and sometimes <a href="http://hcrenewal.blogspot.com/search/label/crime">criminal</a> convictions involving major health care organizations should be regarded merely as providing a floor to estimates of the extent of bad behavior by large health care organizations. Bad behavior may not be reported, or lead to legal action, and legal action may not lead to settlements or convictions. However, it is amazing how many organizations that were once regarded as exemplary have had to settle, or plead guilty, or been convicted.<br /><br />When it comes to health care's leadership, society seems to have acceded to defining deviancy down. Until we start holding health care leaders to high standards, expect their organizations not to uphold high standards.</blockquote><br />(That version was from 2010, posted <a href="http://hcrenewal.blogspot.com/2010/10/last-weeks-scandals.html">here</a> re Medtronic's 2010 settlement. You heard it here first.  Medtronic is still settling, and according to its <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=76126&p=IROL-secToc&TOC=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9vdXRsaW5lLnhtbD9yZXBvPXRlbmsmaXBhZ2U9OTAwMDI5NiZzdWJzaWQ9NTc%3d&ListAll=1">most recent proxy</a>, from 2013, the annual total compensation of its CEO was last reported to be <b><i>$8,975,886</i></b>.) <br /><br /><br />

Fool Me Twice? - Boehringer Ingelheim, Medtronic Settle Lawsuits Alleging Deceptive Marketing

It seems like it has been really quiet on the legal settlement front in the US, but maybe corporate executives wanted to wait until things c...

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The Pervasiveness of Health Care Corruption as Shown by Another Roundup of Legal Settlements

Legal settlements are one way to document unethical and even corrupt behavior by large health care organizations, even if they may not deter bad behavior in the future.  It is time for another roundup of settlements by large pharmaceutical and device companies, presented in alphabetical order<br /><br /><b>Abbott Laboratories</b><br /><br />This one goes back to late December, 2013.  As <a href="http://www.chattanoogan.com/2013/12/27/266328/Abbott-Laboratories-To-Pay-5.475.aspx">described</a> in the Chattanoogan (from Tennessee):<br /><br /><blockquote class="tr_bq">Abbott Laboratories, a global healthcare company, has agreed to pay $5.475 million to settle alleged violations of the False Claims Act, and other federal laws and regulations in connection with the operation of its medical device business which manufactures, markets and supplies carotid, biliary, and peripheral vascular products.</blockquote><br />The US Justice Department accused Abbott of kickbacks to physicians,<br /><br /><blockquote class="tr_bq"> As alleged in the settlement agreement, between 2005 and 2010, through its employees and a third party continuing medical education providers, <i>Abbott offered physicians paid teaching and training assignments, consulting arrangements, speaking engagements, and/or sponsorship grants for physician conferences, for the purpose of inducing physicians to arrange for or recommend that the hospitals with which they were affiliated purchase or order Abbott’s carotid, biliary and peripheral vascular products.</i></blockquote><br />Note in particular that the kickbacks were disguised as payments for consulting or speaking. <br /><br />As is usual in such cases, no individual seems to have paid any penalty or been subject to any punishment.  Because this was a legal settlement, the company did not admit wrongdoing.<br /><br />Abbott's previous issues are discussed <a href="http://hcrenewal.blogspot.com/search/label/Abbott">here</a>, including a <a href="http://hcrenewal.blogspot.com/2012/05/abbott-pleads-guilty-settles-for-16.html">$1.6 billion settlement in 2012</a>.  <br /><br /><b>Baxter International</b><br /><br />This was <a href="http://www.modernhealthcare.com/article/20140421/INFO/304219992">reported</a> in April, 2014 by Modern Healthcare,<br /><br /><blockquote class="tr_bq"> Baxter International agreed to pay $64 million to settle a class-action lawsuit that alleged the Deerfield, Ill.-based company and some of its competitors <i>colluded to raise prices</i> of plasma-based therapies.</blockquote><br />Unlike the other cases above and below, this seemed to be a purely financial misadventure, although one that clearly increased health care costs,<br /><br /><blockquote class="tr_bq">Hospitals and drug distributors, saying they bought the plasma products at inflated prices, sued in 2009 Baxter; Victoria, Australia-based CSL; and the Plasma Protein Therapeutics Association, an Annapolis, Md.-based trade group.</blockquote><br />Once more, the company admitted no wrongdoing, and no individuals seemed to be subject to any negative consequences.   <br /><br />Baxter International's previous misadventures are <a href="http://hcrenewal.blogspot.com/search/label/Baxter">here</a>, including the <a href="http://hcrenewal.blogspot.com/2011/08/jama-article-begs-key-questions-about.html">striking case</a> of its marketing of contaminated and sometimes deadly heparin made from Chinese pigs.  <br /><br /><b>Endo Health Solutions</b><br /><br />This one is from February, 2014, as<a href="http://www.bloomberg.com/news/2014-02-21/endo-to-pay-193-million-in-lidoderm-marketing-probe.html"> reported</a> by Bloomberg<br /><br /><blockquote class="tr_bq">Endo Health Solutions entered a deferred-prosecution agreement and will pay $193 million to settle whistle-blower claims that it <i>marketed the shingles drug Lidoderm for unapproved purposes</i>, the U.S. said. <br />Endo will pay $20.8 million in forfeitures and $171.9 million in civil false claims settlements with the states and the U.S. government, the Justice Department said today in a statement. </blockquote><br />This one was all about marketing for uses not approved by the US Food an Drug Administration,<br /><br /><blockquote class="tr_bq">Between 2002 and 2006, Endo sales managers instructed some representatives on how to<i> expand 'sales conversations' with doctors beyond the treatment of shingles-related pain</i>, the U.S. said. Under the deferred-prosecution agreement, Endo admitted that it intended Lidoderm to be used for uses not approved by the U.S. Food and Drug Administration, the Justice Department said. </blockquote><br />Note that this case involves false claims, that is, fraud, because it is illegal to bill government programs for unapproved uses.<br /><br />Again, no individual suffered any consequences, and the company offered the usual kind of statement that admitted neither responsibility nor guilt,<br /><br /><blockquote class="tr_bq">'We are pleased to resolve this matter and are confident that we have robust programs in place to assist us in satisfying our legal and regulatory agreements,' Endo Chief Executive Officer Rajiv De Silva said in a statement.  </blockquote><br />One wonders, as usual, why a company would pay so much merely to avoid the legal expenses of a trial, unless of course the lawyers suspected the trail would not go well?