Outcome Health may be fending off lawsuits, allegations, investigations and the media spotlight, but the company still aims to get some work done. As lawyers wrangle and an internal investigation continues, employees are scrambling to secure the company's reputation and keep growing its in-office marketing network and platform.
Speaking exclusively with FiercePharma this week, Outcome Health’s Roger Sawhney, senior VP of life sciences strategy and business development, said only a “small number” of clients have put campaigns on hold and that Outcome is still signing ad deals to the tune of millions and working on improving its technology.
The company is facing allegations of misleading clients and investors with fabricated data on the size of its network of in-office display screens and number of advertisements. An internal investigation is ongoing as auditors sift through data provided to its advertisers.
“There have been a very small number of clients who have decided to wait for some of the audit results to come back to restart programs with us, but the vast majority of customers continue to drive their programs and we have signed up new customers across multiple segments,” Sawhney said.
Outcome has recently secured commitments for “multimillions of dollars in programs from new and existing customers” across the life sciences, medical technology and health and lifestyle industries, he said.
The controversy began a month ago when a Wall Street Journal investigation spurred by a former employee whistleblower alleged that Outcome had misled some advertisers by overcharging or, in the case of some salespeople, fabricating evidence of campaign outcomes. In the wake of those allegations, at least one big name pharma advertiser, Bristol-Myers Squibb, decided not to renew for this year or 2018, the newspaper reported earlier this week. Several large ad agencies, including Omnicom Group, Interpublic Group, Havas, and Publicis Groupe are advising clients to suspend advertising contracts until audits are complete, the WSJ says.
To that end, Outcome is running concurrent audits: its own internal audit of the more than 200 campaigns it ran in 2017 and an independent audit by third-party provider BPA. Outcome has also hired Dan Webb, a high-powered trial lawyer at law firm Winston & Strawn and former U.S. Attorney, to conduct an internal investigation into the allegations of wrongdoing or improper billing by employees.
Webb’s investigation has been in the works for about a month and Outcome was told at the beginning it would take two to three months. Sawhney said they’re hoping for results on the shorter end of that timetable, with resolution hopefully to come in the next month.
The BPA audit is ongoing. Beginning last month, Outcome began offering clients a third-party proof of performance audit on any program.
Initial results from the internal review of campaigns, which Outcome turns over to BPA for independent verification, show a 90% commit-to-delivery rate, meaning that 90% of the projected number of devices were delivered, Outcome said in a statement.
Prominent investors in the company, including funds connected with Goldman Sachs and Google parent company Alphabet, sued Outcome and founders Rishi Shah and Shrada Agarwal, claiming they'd been given faulty information before deciding to invest almost $500 million in the company. The lawsuit accuses the company and founders of fraud, and the plaintiffs have asked a New York state judge to freeze $225 million in funds as the allegations are investigated. After a hearing Wednesday, the judge postponed the decision until next week.
Last week, one of Outcome's prominent hires from the past year left the company. Chief Operating Officer Vivek Kundra stepped down on Nov. 3 for personal reasons, the company said. Kundra was the former first chief information officer of the U.S. under the Obama administration and had joined Outcome in February. CEO Rishi Shah said in a statement that Kundra “continues to believe in the long-term vision for Outcome Health.”
Despite the barrage of bad news, Sawhney, a 20-year industry veteran formerly in the healthcare practice at Bain and in corporate strategy at Novartis, said the general mood at Outcome remains optimistic.
“We need to get all of this behind us,” he said. “We need to put the operational plans we have been developing over the last six months into place. We’re automating as much as we can around campaign management, inventory management and ad delivery so that we take out any chance of error in terms of human intervention there. We’re in the midst of that, so I would say the mood is optimistic. Once we put those systems in place, the true value of this platform—the ability to positively influence the interaction between patients and physicians—will be realized. And realized robustly in a high quality, repeatable way.”