Allergan subsidiary president arrested on kickback charges

Allergan subsidiary Warner Chilcott will plead guilty to a US felony charge of healthcare fraud, and settle a case of illegal marketing of its branded drugs for $125 million.

Warner Chilcott USA is charged with making kickback payments to doctors to influence them to prescribe the company’s drugs.

The company’s president, Carl Reichel, has been arrested in Boston on these charges, and faces a jail sentence along with at least two additional former Warner Chilcott employees. Reichel has pleaded not guilty.

Court documents claim a top-down policy existed at Warner Chilcott to encourage salespeople to push branded drugs to healthcare professionals and convince them that their more expensive drugs were medically necessary.

One such professional is 64-year-old Longmeadow gynaecologist Dr Rita Luthra, who appeared in US District Court, charged with receiving $23,500 in illegal kickback payments from Warner Chilcott, as well as violating the patient privacy act. Dr Luthra denies the charges.

The medications at the centre of the claims include Crohn’s disease treatment Asacol (mesalamine); acne antibiotic Doryx (doxycycline hyclate); Enablex (darifenacin), for urinary incontinence; the hormone treatment Estrace (estradiol) and the oral contraceptive Loestrin (ethinyl estradiol, norethindrone and ferrous fumarate).

The charges allege that in return for their co-operation and high level of prescription of Warner Chilcott medicines, doctors were hired as speakers on the company’s behalf and paid substantial sums on the condition that prescription numbers remained high. They were also lavishly treated by sales representatives at medical education events hosted at expensive restaurants, prosecutors say.

In addition, New Jersey-based Warner Chilcott admitted manipulating marketing claims for the osteoporosis drugs Atelvia (risedronate) and Actonel (risedronate sodium), so health insurance funded by federal health care programs would authorise prescriptions payments. Prosecutors allege Warner Chilcott sales representatives hoped to subvert federal programs’ preference for generic medicines by coaching doctors on which medical justifications would be likely to achieve a prior authorisation – even if they were inconsistent with patient’s needs.

Allergan’s $125 million kickback settlement follows an even larger one from Novartis recently for the same practice, for $390m.

Dublin-based Allergan was revealed last week to be in early-stage merger discussions with Pfizer. Reports over the weekend suggest the two companies hope to conclude a deal by the end of November.

Joel Levy

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