<br /><br /><b>Hospira</b><br /><br />This one was about hiding quality problems due to cost-cutting from investors, as<a href="http://www.reuters.com/article/2014/03/27/hospira-lawsuit-idUSL1N0MO2BS20140327"> reported</a> by Reuters in March, 2014.   <br /><br /><blockquote class="tr_bq">Hospira Inc <span id="articleText"><span class="focusParagraph">has agreed to pay $60 million to resolve a class action lawsuit accusing the drug maker of misleading investors about <i>quality control problems that undermined an initiative to improve the company's margins and operations.</i></span></span></blockquote><br /><span id="articleText"><span class="focusParagraph">The details included,</span></span><br /><br /><blockquote class="tr_bq"><span id="articleText">As Hospira was promising to address issues raised by the U.S. Food and Drug Administration following inspections, the plaintiffs said the company was '<i>making the problems worse by gutting quality control efforts through cost cutting aimed at boosting short-term profitability</i>.'<br /><br /><span id="midArticle_7"></span>The lawsuit said those cost-cutting moves stemmed from a March 2009<i> initiative called 'Project Fuel' intended to increase shareholder value by eliminating underperforming and duplicative units and reducing its global workforce.</i><br /><br /><span id="midArticle_8"></span>Plaintiffs contended the <i>cuts in the budget and workforce hurt Hospira's quality control </i>efforts, particularly at Rocky Mount, the company's largest facility.<br /><br /><span id="midArticle_9"></span>An FDA inspection in January 2010 of the Rocky Mount facility found a number of <i>problems with the company's quality control and drug validation processes</i>, the lawsuit said, and the agency issued a warning letter that April.</span></blockquote><span id="articleText"></span><br /><br />Note that this involved quality control problems presumably in drug or device production, possibly leading to safety risks for patients.  Yet it was investors who brought the lawsuit.<br /><br />Note also that this seemed to be a clear case in which cost-cutting measures meant to improve short-term corporate revenue lead to problems that could have caused such risks.   <br /><br />One interesting feature of this case was that company executives were named as defendant (presumably again because it was investors, not patients or law-enforcement officials who initiated the suit.)<br /><br /><br /><blockquote class="tr_bq"><span id="articleText"><span id="articleText">The lawsuit ... also named executives including Chief Executive Officer Michael Ball as defendants,...</span></span></blockquote><span id="articleText"></span><br /><br /><span id="articleText">I cannot find any information about whether these executives were personally liable for any payments, however.   </span><br /><span id="articleText"><br /></span><b><span id="articleText">Pfizer</span></b><br /><span id="articleText"><br /></span><span id="articleText">This is yet another settlement involving the marketing of Neurontin, as <a href="http://www.bloomberg.com/news/2014-04-22/pfizer-agrees-to-pay-190-million-to-settle-neurontin-case-1-.html">reported</a> by Bloomberg in April, 2014,</span><br /><span id="articleText"><br /></span><br /><blockquote class="tr_bq"><span id="articleText"><span id="articleText">Pfizer Inc </span>the world’s biggest drugmaker, agreed to pay $190 million to end a lawsuit claiming it <i>violated federal antitrust laws by delaying generic versions of its Neurontin epilepsy drug. </i><br /></span></blockquote><blockquote>Pfizer agreed to settle the class-action litigation pending in federal court in Newark, New Jersey, according to a filing today. U.S. District Judge Faith Hochberg must approve the accord, which would cover purchasers of Neurontin from December 2002 to August 2008. </blockquote><br />Note that this settlement, like many others, is of matter from a long time ago.  When it comes to bad behavior by big health care corporations, any form of justice is not swift. <br /><br />Note also that this is only the latest chapter in the long saga of Neurontin, for whose mis-marketing Pfizer has already shelled out a lot of money (see<a href="http://hcrenewal.blogspot.com/2006/08/stealth-marketing-of-neurontin.html"> this post</a> to start, and <a href="http://hcrenewal.blogspot.com/search/label/Neurontin">here</a> for the collection).  Pfizer has an amazing record of bad behavior on view <a href="http://hcrenewal.blogspot.com/search/label/Pfizer">here</a>.  In fact, it has had a conviction as a Racketeering Influenced Corrupt Organization (RICO) on the basis of its previous marketing of Neurontin (look <a href="http://hcrenewal.blogspot.com/2013/12/blogscan-us-supreme-court-turns-down.html">here</a>). <br /><br />This particular bad behavior involved included,<br /><br /><blockquote class="tr_bq"> improperly listing certain patents with the U.S. Food and Drug Administration, engaging in <i>illegal promotion</i> and sales of Neurontin for unapproved uses, filing and maintaining sham litigations with respect to certain patents, and making misrepresentations to the patent courts,</blockquote><br />Note that while much of this was legalistic, illegal marketing was in there too.<br /><br />Once more, I found nothing about any negative consequences for individuals who authorized, directed, or implemented questionable actions.<br /><br /><b>Summary</b><br /><br />So it is all drearily familiar.  Big health care organizations seem to repeatedly engage in deceptive marketing, providing kickbacks to health professionals, fraudulent billing, anti-competitive practices, etc, etc.  These practices increase health care costs, and may risk patients' health and safety.  Many of these practices are corrupt, at least according to the Transparency International definition of corruption, "abuse of entrusted power for private gain."  Drug and device companies, for example, are entrusted to provide safe and effective products.  Deceptive marketing, kickbacks to health professionals to encourage overuse, and cutting quality control to cut costs all seem to be examples of abuse of this entrusted power.  The private gain obviously goes to any managers and executives who score bigger bonuses due to the increases in revenue that result.  <br /><br />Yet there are very few examples of any individuals who gained ever being subject to any negative consequences.  Given that lack, and the lack of any requirement for corporate leaders to admit responsibility, much less guilt, is it any surprise that these practices go on and on.  The failure of current limp legal efforts against such corruption is evident by how many corporations have become ethical repeat offenders.   (Note that in fact, as noted above, one of the pharmaceutical companies above actually was convicted of being a RICO, racketeering influenced corrupt organization, yet that conviction seemed to have no real negative consequences for the organization or any of the people involved.) <br /><br />As I have said again and again, pervasive bad behavior by large health care organizations has got to be a major cause of our ongoing health care dysfunction.<br /><br />So, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue. <br />

