Need more evidence that pharma’s fancy dinners with doctors don’t automatically count as educational events? Check out the details behind Valeant Pharmaceuticals’ recent settlement with the Justice Department, over its Salix unit’s gastrointestinal drug marketing.
According to the whistleblower complaint joined by the U.S. Attorney’s Office, Salix sales staff stepped over multiple lines when entertaining physicians on behalf of a range of brands, including the irritable bowel syndrome drug Xifaxan and the constipation med Relistor.
They spent far more on food and drinks than the “modest” amount allowed--$200 to $300 per person, in some cases--and gave short shrift to the educational program purportedly at the center of each event.
Sales managers pressured reps to set up more events and expected the sales force to “spend, spend, spend, spend, spend, spend,” one former rep is quoted as saying. And as one sales manager’s email stated, the guests were expected to be people who’d deliver “ROI” down the road, the lawsuit says.
Live speakers spent little or no time talking about the drugs involved, the lawsuit says. Slide presentations weren’t shown in full, and sometimes weren’t shown at all. The guest lists sometimes included people without “legitimate interest” in the topic at hand, such as doctors’ spouses.
When it came time to fill out paperwork afterward, Salix employees responsible for certain programs added names to the guest list, to spread out a big restaurant tab over more guests than actually attended. That way, they could fudge the per-head cost to avoid raising red flags to their higher-ups. Some reps reserved the most lavish meals for doctors who delivered the most scripts for Salix products.
For Xifaxan alone, Salix spent about $20 million on honoraria and meals. For all six of the GI products involved, the tally was 10,000 speaker programs at a cost of about $25 million, the lawsuit states.
These details are mostly familiar to readers of the DoJ’s lawsuits against drugmakers, even down to the names of the high-restaurants Salix reps and their doctor guests frequented. Nobu and Le Bernardin in New York, for instance.
One departure from the norm: Salix not only paid live speakers, but shelled out for physicians to create video presentations for speaker events. They were dubbed “doc-in-the-box” programs, and they were easily dispensed with. When the group didn’t want to take the time to view a program, the laptop or iPad would be set aside to run the presentation unheeded.
All of these details add up to the DoJ’s case against Salix, which Valeant acquired in a 2015 buyout. The allegations run from January 2009 to December 2013, so they pre-date Valeant’s ownership. Salix agreed to pay $54 million to federal and state governments to resolve allegations under the Anti-Kickback Statute and False Claims Act.
Another semi-unusual aspect of this settlement: Salix “made extensive admissions regarding its conduct,” the Justice Department said in a statement. For instance, it acknowledged that it paid doctors to serve as quote-unquote speakers at events that were a., essentially social events, and b., included little or no time for medical talk.
“With today’s settlement, Salix has taken responsibility for its conduct and agreed to pay a significant financial penalty,” said Manhattan U.S. Attorney Preet Bharara, who’s been prosecuting a variety of pharma marketing cases. “This action and settlement is part of our continuing effort to pursue health care providers who put their profits ahead of patient safety.”
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