Key Topic 5: Value Transfer
There are several means by which financial transactions and other ‘transfers of value’ (e.g. provision of hospitality) may occur between pharmaceutical companies and health professionals and other external stakeholders.
In the past these transactions have not always been totally transparent which has led to criticism of the industry (as well as criminal prosecutions and large fines in some cases).
The key principle to remember is that the general public should be able to trust their health professional to recommend, administer or purchase appropriate care and treatments based solely on clinical evidence and experience.
Their decisions should not be unduly influenced by the pharmaceutical industry.
This means that support must not, in any way, be offered, promised or made as an incentive or reward for any past, present or future willingness to prescribe, administer, approve, supply or use products or services sold or provided by AstraZeneca, or to obtain or retain business, or to gain any other business advantage for AstraZeneca.
Transfers of value can be made to individuals or organisations. Generally, transfers of value fall into the following categories:
- Sponsorship – e.g. financial support provided to an individual in connection with attendance at a meeting or training course, or sponsorship of an event. Sponsorship usually implies some item in return (recognition of support or opportunity to have a stand etc)
- Contributions – e.g. financial support provided to a healthcare organisation
- Donations - financial support provided to a charity
- Fees and expenses – this covers fees paid to health professionals who are used as consultants to provide a service (e.g. for participation in an advisory board) or speakers etc
- Items of Value – may include gifts, items of medical utility, items used to assist in screening or diagnosis of patients, items linked to the safe and effective administration of company products, logistical items, samples, awards and patient programmes
Consider these examples:
‘Kickbacks’ in the US
In the US in October 2015, Warner Chilcott agreed to plead guilty in the District of Massachusetts to criminal charges that the company committed a felony violation by paying ‘kickbacks’ to physicians throughout the United States to induce them to prescribe its drugs. Other charges included fraud and making unsubstantiated claims for one of its products.
The US government charged that, between 2009 and 2013, Warner Chilcott, through its employees acting at the direction of members of the company’s management team, knowingly and willfully paid remuneration to physicians in order to induce those physicians to prescribe Warner Chilcott drugs.
Among the allegations were the following relating to engagement of speakers and meetings:
“Warner Chilcott provided payments, meals and other remuneration associated with so-called “Medical Education Events,” which included dinners, lunches and receptions. These events, which were often held at expensive restaurants, often contained minimal or no educational component and were instead used to pay prescribing physicians in an attempt to gain a “competitive advantage” over other companies. Warner Chilcott also enlisted high-prescribing physicians as “speakers” for the company. In fact, the “speakers” often did not actually speak about any clinical or scientific topics, and, instead, the payments were primarily intended to induce prescriptions. For instance, Warner Chilcott informed “speakers” who were not prescribing at a high volume that they would not be paid for subsequent events unless their prescribing habits increased.”
Warner Chilcott agreed to pay fines totaling $125 million, and some of its staff faced criminal prosecutions.
Contributions
In the UK in 2006 Lilly agreed to fund an educational post in a local diabetes clinical network for 2 years. The support was approved by Lilly’s Grants and Donations Committee. This committee was comprised of senior personnel from medical, legal and corporate affairs and the decision to grant any funding rested entirely with this committee. No member of sales or marketing formed part of the committee.
Lilly marketed various insulin products in the UK.
A sales representative for the insulin products called on a consultant who was a member of the diabetes clinical network.
During the call the representative allegedly implied that the funding of the educational post was to be reviewed and that managers were not happy with the current situation and that this funding would probably be under threat, since the hospital’s use of Lilly insulins had not increased.
The representative was also reported to have said “we are basically paying you to use Novo Nordisk’s insulins”. (Novo Nordisk was a competitor company).
Which of the following do you agree with?
- It is reasonable for Lilly to review the funding of the educational post it is reasonable to review the funding after 2 years to make a decision on whether to continue funding. But this must be entirely unrelated to any product sales and should not involve sales personnel.
- The representative appears to have inappropriately linked the donation from Lilly to product sales
- If the representative was acting outside of Lilly’s instructions then the company cannot be at fault
Ruling
The consultant complained to the UK Authority stating that the representative’s comments were a threat to cut funding unless the department started to use Lilly’s insulins and that this was nothing short of blackmail. The Authority ruled that the representative had linked a company donation to the sale of its products and that this was unacceptable. Although the representative was acting outside of Lilly’s instruction or authority, the company was ruled to have brought discredit upon the pharmaceutical industry.
Contributions (2)
In 2008 in the UK an article in the Financial Times alleged that Roche had sold large quantities of its product Xenical to the operator of a chain of private UK diet clinics, in spite of suspicion at one stage that the product was being sold illegally, and agreed to provide him with £55,000 for the purchase of another diet clinic.
On investigation the UK Authority established that Roche had sold Xenical to the owner of the chain of diet clinics but had not checked his professional status. In fact he was not a health professional, but was supplying the product to members of the public.
A document prepared by a Roche employee headed ‘Private Clinic Funding Proposal’ was discovered which referred to the funding of a new diet clinic. It stated that if Roche agreed to the proposal it was hoped to complete purchase of the diet clinic before the end of June 2003.
The Private Clinic Funding Proposal also included sales analysis data for 2003 and 2004 showing the return on a £55,000 investment. The Private Clinic Funding Proposal referred to the diet clinics as ‘a real Xenical success story’. The owner was reported as having put enormous efforts into establishing Xenical across his group of clinics as the medicine of choice for safe and effective long-term weight loss.
The Panel noted that Roche had agreed to sponsor the purchase of a further clinic. Payment was to be in two parts, £20,000 payable in August 2004 and £35,000 in January 2005.
Which of the following do you agree with?
- The purchase of the clinic would be acceptable if there was no link to the sales of Xenical contributions should not be given to any individual for their personal benefit
- Funding a diet clinic which was not owned by a private individual could be acceptable
- The proposal should not have mentioned Xenical sales this shows that the two were linked which is not acceptable
- This funding would enhance patient care as obesity is a common health problem the owner was not a health professional and was not suitably qualified to prescribe and so there were patient safety issues here
Ruling
The Authority was extremely concerned about the circumstances which had led to a prescription only medicine in effect being supplied to a person who was not a health professional and by that person to patients. It was difficult to see how providing £55,000 to an individual to purchase a private diet clinic was a medical and educational good or service that would enhance patient care or benefit the NHS. The Panel considered that the arrangements brought discredit upon, and reduced confidence in, the pharmaceutical industry. This ruling was upheld on Appeal.
Inducements to prescribe?
In the US in 2014 the Department of Justice made some allegations that Teva and one of its subsidiaries made payments to a physician, Dr. Michael J. Reinstein, to induce the prescription of generic clozapine, an anti-psychotic medication.
It was alleged that the company agreed to pay Dr Reinstein $50,000 under a one-year “consulting agreement”, and allegedly also provided all-expenses paid trips to Miami for Dr Reinstein, his wife and several of his employees. Dr Reinstein quickly became the largest prescriber of generic clozapine in the country, and prescribed the drug for many elderly patients. Allegedly, the payments and other forms of remuneration from IVAX (the subsidiary) and later Teva Pharmaceuticals continued for many years, and resulted in the submission of thousands of false claims to the Medicare and Medicaid (insurance) programs.
The company agreed to pay $27.6million to settle the allegations.
