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As Doctors Write Prescriptions, Drug Company Writes a Check Part 2

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  • jtwagers7@aol.com
    H group. Here s Part 2 (and the url at bottom) Julie Over the last two years, Schering-Plough, which had sales of $8.33 billion last year, has set aside a
    Message 1 of 1 , Jun 27, 2004
      H group. Here's Part 2 (and the url at bottom)


      Over the last two years, Schering-Plough, which had sales
      of $8.33 billion last year, has set aside a total of $500
      million to cover its legal problems - mainly for expected
      fines from the Boston investigation and from a separate
      inquiry by federal prosecutors in Philadelphia who are
      investigating whether Schering-Plough overcharged Medicaid.

      Besides looking into whether Schering-Plough paid doctors
      large sums to prescribe the company's drug for hepatitis C,
      prosecutors are investigating whether many
      company-sponsored clinical trials for the drug were simply
      another way to funnel money to doctors.

      Dr. Chris Pappas, director of clinical research for St.
      Luke's Texas Liver Institute in Houston, said that
      Schering-Plough "flooded the market with pseudo-trials."

      Dr. Pappas and eight other liver specialists who were
      interviewed say the system worked like this:
      Schering-Plough paid physicians $1,000 to $1,500 per
      patient for prescribing Intron A, the company's hepatitis C
      treatment. In conventional clinical trials, participants
      are given drugs free, but the doctors said that in these
      cases the patients or insurers paid for their medication.
      Because patients usually undergo Intron A treatment for
      nearly a year and the therapy costs thousands of dollars,
      Schering-Plough's payments to physicians left plenty of
      room for the company to profit handsomely, the doctors

      In return for the fees, physicians were supposed to collect
      data on their patients' progress and pass it along to
      Schering-Plough, the doctors said. But many physicians were
      not diligent about their recordkeeping, and the company did
      little to insist on accurate data, according to Dr. Pappas
      and the others.

      One of the nation's most prominent liver disease
      specialists, who spoke on condition of anonymity for fear
      of angering big drug makers, called the trials "purely
      marketing gimmicks."

      "Science and marketing should not be mixed like that," the
      doctor said.

      Schering-Plough did more than encourage physicians to place
      patients on Intron A, many of the physicians said. They
      said the company would remove any doctor from its clinical
      program - and shut off the money spigot - if he or she
      wrote prescriptions for competing drugs, participated in
      clinical trials of alternatives to Intron A or even spoke
      favorably about treatments besides Intron A.

      The main competitor to Intron A, which Schering-Plough now
      sells as Peg-Intron, is Roche's comparably priced drug

      Dr. Donald Jensen, the hepatology director at Rush
      University Medical Center in Chicago, said he wanted to
      perform clinical trials using drugs from both
      Schering-Plough and Roche. "I was told by Schering-Plough
      that I couldn't do both - that I had to sign an exclusive
      agreement with them," Dr. Jensen said. "That was the
      juncture when Schering and I parted ways."

      Six specialists in liver disease said Schering-Plough also
      paid what it called consulting fees to doctors to keep them
      loyal to the company's products. The letter accompanying a
      check for $10,000 explained that the money was for
      consulting services that were detailed on an accompanying
      "Schedule A," said a doctor who insisted on anonymity. But
      when the doctor turned to the attached sheet, he said,
      "Schedule A" were the only words printed on an otherwise
      blank sheet of paper.

      Dr. Pappas, who in the past has consulted for
      Schering-Plough and worked for Roche, said that stories
      about the enormous sums that Schering-Plough paid its
      consultants were common among liver specialists. "These
      were very high-value consulting agreements with selected
      opinion leaders that looked like payments of money with no
      clear agreements on what was supposed to be executed," Dr.
      Pappas said.

      In an interview, Mr. Hassan and other top executives
      declined to discuss past marketing practices. Richard
      Kogan, the company's previous chairman and chief executive,
      declined to be interviewed.

      Schering-Plough's current management says that much has
      changed at the company since Mr. Hassan took over. The
      company no longer allows sales representatives or marketing
      executives to have any say over its clinical trials,
      physician education or medical consulting, they said. And
      in all clinical trials begun in the last year, they said,
      drugs have been provided free to the enrolled patients,
      rather than being billed to them or their insurers.

      "The temptation to give clinical grants to high prescribers
      and consulting agreements to high prescribers is why we
      pulled those decisions out of the hands of the sales
      representatives," said Brent Saunders, who was named senior
      vice president for compliance and business practices last
      year. "Sales representatives had an input into that process
      before, which I think is still fairly normal in the

      In the separate Philadelphia investigation, Schering-Plough
      is expected to plead guilty soon to charges that it failed
      to provide Medicaid with its lowest drug prices, as is
      required by law, and to pay a fine. Investigators are
      examining whether Schering-Plough, to gain sales with some
      private insurers, offered premiums, such as free patient
      consulting arrangements, with its drugs. Prosecutors are
      arguing that such incentives had a market value and meant
      that Schering-Plough was offering drugs to private payers
      at prices well below those offered to Medicaid. Many other
      drug companies are the targets of similar inquiries.

      The Boston inquiry into suspected kickbacks and improper
      marketing by Schering-Plough could take months more to
      resolve, people close to the investigation say.
      Schering-Plough may also be charged with obstruction of
      justice and document destruction as part of the Boston
      inquiry, according to the company's filings with securities

      Industry experts say the federal inquiries into
      Schering-Plough and the other drug giants have led some
      companies to adopt significant changes in the way they
      peddle drugs to doctors. Other companies have been slower
      to react. "These investigations came out of left field, and
      no one saw them coming," said Peter Barton Hutt, a former
      F.D.A. general counsel who now advises drug companies. "The
      industry has since had to reshape entirely what they are
      doing, but it was too late to redo what they'd been doing
      for years."

      Tony Farino, leader of the pharmaceutical consulting
      service at PricewaterhouseCoopers, said that as a result of
      the investigations many companies in the drug industry were
      hiring executives to police marketing and sales practices.

      "Reputational risk is something they're all trying to
      manage," Mr. Farino said, "because the damages from failure
      can be significant."

      Copyright 2004 The New York Times Company

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