January 16, 2006
What's Really Wrong With The New Medicare Drug Plan
IN ROLLING OUT ITS flawed Medicare drug benefit over the past two weeks, the Bush administration once again revealed how its incompetence and its philosophical contempt for government go hand in hand. Nearly a dozen states had to rush emergency assistance to low-income seniors threatened with being cut off from life-preserving medicines. Mark McClellan, the director of the Center for Medicare and Medicaid Services, mouthed platitudes about working day and night to get their switchover between plans right. Can “you’re a heck of a man, Mackie” be far behind?
But this short-term hiccup in drug program’s start-up is masking far deeper flaws in the bill that was rushed through Congress in late 2003. It did nothing to limit the drug industry’s ability to sell over-priced me-too drugs to unwary seniors or their insurers. And it actually forbade Medicare from negotiating prices, which every advanced industrial country in the world – not to mention the Veterans Administration, the Pentagon and large insurers do here.
The bottom line is that a program that could have provided real help for seniors at moderate cost to the taxpayers became a price support program that does almost nothing to rein in the industry’s worst marketing excesses.
The Senate Finance Committee highlighted one aspect of those excesses last week when Senators Chuck Grassley (R-Iowa) and Max Baucus (D-Mont.) launched an investigation into the drug industry’s use of tax-deductible educational grants to promote off-label drug use. The committee sent off subpoenas to the industry’s 23 largest drug firms after exposing at least one case – Johnson & Johnson’s anti-acid Propulsid, which was withdrawn from the market in 2000 because it caused heart arrhythmias – where the firm’s marketing department used the grants to create a phony patient advocacy group and buy off influential physicians to push the drug on children.
The committee’s investigators shouldn’t stop there. Educational grants ($1.5 billion in 2004) make up a tiny fraction of the industry’s total marketing expenses, which are heavily focused on pushing the off-label use of drugs. To gain insight into the extent of those practices, the committee staffers might want to take a look at a whistle-blower lawsuit that was unsealed in a Maine courtroom last week.
The suit was filed by Paul McDermott, a former drug salesman for Genentech, Inc. While the focus of his complaint was Rituxan, an anti-cancer drug heavily promoted for use with rheumatoid arthritis patients by its co-sponsors, Genentech and Biogen-Idec, its explosive charges are an indictment of the drug industry’s entire system for reaching out to physicians to promote the off-label use of drugs. The suit called the system an illegal kickback scheme aimed at defrauding Medicare.
Here’s how it works. According to the complaint, Genentech and Biogen-Idec identified key opinion leaders among rheumatologists and signed them up as consultants. The drug reps then set up a series of “rheumatoid arthritis roundtable dinners” at fancy steak houses in many major cities (Morton’s and Ruth Chris got most of the business). The key opinion leaders were flown in and paid $2,000 to $2,500 to give presentations on the off-label use of the drug.
Don’t forget: It’s illegal for a drug company itself to promote the off-label use of a drug. But if a company outsider (the “consultant”) at a continuing medical education seminar or at a fancy dinner presents the information, then the company can pretend its hands are clean. In the words of the complaint, “materials promoting Rituxan for off-label treatment of rheumatoid arthritis are more fully accepted and integrated into physicians’ personal belief systems when they are presented as educational in nature in contrast to material that is clearly identified as promotional.”
The suit gave examples of physicians who refused to participate after learning they couldn’t change the slides or materials conveniently prepared by Genentech and Biogen sales reps.
The suit also alleged that Genentech marketers identified key journals where articles promoting the off-label use of Rituxan should appear, encouraged its consultants to write articles that would appear in those journals, and, in some cases, wrote the articles for the consultants. Not surprisingly, the off-label use of Rituxan for arthristis, which costs about $15,000 per treatment, has soared in recent years. Since most rheumatoid arthritis sufferers are seniors, Medicare picks up the tab.
McDermott was eventually fired after asking for a transfer. Genentech and Biogen are contesting the charges. Though the case was brought under the Civil War era False Claims Act, which returns two-thirds of any recovery to the government, the Bush administration’s Justice Department last week refused to intervene in the case.
Jerome Kassirer’s book, “On the Take,” documents how buying off key opinion leaders, using them at fancy dinners, seeding the medical literature with thinly disguised promotional studies, and creating a phony continuing medical education industry are now common practices in many medical specialties. The Genentech-Biogen Rituxan case provides a textbook example of how the system works.
Does it amount to an illegal kickback scheme? The Senate Finance Committee investigation should be expanded to include the full range of abusive marketing practices that are corrupting the medical profession. It may take new laws to rein them in.