Posted by Bill L on May 2, 2001, at 9:22:44
A medical study was just published showing that Saint John's Wort was ineffective for major depression. When you read the details however, the study was only done for 8 weeks. But doctors know that users of SJW report that it takes at least 8 weeks to start working! So the study was intentionally flawed to make SJW look bad. Imagine how much money docs would lose if patients took an over the counter medication like SJW instead of going to the doctor.
Also, the Chicago Tribune published the following story on Sunday about how greedy doctors are when it comes to drugs. They switched from surgery to drug treatment only when paid to do so from the manufacturer of Lupron.
The important thing to keep in mind is- if something is working for your depression (such as SJW), don't stop using it just because of these "studies". Unfortunately the profit motive seems to come before the welfare of patients.
On the other side of the ethics spectrum, I think that the people who use this board such as myself are really very fortunate to have someone like Dr. Bob willing to donate his time to maintain a high quality discussion group.
Date: Sunday, April 29, 2001
Edition: Chicagoland Final
Section: News Page: 1 Zone: C
Source: By Bruce Japsen, Andrew Zajac and Laurie Cohen, Tribune staff
reporters.
The Lupron loophole: Cancer drug strikes it rich
The former president of a Lake Forest drug company, which is at the center
of a major health-care fraud investigation, says the firm exploited a loophole to get Medicare to pay inflated prices for what had been a money-losing prostate cancer drug.The move made the drug, Lupron, a blockbuster seller, produced huge profits for doctors and turned TAP Pharmaceutical Products Inc. into one of the
fastest-growing pharmaceutical companies in the country after it had teetered on the brink of financial ruin in the late 1980s.Medicare has paid more than $4 billion for Lupron in the last decade.
The former TAP president, Hank Pietraszek, 54, who left TAP in 1993, said the company played by the rules, but that the rules are flawed. "We certainly took advantage of the system," he said. "The way the system is set up encourages abuse."
TAP now is enmeshed in a high-profile federal investigation of its marketing practices that already has led to criminal charges against four urologists
and may result in the company paying a settlement of $800 million or more--the largest health-care fraud settlement by a U.S. drugmaker.TAP's owners, Abbott Laboratories of North Chicago and Takeda Chemical Industries of Japan, would pay the penalty.
Pietraszek is the first high-ranking current or former TAP official to comment publicly about the company's sales strategy. His description of TAP
sales practices confirms accounts in a May 1999 Tribune investigation and sheds light on the genesis of a bold plan to use an appeal to doctors'
wallets and sales pitches by attractive women to market the drug."We never broke the law deliberately," he said, referring to the Medicare system. "We may have crossed the line."
Congressional investigators last fall uncovered evidence that at least 10 pharmaceutical companies, including TAP, manipulated prices to gain market
share for the limited number of drugs covered by Medicare, the health insurance program for the elderly and disabled. Congress has not acted to change the reimbursement system.TAP got Medicare to reimburse doctors for Lupron at a hefty price by taking advantage of a loophole that effectively lets pharmaceutical companies
determine how much physicians can charge the government for their drugs.TAP sold Lupron to doctors at steeply discounted prices, guaranteeing them fat profits on the prescriptions. As Lupron sales soared, some doctors
reaped as much as $400,000 a year on the drug, Pietraszek said. "I'm not embarrassed to tell people that we made a lot of money," said
Pietraszek, now a health-care industry consultant in Chicago. "We were extremely aggressive."But federal prosecutors have alleged that TAP went beyond hard-charging sales practices. Charges against a Connecticut urologist allege the company
engineered a kickback scheme by encouraging doctors to bill Medicare,insurers and patients for free samples and to profit from steeply discounted
prices.It was TAP's "objective, in part, to use the Medicare program as its checkbook for the indirect payment of kickbacks and bribes to physicians," according to the charges. Neither TAP nor any of its employees have been
charged in any of the cases against physicians.