The Pervasiveness of Health Care Corruption as Shown by Another Roundup of Legal Settlements

Legal settlements are one way to document unethical and even corrupt behavior by large health care organizations, even if they may not deter...

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The Implications of the CareFusion/ Dr Denham/ NQF/ Leapfrog Group Case Continue to Grow, but Remain Anechoic

The story about CareFusion, Dr Charles Denham, and the National Quality Forum certainly has legs, but continues to tread very softly. <br /><br /><b>Background</b><br /><br />At the time of our <a href="http://hcrenewal.blogspot.com/2014/01/the-carefusion-denham-nqf-case-plot.html">last post</a>, on January 28, 2014, the basics were:<br />-  The case became public with an apparently routine legal settlement between CareFusion and the US Department of Justice<br /> -  The CareFusion settlement for $40.1 million was made in response to allegations that kickbacks were made to promote <a href="http://www.carefusion.com/medical-products/carefusion-brands/chloraprep/">ChloraPrep</a>, a solution meant for preoperative and other health care skin cleaning<br />-  The Department of Justice <a href="http://www.justice.gov/opa/pr/2014/January/14-civ-021.html">news release</a> also alleged that payments were made to a corporation called Health Care Concepts to conceal kickbacks made to its owner, Dr Charles Denham<br />-  The implication was that Dr Denham was supposed to influence a standard writing committee run by the National Quality Forum, a well known organization that promotes quality improvement, issues authoritative practice standards, a form of clinical practice guidelines, and has contracts with the US government for quality of care activities<br />-  The draft of the standard to prevent surgical site infection written by the committee allegedly included the use of ChloraPrep, although mention of that specific medication was removed in a revision<br />-  The Department of Justice alleged that the standard was based on a journal article sponsored by Cardinal Health, from which CareFusion split, and which may have been manipulated by its sponsor<br />-  NQF leaders asserted that after hearing of the case from the DOJ, the organization severed ties with Dr Denham and the non-profit organization he runs,  established a policy not to accept money from funding organizations whose leaders are on its committees, reviewed all the standards set by the committee of which Dr Denham was co-chair, and twice revised its conflict of interest policy.<br />- Despite these efforts by the NQF to remove excess influence by Dr Denham, a specific recommendation to use ChloraPrep, specified by formula but not by name, did appear in another NQF standard, one for preventing central line infections; the NQF logo apparently appeared on at least one educational event run by Dr Denham that advocated the use of ChloraPrep; and CareFusion cited NQF support in at least one promotional brochure<br /><br /><b>Dr Denham's Previous Associates Now Have Doubts</b><br /><br />According to an <a href="http://www.healthleadersmedia.com/print/QUA-300562/Patient-Safety-Orgs-Cut-Ties-With-Denham">article</a> in Health Leaders Media, Dr Denham was associated not only with the NQF, but also another well known organization that promotes patient safety, the Leapfrog Group.  Since the CareFusion settlement was made public, this association has come to an end:<br /><br /><br /><blockquote class="tr_bq"><i>Denham was appointed to Leapfrog's Safe Practices Committee as Chairman in 2006</i>. 'The position represented a voluntary commitment with no financial or contractual relationship between Dr. Denham and Leapfrog,' says a Leapfrog statement.<br /><br /> On Wednesday, Denham resigned his position from the committee 'to make sure the present distraction does not impact you or the work you do.' The group accepted his resignation on Thursday.<br /><br /> Leapfrog's president and CEO, Leah Binder, said in an interview with HealthLeaders Media: 'We've never taken any money from him and we have no contracts with him.'<br /><br /> Leapfrog has asked Denham and his company, TMIT, to '<i>remove any language from its website implying Leapfrog endorsement of 'test beds,' as this is not authorized. Further have TMIT remove any reference to a Leapfrog Hospital Survey 'flight simulator,' as this authorization was only given in 2006 and expired in 2007.'</i><br /><br />On Thursday, Binder issued a statement saying her board 'was concerned with <i>Dr. Denham's failure to reveal to the National Quality Forum or Leapfrog his potentially compromising relationship with CareFusion, which demonstrated a lack of transparency</i> inconsistent with our organization's core values and mission.'<br /></blockquote>Note that the Leapfrog group charged that Dr Denham failed to disclose his financial relationships with CareFusion to them.  The article also implied that Dr Denham was falsely claiming that the Leapfrog Group had endorsed various activities by his Texas Medical Institute of Technology.  So it appears that Dr Denham's efforts to conceal his conflict of interest - and that is likely an understatement of his relationship with CareFusion -  and to make it appear that prestigious patient safety organizations supported CareFusion products were more widespread than we initially realized.  <br /><br />Furthermore, a <a href="http://community.the-hospitalist.org/2014/01/30/patient-safetys-first-scandal-the-sad-case-of-chuck-denham-carefusion-and-the-nqf/">post</a> by Dr Robert Wachter on his blog Wachter's World noted  <br /><br /><blockquote class="tr_bq">In retrospect – always in retrospect – it should have been obvious that, when it came to Dr. Charles Denham, something was not quite right.</blockquote><br />He admitted that many aspects of the National Quality Forum's and his relationship with Dr Denham were in retrospect questionable.  These included the obscurity of the sources of the lavish resources that Dr Denham's organizations commanded and the wealth that Dr Denham displayed.<br /><br /><blockquote class="tr_bq"> A colleague visited him at his home in Laguna Niguel, an affluent beachfront LA suburb, and reported that it was <i>palatial – not something commonly acquired on the salary of a <a href="http://en.wikipedia.org/wiki/Charles_Denham" target="_blank">former radiation oncologist</a>. </i>About five years ago, trying not to be too obvious, I asked Chuck where his money came from. He mentioned something about his wife’s family, and that he had decided to leave clinical practice to commit his life to patient safety. On several occasions, he talked about his '<a href="http://www.safetyleaders.org/pages/idPage.jsp?ID=2034" target="_blank">research test bed</a>,' saying, '<i>We’re in more than half the hospitals in America.</i>' It wasn’t entirely clear what this meant; <i>having visited many hospitals over the years, I never heard of one that was using the services of TMIT</i>, the way you hear about hospitals that work with Premier or the Advisory Board or the Governance Institute. <i>Very little of this added up</i>,...</blockquote><br />Another concern in retrospect was how Dr Denham became editor of a journal on patient safety: <br /><br /><blockquote class="tr_bq">The <a href="http://journals.lww.com/journalpatientsafety/pages/default.aspx" target="_blank"><i>Journal of Patient Safety</i></a> launched early in the safety field, co-sponsored by the National Patient Safety Foundation. To me, JPS has never been very good or particularly influential, and by all accounts it struggled to make ends meet. Then in 2011, I learned that <i>it had <a href="http://www.newswise.com/articles/dr-charles-denham-named-editor-of-journal-of-patient-safety" target="_blank">named a new editor</a>. You guessed it: Denham. The change had been made so precipitously that the NPSF, a founding sponsor, claimed it had been blindsided and removed its sponsorship in protest.</i> I looked back to see whether Denham’s pedigree could justify his being named the editor of an academic journal. A PubMed search revealed that, <i>before 2009, he had not had a single first-author publication in a 20-year career. Since then he has had 12, 11 of them in JPS.</i></blockquote><br />Finally, Dr Wachter recounted that many of his professional colleagues ended up involved with Dr Denham, often with doubts, but doubts upon which they did not act,<br /><br /><blockquote class="tr_bq">Over the past few years, I received <i>at least five different calls from colleagues</i> who had been approached by Chuck to work on one project or another – a video to improve radiology safety, an effort to reduce central line infections, and several others I can’t recall. In each case, the question posed by my colleagues was a version of, <i>'Is this guy for real?'