Suits allege drug and health care companies involved in kickbacks

Plaintiffs allege groups worked together to get doctors to prescribe unnecessary medications

Three civil lawsuits unsealed Tuesday in a Texarkana federal court allege complex kickback schemes exist among major pharmaceutical and health care-related companies in violation of the Federal False Claims Act and multiple state laws.

The suits involve well-known drugs that treat conditions such as diabetes, cancer, multiple sclerosis, osteoporosis, hepatitis C and HIV. According to the three complaints, pharmaceutical companies, health care marketing companies and companies that help acquire provider payment approvals illegally worked together to induce doctors to prescribe certain medications and that those medications were often paid for by government-funded health programs.

Health Choice Advocates filed on behalf of the U.S. and multiple states, including Texas and Arkansas, against Gilead Sciences Inc., Healthstar Communications

Inc., Covance Inc., Aerotek Inc. and Randstad North America Inc. The suit alleges companies involved in selling Sovaldi and Harvoni, drugs used to treat hepatitis C, and in selling Truavda and Atripla, anti-viral drugs that treat HIV, used a “multi-tiered kickback scheme to enrich themselves at the expense of the government.”

“Tens of thousands of patients were prescribed the covered drugs not based on clinical efficacy or patient specific information, but rather as a result of the unlawful, substantial kickbacks Gilead offered,” the Health Choice complaint states.

Health Choice Alliance filed against Eli Lilly & Co., Healthstar Communications Inc., VMS Biomarketing, Covance Inc., and United Biosource Corp. That suit alleges the defendant companies involved in selling Humalog and Humulin, drugs used to treat diabetes, and Forteo, a drug used to treat osteoporosis, engaged in a kickback scheme to reap big profits at government expense.

Health Choice Group filed against Bayer Corp., Amgen Inc., Onyx Pharmaceuticals Inc., AmerisourceBergen Corp. and Lash Group. That suit alleges the defendant companies enriched themselves through a kickback scheme to sell Betaseron, a drug to treat multiple sclerosis, and Nexavar, a drug to treat cancer, with an eye on profits.

The suits allege that the drugs were not necessarily prescribed because they were the best choice for a particular patient, but because the defendant companies manipulated the system to increase their bottom lines.

Each of the three complaints was filed under seal in June and is in excess of 60 pages. The suits describe a practice of using “nurse educators” to promote the named drugs through “white coat marketing” that blurred the lines between independent medical advice and sales. Companies providing support services that made it easier to get certain drugs covered by government funded healthcare such as Medicare, Medicaid, Veteran’s Administration and TRICARE, which serves military personnel, are allegedly part of the kickback schemes as well.

The same group of lawyers is representing the plaintiffs in all three cases. Marshall, Texas, lawyer Sam Baxter and Houston lawyer Mark Lanier are listed as co-lead counsel. Neither could be reached for comment Tuesday.

The government filed notice Monday stating that the federal government doesn’t represent the long list of states named as plaintiffs but that the U.S. Attorneys Office has been in discussion with the states’ attorneys and they are declining to intervene as well.

While the government and individual states may not actively participate in the litigation, federal law allows the cases to go forward on the government’s and states’ behalves. Should the advocacy groups which filed the complaints or the defendants propose that the actions be “dismissed, settled or otherwise discontinued,” the court must get the government’s consent before ruling, the government’s notice states. The government’s notice states that it reserves the right to intervene at a later date and that it wants copies of all filings of the case sent to a designated member of the U.S. Attorneys Office.

The notice asked the court to unseal the three complaints and the government’s notice that it is declining to intervene be unsealed but that all other documents filed in the case remain under seal and unavailable for public review. U.S. District Judge Robert Schroeder III unsealed the complaints and the government’s notice Tuesday.

“The United States requests that all other papers on file in this action remain under seal because, in discussing the content and extent of the United States’ investigation, such papers are provided by law to the court alone for the sole purpose of evaluating whether the seal and time for making an election to intervene should be extended,” the notice states.

The cases are currently pending before Schroeder and U.S. Magistrate Judge Caroline Craven in the Texarkana Division of the Eastern District of Texas.