Settlement funds adequateNeither TAP nor Abbott would comment about the investigation, except to say that negotiations with the government are continuing. A week after Abbott
announced an increase in its reserve fund, CEO Miles White told shareholders at its annual meeting on Friday that Abbott and Takeda have adequate
financial resources to cover a possible settlement.TAP spokeswoman Kim Modory said Friday: "TAP believes its pricing systems fully comply with government guidelines and regulations and that the company
has conducted its business legally, within the system."Pietraszek said he has testified under immunity before a federal grand jury in Boston investigating the tactics TAP used to sell Lupron. Among the
issues under federal scrutiny is whether TAP sales representatives encouraged doctors to bill Medicare for free samples, which would be a
violation of federal law.In 1993, the American Urological Association warned its members against billing for free samples of prostate cancer drugs. But Pietraszek said TAP
officials did not promote the illegal use of free samples during his tenure. "I used to tell the sales reps not to give free samples because it was
costing them commission," he said.Pietraszek was named president of TAP in 1986, an assignment he likened to taking the helm of the Titanic. The company lost $25 million that year and
Lupron, then the venture's only product, was a close-to-impossible sell. The drug, which suppressed the male hormone that feeds prostate cancer, had to
be injected daily by patients.Urologists preferred a more direct, and profitable, means of hormone suppression: surgical castration, a procedure that could earn them a fee of
roughly $500. They collected little for prescribing Lupron, and had the added burden of teaching patients how to inject it.Even though many patients preferred injections to surgery, TAP found that doctors needed a financial incentive to prescribe the drug. "We needed to sell them a drug that wasn't going to take away their income," Pietraszek said. "That was the only way to make [Lupron] successful."
Pietraszek had a brainstorm, born of his service in Japan as an executive for Abbott. In Japan, he recalled, drugs were sold out of doctors' offices
and, as a result, physicians prescribed more. He believed U.S. doctors would accept the drug if they could dispense it, and collect the income from it.Fellow executives worried that physicians selling Lupron would upset wholesalers and pharmacists. "They thought I was crazy," Pietraszek said.
Winning federal approval for doctors to dispense the drug provided Lupron with another advantage: It became a candidate for Medicare coverage, a critical source of revenue since most users of the drug were elderly men.
Medicare does not normally cover outpatient drugs, but does pay for a limited menu of medications administered under physician supervision.
Medicare picks up 80 percent of the tab, with the patient being responsible for 20 percent.At about the same time, TAP made Lupron far more convenient, devising a formulation that required only a single injection every 30 days instead of
every day. "The rest was history," Pietraszek said. "The thing just took off."There was, to be sure, residual resistance from urologists who needed to be convinced that the prescribing pad would be more lucrative than the scalpel.
But Pietraszek, a tall, gregarious former college basketball player with a booming voice who does not conceal pride in his marketing prowess, was up to
the job.
Women in sales forceHe built a sales force of about 500, "a good number of them charming young women that urologists liked to see," he said. Unlike other specialties in
which women have made dramatic inroads, urology remains more than 90 percent male.Pietraszek also favored junior military officers because "they were highly disciplined" and "they were already four years behind their buddies coming
out of college" in income.The TAP president outfitted his sales force with laptop computers to help illustrate Lupron's profitmaking potential.
Pietraszek said sales reps drove home the point by asking doctors how many prostate cancer patients they had, then fed the numbers into a computer and
showed the results, saying, `Here's how much money you'll make' from Lupron.The calculation was dubbed "return to practice" because "profit" was deemed too crass, Pietraszek said.
For example, in 1997, a physician could make $103 a month per patient from a Lupron dose because Medicare paid $515, which was 25 percent higher than
TAP's $412 charge to doctors, according to TAP documents made public last fall by the House Commerce Committee. The Tribune in 1999 found some
urologists were collecting as much as $284 a dose.Doctors soon became accustomed to the new revenue stream and looked for ways to make even more money, Pietraszek said. "I used to have doctors call me up
and tell me to raise the price" for Medicare reimbursement, he said.Mike Pretl, a lawyer for the American Urological Association, in Baltimore, said most doctors prescribed Lupron because it was an effective treatment, not because they made money on it.
But, Pretl conceded, "I can't deny that some doctors may be doing what we would frown upon." Pretl said that the urology association has embarked on
an education campaign to train members on ethical dealings with drug salespeople.Lupron sales for prostate cancer peaked at about $734 million in 1997, according to IMS Health, an industry information service. The lion's share
was paid for by Medicare. Of the $3.1 billion the federal insurer spent on outpatient drugs in 1999, about $500 million was spent on Lupron.The big bill attracted the attention of federal regulators and state Medicare overseers. In 1997, the Medicare administrator in South Carolina
decided to reduce the reimbursement price for Lupron to that of a lower-priced competitor drug. Other states followed suit.
poster:Bill L
thread:61365
URL: http://www.dr-bob.org/babble/20010424/msgs/61365.html