Pharmaceutical Companies Offer Doctors Free Trips, Gifts for Prescriptions

The following report, by John McKenzie, appeared on ABC News on April 13, 2004.

Eleven current or former sales executives from TAP Pharmaceutical Products are going on trial, accused of paying kickbacks to doctors and hospitals to get them to buy the company’s medications.

The company, based in Lake Forest, IL, has already paid $875 million to settle charges that it inflated prices on its prostate cancer drug Lupron, and that the company bribed doctors to prescribe it.

Now, federal prosecutors are going after the company’s sales executives who, according to the government, carried out the illegal scheme.

“What became the main marketing focus for the TAP employees was not ‘Was this drug better, did this drug have fewer side effects, is it cheaper?’ but instead, ‘Doctor, if you buy our drug, look at what we can do for you,’ “ said Assistant U.S. Attorney Michael Loucks.

And according to the indictment, the drug company executives did a lot. They gave doctors ski trips to Aspen, Colo., and golf outings to Scottsdale, AZ and Santa Barbara, CA.

There was money disguised as “educational grants” that covered doctors’ bar tabs at cocktail parties, prosecutors said.

Defense lawyers said the sales executives thought they were acting “completely within their job description.”

Other drug companies are also being investigated for allegedly bribing doctors to order their products. The net result, say prosecutors, is that consumers and government health plans are spending tens of millions of dollars more than they need to for medications.

U.S. Attorney Michael Sullivan said the TAP employees participated “in a broad scheme that picked the pockets of many cancer-stricken elderly Americans and all taxpayers.”

Since the alleged crimes, the pharmaceutical industry has strengthened its guidelines on gifts to doctors, which now are not supposed to exceed $100 in value. “The guidelines are much more specific and they are much more comprehensive in terms of their relationships with physicians,” said Peter Safir, a lawyer who represents pharmaceutical companies.

“Every pharmaceutical company has been much more compliance-oriented in this area, and I think it’s highly unlikely that you would see anything like the allegations in the TAP case [again],” he added.

But consumer groups say the guidelines are a smoke screen.

Dr. Sidney Wolfe of the Public Citizen Health Research Group in Washington told ABC News: “We have evidence since those guidelines went into effect of doctors being offered $1,500 to be a ‘consultant’— translated into English, so that the company can convince that doctor to prescribe their drug.”

Prosecutors are hoping that criminal indictments will be more effective at stopping the kickbacks than voluntary guidelines.