</i>  In each case I said the same thing: Yes, both he and the situation seem odd, and no, I don’t know where he gets his money. Yet he appeared to be a nice guy, good to his word, and he produced results. I told them that – despite my head scratching – I couldn’t think of a sound reason <i>not</i> to work with him. When I mentioned this yesterday to <a href="http://en.wikipedia.org/wiki/Peter_Pronovost" target="_blank">Peter Pronovost</a>, the Johns Hopkins intensivist who is the world’s leading safety researcher, he told me, 'It’s not that five people didn’t understand Chuck… I don’t know anyone who <i>did</i> understand.'</blockquote><br /><br />Again, it appears that Dr Denham's deceptions may have been considerably larger than indicated by the initial reports. <br /><br /><b>Senator Grassley Now Has Questions</b><br /><br />The redoubtable Senator (R - Iowa), who is known to be particularly vigilant about conflicts of interest in health care, has now officially stepped in.  According to an <a href="http://www.propublica.org/article/senator-cites-serious-concerns-demands-national-quality-forum-records">article</a> in ProPublica,  <br /><br /><div class="article"> <blockquote class="tr_bq">An influential senator is demanding copies of contracts and conflict-of-interest policies from the National Quality Forum after allegations that kickbacks were paid to influence its patient safety guidelines.<br /><br /> Sen. Charles Grassley cited 'serious concerns' about how the Quality Forum vets its expert advisers and suggested the group may have endorsed a drug for a use the government hasn’t approved. </blockquote><br />The NQF is in this hot seat because it gets extensive US government support,<br /><br /><blockquote class="tr_bq">In 2012, three-fourths of the Quality Forum’s $26 million in income came from the government to endorse health care quality measures and evaluate spending. It’s expected to receive about <a href="http://www.propublica.org/documents/item/1010669-gao-2012-nqf-report#document/p9/a142562">$10 million</a> from the federal government this year under provisions of the Affordable Care Act. </blockquote><br />The group promised a swift reply,<br /><br /><br /><blockquote class="tr_bq">Spokeswoman Ann Greiner said the Quality Forum will promptly reply to Grassley. The group already had announced a new, 30-day review of its guidelines and policies after ProPublica raised questions about ChloraPrep last month. <br /> <br />'As you know, we fully cooperated with the DOJ inquiry, and have our own review of NQF processes (including conflict of interest policies) related to the 2010 Safe Practices report under way,' Greiner said in an email, referring to the group’s latest patient safety guidelines.</blockquote><br /><b>More Questions about How Dr Denham May Have Tried to Influence the NQF to Promote ChloraPrep</b><br /><br />The latest <a href="http://www.modernhealthcare.com/article/20140204/NEWS/302049952/journal-investigates-allegations-of-tainted-research-as-denham">article</a> by Joe Carlson for Modern Healthcare raised a question about how Dr Denham knew the results of the New England Journal of Medicine article at the time he alluded to its findings at an NQF meeting,<br /><br /><blockquote class="tr_bq"><i>The NQF committee's discussion of the study took place in </i><a href="http://www.modernhealthcare.com/assets/pdf/CH9291524.PDF"><i>August 2009</i> (PDF)</a>, and the results of the clinical trial comparing alcohol-chlorhexidine versus traditional iodine-based surgical antiseptics <i>didn't appear in print in the New England journal until <a href="http://www.nejm.org/doi/pdf/10.1056/NEJMoa0810988">January 2010</a>.</i> Journals typically prohibit release of data in peer-reviewed studies before publication.</blockquote><br />The article also underscored a question raised by Senator Grassley<br /><br /><blockquote class="tr_bq">Grassley contends that <i>CareFusion didn't even have <a href="http://www.modernhealthcare.com/section/articles?tagID=1136">Food and Drug Administration</a> approval for that specific indication of ChloraPrep at the time the NQF was talking about it.</i><br /><br />'It is concerning that a prominent expert at NQF was encouraging non-approved uses during a review of patient safety best practices while being paid millions of dollars by the manufacturer of ChloraPrep,' <a href="http://www.modernhealthcare.com/assets/pdf/CH9291624.PDF">Grassley wrote in a letter Monday (PDF)</a> to <a href="http://www.modernhealthcare.com/section/articles?tagID=856">NQF President and CEO Dr. Christine Cassel</a>.</blockquote><br />The list of questions about possibly deceptive practices by Dr Denham that could have promoted his pay-master CareFusion's products continues to grow, as does the scope of the apparent influence of his actions.  While this case includes many elements familiar to Health Care Renewal readers, such <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">individual</a> and <a href="http://hcrenewal.blogspot.com/search/label/institutional%20conflicts%20of%20interest">institutional conflicts of interest</a>, <a href="http://hcrenewal.blogspot.com/search/label/kickbacks">kickbacks</a> and other aspects of <a href="http://hcrenewal.blogspot.com/search/label/health%20care%20corruption">health care corruption</a>, <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">manipulation of clinical studies</a>, questionable <a href="http://hcrenewal.blogspot.com/search/label/guidelines">clinical practice guidelines</a>, and <a href="http://hcrenewal.blogspot.com/search/label/deception">deceptive</a> marketing practices, the scope of the case is becoming extraordinary.  It now involves at least two respected non-profit organizations that promote health care safety and quality, two medical journals, many respected medical academics, and an undetermined number of hospitals.  <br /><br /><b>Summary - Where are the Echoes?</b><br /><br /><br />It is heartening that leaders of the NQF have responded to this case openly, and without some of the defensiveness we have often seen when questions are raised about the actions of important health care organizations.  It is also heartening that at least one US Senator has taken an interest.  Yet despite its  scope and the potential importance of these reactions to it, this case has remained relatively anechoic.<br /><br />We have often, but not so much lately, discussed the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>.  Cases, issues and ideas that might raise questions about the powers that be in health care, or might offend or threaten those who profit the most from the our dysfunctional health care system often have few echoes in the mainstream media and the medical, health care and health policy literature. <br /><br />While the CareFusion/ Dr Denham/ National Quality Forum/ Leapfrog Group case seems like it ought to be very important, and many writers have now addressed it, so far it has only been covered by relatively obscure outlets.  Although initial brief coverage of the CareFusion settlement appeared in business news services like Reuters, all coverage since has been in Modern Healthcare, ProPublica, Health Leaders Media, and several blogs, including Health Care Renewal. Presumably this is the reason another blogger, in the <a href="http://commonhealth.wbur.org/2014/02/patient-safety-scandal">WBUR CommonHealth blog</a>, wrote ironically,<br /><br /><br /><blockquote class="tr_bq">Paging Dr. Atul Gawande, paging Dr. Atul Gawande. Please call your assigning editor at The New Yorker to discuss the scandal around the $11 million that the company CareFusion allegedly paid to a leading figure in the patient safety field who pushed the company’s surgical antiseptic.<br /><br /> I confess, that’s just my fantasy, that Dr. Gawande — prominent himself in patient safety as author of '<a href="http://atulgawande.com/book/the-checklist-manifesto/">The Checklist Manifesto'</a> — might want to take on this assignment. </blockquote></div><div class="article"> </div><div class="article">So it appears the anechoic effect is still with us. When leaders of big health care organizations enjoy ever increasing pay and influence, and the organizations they lead become ever more dominant, the risk of causing them offense continues to grow.  So it is all to easy to choose to ignore what might trouble the new health care plutocracy. But if no one notices the emperor has no clothes, he will continue to march around naked. </div><div class="article"><br /></div><div class="article">by Roy M Poses MD for Health Care Renewal </div>

