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Daiichi Sankyo pays $39m in whistleblower case

Accused of paying US doctors to prescribe its drugs

Daiichi Sankyo logo 

Japanese pharma company Daiichi Sankyo has agreed to pay $39m to settle allegations that it paid kickbacks to doctors in return for prescribing its drugs in the US.

The civil settlement with the US government and state authorities relates to a lawsuit brought after a whistleblower claimed the company had acted inappropriately with regards to its marketing practices for several of its products, including high blood pressure treatment Benicar (olmesartan) and various combinations of the drug with other antihypertensive agents.

The charges paid kickbacks to doctors in the form of honoraria and other benefits provided through a speaker programme, according to the US Department of Justice (DoJ), which noted that the practice was first highlighted by former Daiichi Sankyo sales rep Kathy Fragoules.

Under the whistleblower provisions of the False Claims Act, Fragoules will take a $6.1m share of the settlement.

The DoJ alleged that payments were made to physicians even when they took turns “speaking” on duplicative topics over Daiichi-paid dinners, when the recipient spoke only to members of his or her own staff in his or her own office, or the associated dinner was so lavish that its cost exceeded Daiichi's own internal cost limitation of $140 per person.

"Drug companies are prohibited from using lavish entertainment and padded speaker programme payments to induce physicians to prescribe their drugs," commented US Attorney Carmen Ortiz for the District of Massachusetts.

In addition to the settlement, Daiichi Sankyo will pay for the costs of bringing the action and has also entered into a Corporate Integrity Agreement with the US Department of Health and Human Services (DHHS), which requires it to undertake "substantial internal compliance reforms" for the next five years.

Ken Keller, Daiichi Sankyo's US commercial president, said the company was pleased to have settled the matter and would "continue to review and strengthen our policies, procedures and processes to ensure compliance with applicable laws, regulations and industry standards, and to meet our own high ethical standards."

The Physician Payment Sunshine Act - which came into effect in August 2013 - is expected to make the practices alluded to in this civil complaint harder for pharma companies to carry out, as they will now be obligated to report all payments over $10 to doctors to the US Centers for Medicare and Medicaid Services (CMS).

The increased public interest and transparency resulted in an almost immediate decline in speaker payments, according to data published last year by ProPublica, with GlaxoSmithKline (GSK) saying it would use only in-house doctors and scientists to speak on behalf of its drugs.

Prior federal actions on alleged inducements for promoting or prescribing medicines in the last few years have involved Novartis, Amgen, Johnson & Johnson, Elan, Eisai, Abbott and Boehringer Ingelheim, amongst others.

Article by
Phil Taylor

14th January 2015

From: Regulatory

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