Friday, February 8, 2008

What's Left of Merck?

The Legal Intelligencer reports that Merck agreed to pay more than $671 million to settle whistleblower claims arising out of marketing tactics to encourage doctors to write more prescriptions for drugs like Vioxx and Zocor. I read an article that came out in Hastings Law Review last May, Informed Consent: Requiring Doctors to Disclose Off-Label Prescriptions and Conflicts of Interest (58 Hastings L. Rev. 967), by Margaret Johns (UC Davis) suggesting that patients should give informed consent before a doctor prescribes off-label prescription drugs. The informed consent would, in a nutshell, include not only information that the drug is being used "off-label" but any "perks" that the doctors received for prescribing the drug. From the Legal Intelligencer’s article this morning, it sounds like doctors should disclose their perks before prescribing drugs, period. Here’s an excerpt:

A settlement of almost $400 million in the Philadelphia case stems from a seven-year investigation that began when H. Dean Steinke, a former Merck district sales manager, blew the whistle by filing claims under the False Claims Act that alleged Merck was using several illegal marketing practices. Steinke -- who was represented by attorneys Steven H. Cohen of Chicago, BethAnne Yeager of Madison, Wis., and Mark Kleiman of Santa Monica, Calif. -- will be paid a reward of nearly $44.7 million, prosecutors said.

The $250 million settlement of the Louisiana case stemmed from a whistleblower suit brought by William St. John Lacorte, a physician who alleged that Merck gave steep discounts for Pepcid to hospitals that agreed to primarily use Pepcid instead of competitor drugs.

Prosecutors said both settlements include interest that will boost Merck's total payout to $671 million.

Under the terms of the Philadelphia settlement, federal agencies will receive $218 million and the 49 states with Medicaid programs and the District of Columbia will share $181 million.

The Louisiana settlement is similarly divided, with $137.5 million for the federal government and $112.5 million for the states. LaCorte's reward from the Louisiana settlement has not yet been decided, prosecutors said.


Steinke's suit also accused Merck of paying kickbacks to doctors under the guise of marketing training programs such as "preceptorships," in which physicians were paid to allow a Merck sales rep to "shadow" them for half a day, and "tutorials," in which doctors were paid to listen to a Merck employee's presentation and then evaluate it. The suit said one physician was paid 22 times by Merck, at $250 a session, and seven times at $300 a session, for preceptorships.

Steinke's suit also alleged that Merck treated high-prescribing physicians to lavish vacations that the company termed "consultant meetings." One such consultant meeting was held in September 1998 at the luxurious Crystal Mountain Resort in Thompsonville, Mich., the suit said. During the event, the suit said, doctors were asked to serve as a Merck representative training consultant and to evaluate the sales message of Merck sales reps. In return, Merck paid each physician a $500 honorarium for the training and consultative services, Friday and Saturday nights' lodging expenses and an additional $100 for incidental expenses.


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