The Implications of the CareFusion/ Dr Denham/ NQF/ Leapfrog Group Case Continue to Grow, but Remain Anechoic

The story about CareFusion, Dr Charles Denham, and the National Quality Forum certainly has legs, but continues to tread very softly.  Backg...

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Our Man in the NQF? - CareFusion Settles Kickback Allegations for $40.1 Million and Government Alleges They Meant to Manipulate National Quality Forum Standards

What appeared to be yet another entry in the <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">march of legal settlements</a> turns out to be more interesting than it first appeared.<br /><br /><b>The Basic Story: Off-Label Marketing  </b><br /><br />The story was initially briefly reported in the media.  A <a href="http://blog.seattlepi.com/boomerconsumer/2014/01/09/company-to-pay-40-1-million-to-settle-medicaid-fraud-kickback-charges/">report</a> in the Seattle Post-Intelligencer on 9 January, 2014, was perhaps the most complete, <br /><br /><blockquote class="tr_bq">CareFusion, a manufacturer of medical and surgical supplies and medical devices, has agreed to <i>settle charges of illegal marketing practices and kickback payments for promoting sales of the company’s surgical preparation solution, Chloraprep.</i><br /><br />Under the terms of the settlement with Washington, other states, and the federal government, CareFusion will <i>pay a total of $40.1 million.</i></blockquote><br />In particular,<br />  <br /><blockquote class="tr_bq">When the FDA approves a surgical solution such as Chloraprep as safe and effective, its manufacturer can’t market or promote it for an 'off-label' use – any use not approved by the FDA.<br /><br />Chloraprep was approved for specific inpatient hospital procedures, including the preparation of a patient’s skin prior to surgery or an injection. The FDA rejected its use for prepping the skin prior to inserting catheters into veins for administering medications, or cleaning the skin as part of closing wounds.<br /><br />The lawsuit alleges that from Sept. 1, 2009 to Aug. 31, 2011, <i>CareFusion promoted Chloraprep for improper uses. CareFusion also allegedly publicized unverified information</i> about Chloraprep during the same time period, Ferguson said.</blockquote><br /><br />So this follows a template we have seen before, most recently <a href="http://hcrenewal.blogspot.com/2014/01/more-pharmaceutical-misadventures.html">here</a>.  A company promotes a drug or device for "off-label" uses.  While physicians are legally allowed to prescribe a drug or use a device for reasons other than its official indications, companies are not legally allowed to promote such uses.  Sometimes it turns out that the drug has benefits that outweigh its harms when used off-label, in which case the violation could be considered technical.  In other cases, the drug might turn out to be useless or even net harmful when used off-label, so the violation indicates putting revenue ahead of patients' welfare.   <br /><br />The reporting on the CareFusion Chloraprep settlement did not clearly suggest that the off-label use was harmful to patients.<br /><br /><b>Allegations of Kickbacks to Promote Off-Label Use, but How?</b><br /><br />It gets more interesting.  The Post-Intelligencer also noted,<br /><br /><blockquote class="tr_bq">The states also contend that in 2008 CareFusion’s predecessor corporation entered into agreements that CareFusion assumed legal and financial responsibility for. This included <i>payments to Health Care Concepts Inc., payments that were allegedly made to hide kickbacks to the physician-owner of HCC for promoting and influencing providers to use Chloraprep</i>, he said. This violates federal and state anti-kickback laws.</blockquote><br />Now the allegations also include kickbacks to the "physician-owner" of a company to facilitate off-label promotion.  So the issue goes beyond a technical violation of the law.  The Post-Intelligence report, however, did not make clear what Health Care Concepts Inc actually did to contribute to off-label promotion. <br /><br />A quick attempt to find out more about this company via the web was not fruitful.  There are lots of companies/ organizations called Health Care Concepts or some variant.  The most relevant may be<a href="http://www.hcc1.com/"> this one</a>, which lists CareFusion as a "partner" on its main web-page.  What this company actually does is a bit unclear.  Its business model is <a href="http://www.hcc1.com/node/3">described</a> as "a private incubator of early products, services, and technologies, as well as an accelerator of mature solutions that will be taken to scale." What that has to do with off-label promotion of a product of a big established company like CareFusion is not clear.  How this company could have influenced providers is not clear, given that it is not an advertising firm, public relations firm, or medical education and communication company (MECC). <br /><br />So what is going on here?   <br /><br /><b>Allegations of a $11.6 Million Payment to Manipulate the National Quality Forum Standards </b><br /><br /><br />Yesterday, 21 January, 2014, Modern Healthcare began to <a href="http://www.modernhealthcare.com/article/20140120/NEWS/301209952/nqf-committee-member-paid-11-6m-by-carefusion-to-influence-panels">explain</a> the mystery.    <br /><br /><blockquote class="tr_bq">Many healthcare companies have been accused of paying kickbacks to influence physicians' medical decisions, but one major supplier <i>allegedly tried to steer an entire industry by influencing the recommendations of the National Quality Forum</i><br /><br />The NQF, which reviews medical evidence and makes recommendations for improving healthcare, acknowledges that <i>a well-known patient safety advocate is alleged to have received millions of dollars to promote a surgical sterilization product while co-chairing an NQF committee that suggested hospitals use that product. </i><br /><br />Federal officials say <i>Dr. Charles Denham, co-chair of NQF's Safe Practices Committee in 2010, received $11.6 million from San Diego-based CareFusion to promote the company's ChloraPrep line of skin-preparation products. Denham's committee at the NQF also recommended surgeons use ChloraPrep products to prevent surgical infections, the NQF said.</i> </blockquote><br />The allegations about the role of Dr Denham in the NQF also did appear in the the official US Department of Justice <a href="http://www.justice.gov/opa/pr/2014/January/14-civ-021.html">press release</a>.<br /><br /><b>Allegations of Bogus Contracts, and Non-Denial Denials</b><br /><br />The allegations produced some <a href="http://en.wikipedia.org/wiki/Non-denial_denial">non-denial denials</a> (in the phrase found in All the President's Men). <br /><br />Dr Denham responded, but through a lawyer:<br /><br /><blockquote class="tr_bq">A statement from Denham's attorney, Larry Gondelman of Powers Pyles Sutter & Verville in Washington, said <i>reports that the underlying lawsuit involved Dr. Denham were 'blatantly false.' </i><br /><br />Denham was<i> not accused of wrong-doing in the whistleblower lawsuit</i>, and Gondelman said Denham has and continues to cooperate with investigators in the case.</blockquote><br />Note that while the attorney denied that Dr Denham was named in the underlying lawsuit, he did not apparently specifically deny the allegations.<br /><br />The NQF also reponded,<br /><br /><blockquote class="tr_bq"> An NQF review committee <i>removed the reference to the specific product</i> before final publication of '<a href="http://www.qualityforum.org/Publications/2010/04/Safe_Practices_for_Better_Healthcare_%E2%80%93_2010_Update.aspx">Safe Practices for Better Healthcare</a>' in 2010.<br /><br />'An NQF ad hoc review did not find sufficient evidence to support one skin preparation over another,' <a href="http://www.qualityforum.org/News_And_Resources/Press_Releases/2014/NQF_Statement_on_Department_of_Justice_Settlement.aspx">a statement from the organization said</a>. 'The ad hoc review effectively served its role of rapidly responding when a potential issue is identified.'</blockquote><br />Note that the <a href="http://www.qualityforum.org/News_And_Resources/Press_Releases/2014/NQF_Statement_on_Department_of_Justice_Settlement.aspx">NQF press release</a> did not deny that the CareFusion money was given to Dr Denham's organization, nor that the NQF report might have promoted the use of a class of products in which CareFusion's Chloraprep resides. <br /><br />A <a href="http://www.modernhealthcare.com/article/20140121/NEWS/301219952/nqf-panel-member-admits-he-got-11m-from-carefusion-but-calls">follow-up story</a> in Modern Healthcare noted that Dr Denham confirmed the payment of the money to his company, but not its purpose,<br /><br /><blockquote class="tr_bq"> Renowned quality expert Dr. Charles Denham <i>confirms that CareFusion paid his company more than $11 million</i>, but Denham says he was surprised to see the U.S. Justice Department describe the money as kickbacks intended to influence national quality-of-care guidelines published by the National Quality Forum.