Pharmaceutical Sales Reps Allege Kickbacks To Physicians

procrit.jpgIn a case originating in the 1990’s, former pharmaceutical sales representatives for Johnson and Johnson (J&J) alleged 80% of a medication they marketed, Procrit, was used to commit Medicare Fraud; an amount equal to $3 billion for the company as a whole. Sales of the drug were promoted using several methods, all alleged to be illegal. One method was called “the spread.” The spread is the difference between the amount J&J would sell the drug using undisclosed discounts to physicians and hospitals and the amount those providers could claim and receive in reimbursement.
J&J, it is alleged, artificially inflated its prices as reflected in reports to the public and government to increase the spread. Those allegations are actually not new, J&J had previously settled with the United States over that issue. J&J sought to have the case dismissed on that basis and was initially successful. However, the suit also alleges that the manufacturer also engaged in other practices such as providing “discount cards” disguised as kickbacks at $1000 per card for physicians to use to purchase the already discounted drugs. The physicians would then bill Medicare for the full price of the drug even though they had paid next to nothing for the drug. In addition the suit alleges that J&J would pay large grants and speaking fees as bribes to physicians to purchase the drug. Those allegations will be allowed to proceed.
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