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Health care fraud schemes come in many different forms and are carried out by entities throughout the health care industry....

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OxyContin Marketing Fraud: Peddling Opiates for Profit

October 26, 2016

This fall, whistleblower attorney Bob Thomas has again been teaching as an adjunct professor at Boston University School of Law, offering a course on Health Care Fraud and Abuse.  As the title suggests, the course addresses the many ways in which fraudsters game the government health care reimbursement systems such as Medicare and Medicaid. We also discuss how the government and whistleblowers fight back.  This week the class discussed fraud involving OxyContin marketing.

Health Care Fraud and Abuse

One of the interesting aspects the course is the dynamic nature of the subject matter.  Each year the syllabus must be updated because of amendments to laws like the False Claims Act or regulations under statutes like the Food, Drug and Cosmetic Act (dealing with misbranding and off-label marketing, among other things), and case law interpreting new issues being litigated (such as the Supreme Court’s recent Escobar opinion).   The course also shows students why it’s important to read the news and to pay attention to the many ways the content of the course intersects with real life issues in front of us.

This week was a perfect example.  We discussed exclusion and debarment remedies and corporate integrity agreements.  Normally they the potential to be a fairly dry topic.  However, the discussion evolved into something directly connected to an evolving news story.

Purdue’s 2010 Settlement

As a case study on the exclusion of corporate officers from the Medicare and Medicaid programs after pleading guilty under the “responsible corporate officer doctrine,” students read the 2010 Friedman case. In that case, Judge Huvelle upheld lengthy periods of exclusions for three high ranking officers of Purdue Pharmaceuticals, Inc.

The Purdue settlement in 2007 was a blockbuster at the time. It involved $634 million in civil damages and criminal fines. A subsidiary pled guilty of criminal misconduct.  Three corporate officers did the same, paying tens of millions in personal fines. The company entered into a corporate integrity agreement with the government.  Why?

Because the company irresponsibly (and criminally) marketed its highly addictive painkiller OxyContin as safe and non-addictive, and as a reliable substitute for other non-addictive painkillers.  This behavior is credited by many observers as a key driver of our current opioid epidemic.  The investigation of the company started in 2001. It lasted several years, covering the marketing schemes going all the way back to the 1990’s.

Purdue is Back in the News Due to Opioid Fraud

Well right on cue, Purdue Pharmaceuticals was back in the news.  First, the always provocative but usually spot-on John Oliver took the company to task for ignoring patient safety and for fueling the opioid epidemic.  Then, this morning on the front page of the Boston Globe, another article appeared about Purdue and the fraud related to its marketing of OxyContin, showing how the company manipulated pharmacy benefit managers (“PBMs”) to remove limitations on physicians’ prescription-writing abilities for the drug.

This latter scheme was not part of the government’s 2007 prosecution of the company. However, it may be the subject of future lawsuits, according to the article.  With a huge public health crisis in the works and a flourishing black market for its addictive painkiller, it seems Purdue just couldn’t say no to schemes to get its product into as many hands as possible.  With sales rep bonuses as high as five times their base salary, the message was clear: Sell, Sell, Sell.  Lost was the horrible toll this would take on patients. Some patients would injure themselves intentionally to obtain further prescriptions of OxyContin.

Do These Remedies Stop Health Care Fraud?

For the BU students, it was a perfect example of one of the recurring themes of the course.  Do any of these remedies really slow down fraudsters?  If not, what should we be doing differently?

Client's False Claims Act case settles for $12.9 Million
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