</blockquote><br />Dr Denham's lawyer confirmed the payment, but did not further explain it:<br /><br /><blockquote class="tr_bq">Denham's lawyer, Larry Gondelman of Powers Pyles Sutter & Verville in Washington, <i>acknowledged that CareFusion did pay Denham's company under two contracts. </i></blockquote><br />And,<br /><br /><blockquote class="tr_bq">Gondelman said the $11.6 million paid to Denham's company <i>covered 'an array of services' and that he could not elaborate.</i></blockquote><br />Again, note that Mr Gondelman did not specifically deny that the money served as a kickback.<br /><br />Meanwhile, the Department of Justice alleged something more elaborate, and nefarious,  <br /><br /><blockquote class="tr_bq">The Justice Department, though, says the contracts were written to <i>look as though CareFusion was buying consulting, software development and strategic marketing services, as well as the completion of three unnamed projects. </i>The value of the deals, the government alleges, <i>far exceeded the fair-market costs of those services,</i> and that one of the actual purposes of the deals was to conceal kickbacks to Denham while he served on the National Quality Forum.</blockquote><br /><b>Interval Summary </b><br /><br />So what is clear so far is that:<br />-  CareFusion agreed to a $40.1 million settlement of allegations that it provided kickbacks to promote off-label use of its product.<br />-  CareFusion paid $11.6 million to Health Care Concepts<br />-  Health Care Concepts is run (and possibly owned) by Dr Charles Denham, who chaired a National Quality Forum committee that recommended use of CareFusion's product ChloraPrep in a performance standard and the final version of the NQF standard recommended use of a group of products including ChloraPrep<br /><br />We have frequently discussed how health care corporations may promote goods, particularly drugs and devices and services through <a href="http://hcrenewal.blogspot.com/search/label/deception">deceptive</a> and unethical practices, including inducements ranging form creation of <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a> to outright <a href="http://hcrenewal.blogspot.com/search/label/bribery">bribes </a>and <a href="http://hcrenewal.blogspot.com/search/label/kickbacks">kickbacks</a>.   We have also discussed the influence of individual and <a href="http://hcrenewal.blogspot.com/search/label/institutional%20conflicts%20of%20interest">institutional conflicts of interest</a> on <a href="http://hcrenewal.blogspot.com/search/label/guidelines">clinical practice guidelines</a>.  This has become an important enough problem for the US Institute of Medicine to weigh in with <a href="http://www.iom.edu/Reports/2011/Clinical-Practice-Guidelines-We-Can-Trust.aspx">standards for trustworthy guidelines</a> that markedly limit such conflicts of interest.  <br /><br />This case seems notable because it may link the problems of <a href="http://hcrenewal.blogspot.com/search/label/deception">deceptive</a> and unethical promotion with the influencing of clinical practice guidelines.  It is particularly notable because the organization generating the guidelines in question, the National Quality Forum, has become large, influential, and authoritative.  Re the latter point, the latest Modern Healthcare article affirmed,<br /><br /><blockquote class="tr_bq">The NQF is a <i>standards-setting organization for the healthcare provider industry</i>. It holds the <i>exclusive contract to provide Medicare and Medicaid with recommendations on a national quality-of-care strategy and the measures used to gauge improvements.</i></blockquote><br />In fact, while the NQF performance standards can function as guidelines, they also may be bases for <a href="http://hcrenewal.blogspot.com/search/label/pay%20for%20performance">pay for performance</a> schemes that attach real incentives to guidelines, which could become <a href="http://hcrenewal.blogspot.com/search/label/perverse%20incentives">perverse</a> if the guidelines have been manipulated.<br /><br /><b>Can the NQF Defend Against Conflicts, and If Not, Should it Remain So Authoritative? </b><br /><br />So the big question is whether the NQF, given its unique influence, has any meaningful approach to prevent its standards from being influenced by conflicts of interest?<br /><br />The NQF does have a <a href="http://www.qualityforum.org/docs/CDP_Conflict_of_Interest_Policy.aspx">recent conflicts of interest policy</a>. However, according to my reading, it neither bans committee members with conflicts of interest, nor even requires public disclosure of conflicts of interest.  All it seems to require is that committee members disclose conflicts internally and <strike>voluntarily</strike> recuse themselves from deliberations which may be affected by them.  Although the policy states that conflicts of interest <i>may</i> be made public, I could find nothing in the <a href="http://www.qualityforum.org/Publications/2010/04/Safe_Practices_for_Better_Healthcare_%E2%80%93_2010_Update.aspx">report</a> which Dr Denham co-authored about conflicts of interest or competing interests affecting any of the authors, including Dr Denham <br /><br />Furthermore, a very quick look at information publicly available on the NQF web-site suggests the organization itself may have major institutional conflicts of interest.  The NQF is one of those "public-private partnerships" that have become all the rage.  Several members of its <a href="http://www.qualityforum.org/About_NQF/Board/Board_of_Directors_Roster.aspx">board of directors</a> have leadership positions in large health corporations, financial firms with large health care interests, or trade associations for large health care corporations:  <br /><br /><a href="http://www.qualityforum.org/About_NQF/Board/Elizabeth_Fowler.aspx">- Elizabeth J. Fowler</a>, PhD, JD, is Vice President, Global Health Policy, in the Government Affairs & Policy group at Johnson & Johnson.<br /><br />- <a href="http://www.qualityforum.org/About_NQF/Board/Robert_Galvin.aspx">Robert Galvin</a>,<b></b> MD, is Chief Executive Officer, Equity Healthcare, at The Blackstone Group. <br /><br /> - <a href="http://www.qualityforum.org/About_NQF/Board/Karen_Ignagni.aspx">Karen Ignagni</a>, President and Chief Executive Officer of America’s Health Insurance Plans (AHIP), is the voice of health insurance plans....<br /><br />- <a href="http://usa.healthcare.siemens.com/infrastructure-it/healthcare-it/about-health-services/leadership-profile-healthcare-it">J Mark Overhage</a> MD, PhD,  Chief Medical Informatics Officer, Health Services, Siemens Healthcare<br /><br /><br />Thus it is conceivable that they could personally profit, and that their organizations could institutionally profit from standards that favor their organizations' interests.   <br /><br />Furthermore, NQF receives <a href="http://www.qualityforum.org/About_NQF/Funding.aspx">funding</a> from the US government and private foundations, but also from pharmaceutical companies and their in-house foundations:<br /><br /><blockquote class="tr_bq">the Bristol-Myers Squibb Foundation, the Cardinal Health Foundation, Pfizer Inc., Sanofi-aventis,...</blockquote><br />Unless the current case leads to big changes in the prevalence of conflicts of interest among the NQF board, the continuation of its institutional conflicts of interest generated by its sources of funding, and its weak policy on conflicts affecting committee members, the question becomes whether it should continue to have such an authoritative role?<br /><br />As we have said over and over, pervasive conflicts of interest affect health care decision-makers and policy makers and the organizations within which they function.  Such conflicts threaten to put various private interests way ahead of patients' and the public's health.  If we really want health care that will put patients' and the public's health first, we need to end such arrangements that favor private gain.   <br /><br /> Roy M. Poses MD on Health Care Renewal<br /><br />ADDENDUM (23 January, 2014) - A closer re-reading of the NQF conflict of interest policy made it clear that recusal is not voluntary, and that conflicts of interest may be revealed publicly, but that such disclosure is not mandatory.  The paragraph above dealing with these issues was revised accordingly.   <br /><br />

