Medicaid Fraud Trial of TAP Pharmaceuticals Sales Executives Begins

Jury selection began on Tuesday in Boston in the criminal trial of 11 former and current sales executives from Illinois-based TAP Pharmaceutical Products who face charges of conspiracy to pay kickbacks and commit Medicaid fraud, the Washington Post reports. The defendants, indicted in 2001 and 2002, also allegedly violated the Prescription Drug Marketing Act. The case focuses on practices that TAP used to market the prostate cancer medication Lupron in the 1990s. In October 2001, officials for TAP, a joint venture between Abbott Laboratories and Takeda Chemical Industries, reached an agreement with the U.S. attorney's office in Boston to pay $875 million to settle charges that the company inflated prices, paid kickbacks to physicians to prescribe Lupron and helped physicians charge the government for free samples of the medication. A spokesperson for the Boston U.S. attorney's office did not comment on the current trial, which could last as long as six months. According to attorneys for the defendants, their clients were "being blamed for shortcomings in the law," the Post reports. A statement from TAP released last month did not comment on the case but said that "over the last several years, TAP has continued to strengthen its ethics and compliance program." According to the Post, the "long-established practice of marketing drugs by providing inducements to doctors and hospitals has come under increasing scrutiny in recent years as the government, pharmaceutical industry groups and doctors' associations have refined their guidelines on acceptable freebies," and such practices had "rarely been prosecuted until recently." Bob Goodman, an internist at Columbia University Medical Center who administers a Web site that opposes such practices, said that the current trial "could set a very important precedent that enough of this stuff is enough," adding, "Even very small gifts create a relationship, very well studied in the social sciences, between giver and receiver, and doctors can end up prescribing based on that relationship." However, some legal experts said that the case "will be complicated by the fact the government will be relying on a standard that was not clear when the alleged crimes were committed," the Post reports (Finer, Washington Post, 4/14).

ABC News' "World News Tonight" Tuesday reported on the start of jury selection for the trial of TAP executives. The segment includes comments from Assistant U.S. Attorney Michael Loucks; Peter Safir, a lawyer who represents pharmaceutical companies; U.S. Attorney Michael Sullivan; and Dr. Sidney Wolfe, director of the Health Research Group at the consumer advocacy group Public Citizen (McKenzie, "World News Tonight," ABC News, 4/13). The complete transcript of the segment is available online.