WASHINGTON _ The Department of Health and Human Services'Office of Inspector General (OIG) issued a "Special Fraud Alert" onWednesday condemning three types of illegal marketing practices usedby drug companies.The unlawful promotional schemes, modeled on real cases, involvepayments of cash or other valuables to physicians and pharmacists toincrease sales of drugs. The alert is "another step in our effort to protect(Medicare and Medicaid) beneficiaries from companies whichencourage health care providers to put their financial self-interest aheadof the best interest of their patients," said Inspector General June GibbsBrown.Lisa Foley, a senior counsel in OIG's General Counsel Office, toldBioWorld that the fraud alert document did not name specificcompanies because the practices are thought to be commonplace in thedrug industry. One of the three examples cited by OIG closelyresembles a scheme that Caremark International Inc., a Minneapolisphysician and a top Genentech Inc. executive have been accused ofparticipating in.Earlier this month, a federal grand jury in Minneapolis charged that thephysician, David Brown, was paid $1.1 million in kickbacks byCaremark and Genentech to prescribe Protropin, Genentech'srecombinant human growth hormone. The money was allegedlyfunneled to Brown via research grants and consulting agreements,although Brown allegedly produced no research papers.Brown, who reportedly had as many as 350 Protropin patients at onetime, administered care to some of them under the Medicaid program.Caremark (U.S. distributor of Protropin), Brown and Edmon Jennings,Genentech's vice president of sales and marketing have denied allcharges in the grand jury indictment. (Genentech itself was not namedin the indictment.)In the OIG fraud alert, one of the three illegal schemes was describedas follows: "A `research grant' program in which physicians weregiven substantial payments for de minimus record-keeping tasks. Thephysician administered the drug manufacturer's product to the patientand made brief notes, sometimes a single word, about the treatmentoutcome. Upon completion of a limited number of such `studies,' thephysician received payment from the manufacturer."The other two illegal marketing practices cited were:* A "product conversion" scheme in which a company paidpharmacists each time they persuaded physicians to prescribe its brand-name drug instead of the drug of a competitor. The physicians wereunaware of the pharmacist's financial interest.(The Wall Street Journal reported that this case is based on a currentcriminal investigation of Bayer AG unit Miles Inc. and its payments topharmacists who counseled patients about its heart drug, Adalat CC.An OIG spokeswoman said the agency cannot discuss ongoinginvestigations and Miles has denied wrongdoing.)Frequent Flier Miles For New Patients* A "frequent flier" campaign in which physicians were given airlinefrequent flier mileage each time they completed a questionnaire for anew patient placed on the drug company's product.(According to the OIG spokeswoman, this case is based on a programinvolving 20,000 physicians conducted by Wyeth-Ayerst LaboratoriesInc., a subsidiary of American Home Products Corp. Wyeth-Ayerstpaid $830,000 in a civil settlement last July.)"Physicians, suppliers and, increasingly, patients are being offeredvaluable, non-medical benefits in exchange for selecting specificprescription drug brands," the OIG fraud alert document warned. "Inan era of aggressive drug marketing, patients may now be usingprescription drug items, unaware that their physician or pharmacist isbeing compensated for promoting the selection of a specific product."OIG was established by Congress in 1976 to identify and eliminatefraud, abuse and waste in HHS programs. It conducts audits,investigations and inspections nationwide to fulfill that mandate.Currently, the OIG is actively investigating violations of the Medicareand Medicaid anti-kickback statute (42 U.S.C. Section 1320a-7b(b)).The anti-kickback statue penalizes anyone who knowingly andwillfully solicits, receives, offers or pays remuneration in cash or kindto induce or in return for:* referring an individual to a person for the furnishing, or arranging forthe furnishing, of any item or service payable under the Medicare orMedicaid program; or* purchasing, leasing or ordering, or arranging for or recommendingpurchasing, leasing or ordering, any good, facility, service or itempayable under the Medicare or Medicaid program."We have two basic concerns where Medicare and Medicaid money isinvolved in reimbursing prescription drugs," OIG's Foley toldBioWorld. "One, the potential of illegal marketing practices to increaseprogram costs unnecessarily or inappropriately and two, the potentialfor harm to beneficiaries who receive inappropriate drug treatment."Violators of the anti-kickback statue are subject to criminal penalties,with a maximum penalty of a $25,000 fine per violation, five years inprison or both. In addition, violators may be excluded fromparticipation in the Medicare and Medicaid programs.Sales Reps Should Know The LawsWith OIG's crackdown on anti-kickback law violators underway, athorough grasp of federal drug marketing laws is more crucial thanever for pharmaceutical sales representatives. At a Tuesday pressconference, the Pharmaceutical Research and Manufacturers ofAmerica (PhRMA) unveiled a 700-page reference manual andcompanion workbook covering "all Government and private sectorstandards" for the promotional and educational activities of drugcompanies.The manual and workbook were developed using grant money from 21pharmaceutical companies, including Genentech and Wyeth-Ayerst."This new program adds to the ongoing effort to assure balanced,accurate and factual communication, which is needed to achieve all ofthe therapeutic benefits of prescription medicine," said PhRMAexecutive vice president Robert Allnutt. The publications weredeveloped to "aid the pharmaceutical industry's entry-level marketingand communications professionals in understanding regulations andguidelines covering pharmaceutical promotion," according to PhRMA.[Companies or individuals who want to purchase the PhRMA materialscan call (800) 822-4633.] n082594

-- Lisa Piercey Washington Editor

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