Our Man in the NQF? - CareFusion Settles Kickback Allegations for $40.1 Million and Government Alleges They Meant to Manipulate National Quality Forum Standards

What appeared to be yet another entry in the march of legal settlements turns out to be more interesting than it first appeared. The Basic ...

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A New, and Huge ($2.2 Billion) Settlement for Johnson and Johnson, but "No Individuals were Charged with Wrongdoing"

The march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements </a>made by big health care organizations has resumed with a bang.  As reported in most major media outlets, giant drug/ device/ biotechnology company Johnson and Johnson has made a big settlement with the US Department of Justice.<br /><br /><b>The Basics of the Settlement</b><br /><br />As <a href="http://www.businessweek.com/news/2013-11-04/j-and-j-settlement-over-risperdal-said-to-be-announced-later-today">reported</a> by Bloomberg / Businessweek, <br /><br /><blockquote class="tr_bq"><div class=""><i>Johnson & Johnson agreed to resolve criminal and civil probes into the marketing of Risperdal, an antipsychotic drug, and other medicines by paying more than <b>$2.2 billion</b></i>, one of the largest U.S. health-fraud penalties. </div><div class=""><br /></div><i>J&J’s Janssen unit will plead guilty to a misdemeanor criminal charge over misbranding Risperdal for uses not approved by the Food and Drug Administration, including treating elderly patients with dementia.</i> Under a plea agreement announced today, Janssen will pay a $334 million fine and forfeit $66 million.<br /><br />Janssen also settled civil claims that it marketed Risperdal without approval for the elderly, children and the mentally disabled, and that it paid kickbacks to physicians and to Omnicare Inc., the largest pharmacy for nursing homes. The civil accord covered off-label marketing of Risperdal; Invega, another antipsychotic; and Natrecor, a heart drug.</blockquote><br />This settlement covered conduct that health care professionals ought to find particularly disturbing, including marketing Risperdal for elderly people with dementia without an approved indication, despite evidence that it could be particularly harmful to those patients; marketing Risperdal to adolescent boys without an indication, again despite evidence that it could be particularly harmful to those patients; and using kickbacks to market Risperdal. <br /><br /><b>Promoting Risperdal for Dementia Despite Increased Risk of Death</b><br /><br />This issue was best <a href="http://online.wsj.com/news/articles/SB10001424052702303936904579177630737380104">summarized</a> by the Wall Street Journal,<br /><br /><br /><blockquote class="tr_bq">Prosecutors alleged that J&J's Janssen Pharmaceuticals unit <i>promoted Risperdal to elderly patients suffering from dementia, despite no approval for that use. </i>Prosecutors also alleged that J&J's 'ElderCare' sales force <i>pushed Risperdal for use in these elderly patients, and sales representatives' bonus awards failed to distinguish prescriptions for schizophrenia or the unapproved dementia use</i>. <br /><br />In 2005, the FDA required the label warn that elderly patients suffering from dementia-related psychosis were at <i>a higher risk of death.</i></blockquote><br />The New York Times <a href="http://www.nytimes.com/2013/11/05/business/johnson-johnson-to-settle-risperdal-improper-marketing-case.html">added</a>,<br /><br /><blockquote class="tr_bq"><div itemprop="articleBody"> Johnson & Johnson officials <i>tried to expand the market for Risperdal to older dementia patients</i> soon after the drug was approved in 1993 to treat symptoms of psychiatric disorders, <a href="http://www.justice.gov/opa/documents/jj/janssen-info.pdf" title="The Justice Department filing (PDF). ">according to federal court filings</a>. </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">The drug, whose generic name is risperidone, was primarily tested in schizophrenia patients, and the <i>Federal Drug Administration repeatedly rejected efforts by the company to expand the drug’s use to older dementia patients, </i>according to the filings. </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">But Johnson & Johnson, federal officials said, actively pursued the market for geriatric patients. <i>The company created a dedicated sales force, ElderCare, to promote the drug and others to doctors who primarily treated older patients. </i></div><div itemprop="articleBody"><br /></div><div itemprop="articleBody"><i>The drug, the company claimed, could address symptoms that made treating these patients a challenge, especially in a nursing home setting</i>, including agitation, confusion, hostility and impulsiveness. The company’s sales brochures highlighted these symptoms and <i>minimized the fact that the drug was approved to treat schizophrenia, </i>according to federal documents.</div><div itemprop="articleBody"><br /></div><div itemprop="articleBody"> Federal officials said <i>the company knew that Risperdal posed serious health risks for older adults, like an increased risk of strokes, but it played them down.</i> The drug’s label was later updated to warn against the use of the drug in older patients with dementia.</div></blockquote><div itemprop="articleBody"><br /></div><div itemprop="articleBody">So the allegations were that the company pursued an elaborate and deceptive strategy to promote the drug for elderly dementia patients despite knowledge that the drug was particularly risky for such patients. </div><br /><b>Promoting Risperdal for Adolescent Boys Despite Increased Risk of Gynecomastia</b><br /><br />Again, per the WSJ,<br /><br /><blockquote class="tr_bq">Prosecutors also alleged that J&J <i>promoted Risperdal for use by boys suffering from mental disabilities despite knowing that use could raise levels of a hormone stimulating breast development.</i></blockquote><br />The NYT added,<br /><br /><br /><blockquote class="tr_bq"><div itemprop="articleBody">Federal prosecutors also say, as part of the civil settlement, that <i>Johnson & Johnson promoted the use of Risperdal in people with mental disabilities and children, even though the company did not receive F.D.A. approval to market to children until 2006.</i> Janssen told its sales representatives to visit child psychologists and mental health facilities that mainly focused on children, promoting the drug as a safe treatment for disorders like attention deficit hyperactivity disorder and obsessive-compulsive disorder, the government said. </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody"><i>Johnson & Johnson knew that children were susceptible to certain health risks from taking Risperdal, including the possibility that boys could develop breasts</i> through elevated production of the hormone prolactin, federal officials said. </div></blockquote><div itemprop="articleBody"><br /></div><div itemprop="articleBody">Again, the allegations were that the company pursued an elaborate deceptive strategy to market the drug for children despite knowledge that the drug was particularly risky for such patients.  </div><div itemprop="articleBody"><br /></div><div itemprop="articleBody"><b>No Executives were Discomfited by the Disposition of This Case</b></div><div itemprop="articleBody"><br /></div><div itemprop="articleBody">The company took pains to emphasize that the settlement only required a single guilty plea to a misdemeanor by a company subsidiary, and did not involve any other admissions of guilt, or any penalties to specific human beings.  For example, per Bloomberg/ Business Week,</div><div itemprop="articleBody"><br /></div><blockquote class="tr_bq">'Today we reached closure on complex legal matters spanning almost a decade,' Michael Ullmann, J&J’s general counsel, said in a statement. 'This resolution allows us to move forward and continue to focus on delivering innovative solutions that improve and enhance the health and well-being of patients around the world.'<br /><br />While Janssen 'accepts accountability' for the actions described in the misdemeanor plea, <i>the civil settlement 'is not an admission of any liability or wrongdoing, and the company expressly denies the government’s civil allegations,' J&J said.</i></blockquote><br />So why give up a perfectly good $2.2 billion (minus $400 million fine and forfeiture by the Janssen subsidiary for the single misdemeanor)?  Was "closure" all that valuable?<br /><br />In addition, in the NY Times we found ,<br /><br /><br /><blockquote class="tr_bq">Ernie Knewitz, a spokesman for Johnson & Johnson, noted that the misdemeanor charge was being entered on behalf of the company and <i>no individuals were charged with wrongdoing</i>. '<i>Mr. Gorsky [current CEO] has been an outstanding Johnson & Johnson leader for more than 20 years</i>,' he said. </blockquote>Would you expect someone who works for Mr Gorsky to say otherwise?  Yet it was on Mr Gorsky's watch that much of the alleged bad conduct actually happened.  <br /><br /><blockquote class="tr_bq">Alex Gorsky was promoted to chief executive officer of J&J in April 2012, in part <i>because of his record of generating sales as leader of Janssen Pharmaceuticals. </i></blockquote><br />Furthermore, the Inquirer noted that Mr Gorsky was deposed in one of the many civil lawsuits filed by patients against Johnson and Johnson. <br /><br /><blockquote class="tr_bq"><i>The 60-page transcript of Gorsky's deposition</i> in one of the Philadelphia suits was part of the publicly available court record. In the transcript, McCormick walks Gorsky through discussions from 2001 with Joseph Biederman, a Harvard medical school professor and a Massachusetts General Hospital pediatric psychiatrist who gained fame - and criticism - for advocating the use of pharmaceuticals to treat children with perceived mental illness. That was before the U.S. Food and Drug Administration approved, in still-limited ways, drugs such as Risperdal for children. <br /><br />In a one-page letter dated Dec. 7, 2001, Biederman requested $500,000 to start what became the Johnson & Johnson Center for the Study of Pediatric Psychopathology. Gorsky said in the deposition that he approved that payment. <br /><br /><i>Gorsky was asked whether he had been hoping Biederman and, by extension, Massachusetts General Hospital and Harvard, would help J&J to get wider diagnosis and treatment for child and adolescent mental disorders. </i><br /><i><br /></i><i>'I think our goal was to, yes, have better diagnostic criteria for children who are in need of treatment and to have better therapeutic options for children who are in need of treatment,' Gorsky said. </i><br /><br />Also in the transcript, McCormick discussed with Gorsky a document called the 'Annual Report 2002: The Johnson & Johnson Center for Pediatric Psychopathology at Massachusetts General Hospital.' Biederman was the director of the center, and <i>one of the goals of its research, according to the report, was that 'it will move forward the commercial goals of J&J.'</i></blockquote><br />Thus this testimony seems to imply that current Johnson and Johnson CEO Gorsky was involved in making large payments to an important key opinion leader (KOL) who was supposed to use his academic gravitas to "move forward the commercial goals" of Johnson and Johnson, specifically by promoting Risperdal for children.<br /><br />Yet, as we discussed above, neither Mr Gorsky nor any other person at Johnson and Johnson who might have authorized, directed, or implemented the alleged conduct which was the subject of the settlement, conduct which Johnson and Johnson of course denies was misconduct, suffered any negative consequences. <br /><br />Mr Gorsky's total compensation as CEO in 2012 was <b><i>$10,977,109</i></b> according too the <a href="http://www.investor.jnj.com/secfiling.cfm?filingID=1193125-13-104341">company's 2013 proxy statement</a>. The retiring CEO, William Weldon, on whose overall watch the alleged events occurred, received <b><i>$29,838,259</i></b> that year.  We last discussed their compensation and its contrast with the company's ethical track record <a href="http://hcrenewal.blogspot.com/2013/07/johnson-and-johnson-settles-suit.html">here</a>.<br /><br />These payments also occurred despite all the other settlements Johnson and Johnson has had to make because of allegations about its marketing of Risperdal.  As described by Bloomberg/ Businessweek,<br /><br /><blockquote class="tr_bq">The settlement won’t resolve suits brought by attorneys general in Arkansas, Louisiana and South Carolina, where the company has appealed or has said it will appeal judgments over Risperdal sales. <br /><br />Judges or juries in those states have ordered J&J to pay a total of about $1.8 billion in damages and fines over Risperdal marketing campaigns that were found to have misled doctors and patients about the drug’s health risks and effectiveness. <br /><br />In 2012, a judge in Arkansas ordered the drugmaker to pay $1.2 billion in fines over Risperdal marketing. That verdict came three months after J&J decided to end a trial in Texas over the drug’s sales with a $158 million settlement. The Arkansas judge also awarded the state $180 million in attorney fees, J&J said in an August regulatory filing. The company is appealing the judgment. <br /><br />In June 2011, a judge in South Carolina ordered J&J to pay $327 million in penalties for deceptively marketing the medicine. Ten months earlier, jurors in Louisiana ordered the drugmaker to pay almost $258 million to state officials over J&J’s Risperdal marketing campaign in the state. A Louisiana judge later ordered the drugmaker to pay an additional $73.3 million in attorney fees and costs. </blockquote><br />The payments further occurred despite a previous settlement involving another drug whose marketing was at issue in the current settlement, according to Bloomberg / Businessweek, <br /><br /><blockquote class="tr_bq">In October 2011, J&J’s Scios unit pleaded guilty to a misdemeanor violation over Natrecor and paid an $85 million criminal fine. </blockquote><br />Finally, the compensation was given despite other legal actions not having to do with Risperdal, Invega or Natrecor, as we most recently summarized,<br />- A guilty plea for misbranding Topamax in 2010 (look <a href="http://hcrenewal.blogspot.com/2010/05/sunday-settlement-and-guilty-plea.html">here</a>)<br />- Guilty pleas to bribery in Europe in 2011 by J+J's DePuy subsidiary (look <a href="http://hcrenewal.blogspot.com/2011/04/johnson-and-johnson-runs-afoul-of.html">here</a>)<br /> - Accusations that the company, which makes smoking cessation products, participated along with tobacco companies in efforts to lobby state legislators (see post <a href="http://hcrenewal.blogspot.com/2011/09/smart-alecs-strange-bedfellows.html">here</a>)<br /><br /><b>Summary</b><br /><br />The latest settlement in the parade is another marker of the sort of conduct that big health care organizations have exhibited to increase revenue, and to use that revenue as a rationale for making their top insiders very rich.  The particular conduct alleged here could have put patients at risk, partly by deceiving health care professionals.  Yet in their wisdom, top US law enforcement saw fit not to try to hold any individuals accountable for this conduct, and allowed the company to deny any misconduct other than a single misdemeanor by a subsidiary.  This occurred despite the company's history of multiple legal settlements and findings of guilt in various courtrooms.<br /><br />Yet none of these actions has resulted in any negative consequences for any individual within the company.  No one who authorized, directed, or implemented bad behavior will pay any penalty, even were the bad behavior to have lead to significant personal enrichment.<br /><br />As we have said ad infinitum, and <a href="http://hcrenewal.blogspot.com/2012/09/how-many-legal-settlements-does-it-take.html">on the occasion of a previous Johnson and Johnson settlement</a>, many of largest and once proud health care organizations now have recent records of repeated, egregious ethical lapses. Not only have their leaders have nearly all avoided penalties, but they have become extremely rich while their companies have so misbehaved. <br /><br />These leaders seem to have become like nobility, able to extract money from lesser folk, while remaining entirely unaccountable for bad results of their reigns. We can see from this case that health care organizations' leadership's nobility overlaps with the supposed "royalty" of the leaders of big financial firms, none of whom have gone to jail after the global financial collapse, great recession, and ongoing international financial disaster (look <a href="http://hcrenewal.blogspot.com/2012/08/duchess-of-wellpoint-abdicates-likely.html">here</a>). The current fashion of punishing behavior within health care organization with fines and agreements to behave better in the future appears to be more law enforcement theatre than serious deterrent.  As Massachusetts Governor Deval Patrick exhorted his fellow Democrats, I exhort state, federal (and international, for that  matter) law enforcement to "<a href="http://www.washingtonpost.com/blogs/election-2012/wp/2012/09/04/patrick-it-is-time-for-democrats-to-grow-a-backbone/">grow a backbone</a>" and go after the people who were responsible for and most profited from the ongoing ethical debacle in health care.<br /><br />As we have said before, true health care reform would make leaders of health care organization accountable for their organizations' bad behavior.<br /><br /><b>Addendum - Other Comments </b><br /><br />See also similar sentiments <a href="http://1boringoldman.com/index.php/2013/11/04/an-ending/">from 1BoringOldMan</a>,<br /><br /><blockquote class="tr_bq"> J&J closes out the escrow fund set aside for this settlement. Alex Gorsky goes to his West Point Anniversaries and Boy Scout Board meetings an ongoing success story [<a href="http://1boringoldman.com/index.php/2012/09/18/shoveling/" target="_blank">shoveling…</a>]. And what was this all about? </blockquote><div><blockquote><div align="right"><i>This is the way the world ends</i></div><div align="right"><i> This is the way the world ends</i></div><div align="right"><i> This is the way the world ends</i></div><div align="right"><i> Not with a bang but a whimper</i></div></blockquote></div><br />and in a <a href="http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=4012">press release from Public Citizen</a>,<br /><br /><blockquote class="tr_bq">Until more meaningful penalties and the prospect of jail time for company heads who are responsible for such activity become common, companies will continue defrauding the government and putting patients’ lives in danger.</blockquote>

A New, and Huge ($2.2 Billion) Settlement for Johnson and Johnson, but "No Individuals were Charged with Wrongdoing"

The march of legal settlements made by big health care organizations has resumed with a bang.  As reported in most major media outlets, gian...

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