Federal Jury Acquits TAP Pharmaceutical Employees Accused of Paying Kickbacks to Doctors, Hospitals

In a "blow" to federal prosecutors, a Boston U.S. District Court jury on Wednesday acquitted eight current and former employees of Illinois-based TAP Pharmaceutical Products of criminal charges they defrauded the U.S. government by using kickbacks, trips and bribes to physicians, hospitals and other customers to increase sales, the Boston Globe reports (Murphy/Dembner, Boston Globe, 7/15). The case focused on practices that TAP used to market the prostate cancer medication Lupron and the heartburn treatment Prevacid (Maguire, AP/Philadelphia Inquirer, 7/15). The trial, which began in April, originally included 11 defendants, but federal prosecutors dropped the charges against three of the defendants because of insufficient evidence and health reasons. The defendants, indicted in 2001 and 2002, were charged with violating the Prescription Drug Marketing Act. Federal prosecutors alleged that gifts to six hospitals, two health plans, 26 group practices and 25 individual physicians included stays at resorts, tickets to sporting events and cash (Kaiser Daily Health Policy Report, 4/21). Prosecutors also alleged that the current and former employees conspired to defraud Medicare and Medicaid by advising physicians to bill the government for free samples of the drugs (Maguire, AP/Houston Chronicle, 7/14). However, lawyers for the defense argued that the employees were "trying to follow confusing drug-marketing rules and that [they] did not believe they were breaking the law," the Globe reports (Boston Globe, 7/15). In addition, the defense argued that the employees offered the free drug samples to promote the drug, which is legal, and did not encourage physicians to bill Medicare or Medicaid for them (AP/Philadelphia Inquirer, 7/15). In October 2001, 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 civil 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 (Kaiser Daily Health Policy Report, 4/21). TAP was not a defendant in the most recent case.

Reaction
The case was "closely watched" by the pharmaceutical industry because prosecutors focused "on sales practices common in the business" and targeted "midlevel salespeople" instead of the company itself or its top executives, the Journal reports (Tomsho/Armstrong, Wall Street Journal, 7/15). "The government tried to put the pharmaceutical practices on trial and failed to prove that they violated any laws," defense attorney William Kettlewell said. Defense attorney Robert Ullmann said that the acquittal "doesn't necessarily mean that drug companies will have free rein. It's a finding that these individuals were just trying to do their best with the rules as they understood them" (Boston Globe, 7/15). Boston U.S. Attorney Michael Sullivan said that his office "remains committed to the aggressive investigation and prosecution of criminal conduct by corporations and individuals in the health care industry." Katherine Stueland, a spokesperson for TAP, said that the company has refined its marketing and sales practices and that the verdict represents "a day of enormous relief for these individuals and their families" (Wall Street Journal, 7/15). Ethan Posner, a lawyer for pharmaceutical companies, said that the case "provides needed and important clarity for the government, the industry and for patients" in determining proper drug marketing practices (Boston Globe, 7/15).

Boston Globe Examines Effect of Trial
The Boston Globe on Thursday examined the reaction to the case and the reasons that "it is unlikely drug companies will return to expensive junkets and cash inducements described in the trial" despite the acquittal. Dr. Sidney Wolfe, director of the Health Research Group at Public Citizen, said that because of the October 2001 settlement, TAP "hardly got off," adding, "It would have been different if all the action had been against these people, and there hadn't been any action against the corporation." Mark Schreiber, a lawyer who represents physicians and companies in fraud investigations, said that although the TAP employees were acquitted, the trial would cause additional ''educational endeavors in health care to make sure companies and providers are on the safe side of the line." Tracy Miner, a lawyer for one of the TAP defendants, said, "The days of wining and dining doctors are pretty much over." However, Renee Markus Hodin, the associate director of Boston-based Prescription Access Litigation, said that while some of the "most egregious forms" of marketing to physicians "aren't happening, ... the kind of marketing that impacts both physician-patient relationship and the price of drugs is happening" (Rowland, Boston Globe, 7/15).