Wednesday, October 27, 2010

Glaxo Case May Not Be Over

October 27, 2010
Glaxo Case May Not Be Over
New York Times

The government is still following up on GlaxoSmithKline’s manufacturing problems in Puerto Rico after Tuesday’s news that the company would pay $750 million to settle criminal and civil complaints about adulterated products.

For months, federal investigators have talked about a renewed determination to hold company officials, not just corporate entities, accountable for false claims filed with government health programs that buy such products. The federal False Claims Act has recovered billions of dollars for health care fraud, but companies, not executives, are signing the plea deals.

The GlaxoSmithKline case started with a whistle-blower complaint filed six years ago by the plant’s former quality control manager. Her case ended yesterday with a $96 million share of the recovery.

The United States attorney for Massachusetts, Carmen M. Ortiz, was asked in an interview Tuesday whether there could still be any individual accountability in the case. “I really shouldn’t comment specifically in relation to this case,” she replied, “because the investigation is ongoing.”

Does that mean company officials might still be under scrutiny? “The corporate aspect is finally settled,” Ms. Ortiz replied. “I would rather not say anything else.”

One former Glaxo official was singled out in the indictment of the company in the Puerto Rico case – an unnamed person who was hired in April 2003 as the site director of the giant manufacturing facility, and accused of interfering with quality complaints. The person was removed from that job in October 2004.

In most circumstances, however, 2004 would fall outside of the five-year statute of limitations for federal misdemeanor prosecutions.

But the government can pursue individuals under a strict liability standard known as the Park doctrine — a line of prosecution that has many pharmaceutical executives worried.

Named after a 1975 Supreme Court case, that doctrine allows misdemeanor prosecution of company officials for violating the federal Food, Drug and Cosmetic Act whether or not there is evidence the official knew of the violations. The individual needs to be in a position of authority.

Wednesday, October 20, 2010

Kan doctor, wife sentenced in 'pill mill' case

Kan. doctor, wife sentenced in 'pill mill' case
The Associated Press
Oct. 20, 2010

WICHITA, Kan. — A Kansas doctor who ran a clinic linked to dozens of overdose deaths was sentenced Wednesday to 30 years in prison while his wife got 33 years in a case the judge said was an "avoidable tragedy motivated by greed."

Dr. Stephen Schneider looked grim and his wife blinked back tears as their sentences were pronounced in U.S. District Court in Wichita.

The Haysville couple were convicted in June of unlawfully writing prescriptions, health care fraud and money laundering. Jurors convicted them of a moneymaking conspiracy that prosecutors linked to 68 overdose deaths.

U.S. District Judge Monti Belot told the 57-year-old physician that the evidence showed that he earned and deserved the nickname "Schneider the Writer" because in many cases writing scripts was his only form of medical care.

"For whatever reason, Steven Schneider utterly failed to live up to his oath to 'do no harm,'" Belot said.

The judge said the doctor was put on every possible notice that the controlled substances he was prescribing — particularly the potent painkiller Actiq — was addicting, harming and killing his patients but did nothing to stop it.

Belot reserved some of his most scathing comments for Linda Schneider, 52, who he characterized as more culpable for creating and perpetuating the clinic as a generator of income rather than a place for competent medical care. He blamed the doctor for knowing that the clinic was mismanaged and doing nothing to stop the practice.

"Had she not been involved in the operation of the clinic, or had she approached her role there in a professional and responsible way, none of us would be here today," Belot said. "That doesn't excuse Stephen Schneider's wrongful acts, but it may somewhat explain them."

Besides conspiracy, the Schneiders were found guilty on five counts of unlawfully writing prescriptions and 11 health care fraud counts. Linda Schneider was found guilty of 15 money laundering charges while Stephen Schneider was convicted of two.

Although the doctor has no criminal record, his wife has a previous felony conviction for fraud.

"I believe the evidence has shown Linda Schneider is a scheming, manipulative, uncaring criminal who believed, erroneously, that she was smart enough to 'get away with it,'" Belot said. "A big mistake on her part."...

Tuesday, October 19, 2010

Drug Companies Hire Troubled Doctors As Experts

October 19, 2010
Drug Companies Hire Troubled Doctors As Experts
NPR Staff and ProPublica

Drug companies say they hire the most-respected doctors in their fields for the critical task of teaching about the benefits and risks of the companies' drugs.

But an investigation by ProPublica has uncovered hundreds of doctors receiving company payments who had been accused of professional misconduct, were disciplined by state boards or lacked credentials as researchers or specialists.

To vet the industry's handpicked speakers, ProPublica created a comprehensive database that represents the most accessible accounting yet of payments to doctors. Compiled from disclosures by seven companies, the database covers $257.8 million in payouts since 2009 for speaking, consulting and other duties. The companies include Lilly, Cephalon, AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Merck and Pfizer.

Although these companies have posted payments on their websites — some as a result of legal settlements — they make it difficult to spot trends or even learn who has earned the most. ProPublica combined the data and identified the highest-paid doctors, then checked their credentials and disciplinary records.

That is something not all companies do.

"Without question, the public should care," said Dr. Joseph Ross, an assistant professor of medicine at Yale School of Medicine who has written about the industry’s influence on physicians. "You would never want your kid learning from a bad teacher. Why would you want your doctor learning from a bad doctor, someone who hasn't displayed good judgment in the past?"...

Monday, October 4, 2010

U.S. pays as Prudential invests troop death benefits

U.S. pays as Prudential invests troop death benefits
By David Evans
Bloomberg News
Sunday, October 3, 2010

When Prudential Financial invests the death benefits owed to survivors of U.S. troops killed in battle, the money comes from a source with deep pockets: the federal government.

After a service member dies in combat - including the more than 4,000 who have been killed in Iraq and Afghanistan - the Department of Veterans Affairs sends Prudential the full amount of each family's life insurance coverage, usually $400,000.

The government has paid Prudential $1.7 billion for these benefits since 2003, when the war in Iraq began, according to information provided by the VA.

Prudential holds that taxpayer money, invests it and reaps the gains.

Here's how it works: If survivors request a lump-sum payment of the death benefit, Prudential opens a retained-asset account, a quasi-checking account that allows families to draw money when they are ready to spend it.

(READ: Washington Post special report on soldier's traumatic brain injuries and coming home a different person)

Until the money is used, it stays in Prudential's corporate account. There, the insurer invests it, mostly in bonds, making returns as much as eight times what it is paying out to holders of the retained-asset account.

What this means is that Prudential is investing - and profiting from - death benefits owed to service members' families, using money provided by the government.

"They have what appears to be a nice sweetheart deal with the federal government," says Michael Powers, a professor of risk management and insurance at Temple University in Philadelphia. "This strikes me as the same sort of thing as those classic stories of the government paying hundreds of dollars for a wrench or a toilet seat."

Ninety-five percent of survivors paid by Prudential ask for lump-sum payments, the VA says. Since 1999, the company has sent out more than 60,000 Alliance Account checkbooks, instead of checks, covering more than $7 billion in death benefits when families asked for full payouts...