by Dr.Harald Wiesendanger– Klartext
What the mainstream media is hiding
“You increase my profit, and in return, I share it with you”: No form of corruption is more widespread, including in medicine. This principle is called “kickback.” Doctors who allow themselves to be bribed in this way wreak havoc in healthcare.
The so-called “kickback” scam is alarmingly widespread. Hidden sales bonuses and commissions flow here. It is considered the most important form of medical corruption. Kickbacks aren’t limited to prescriptions—they can happen with medical services of any kind. A general practitioner or an orthopaedist refers his patient to an MRI. He expressly recommends a specific radiologist – not because he is convinced of their outstanding skills, but to secure a financial advantage. The recommended person shows his gratitude by paying part of his fee back to the referrer. “A radiologist friend of mine,” Frankfurt surgeon Bernd Hontschik recalls, “told me how orthopedic surgeons demand a kickback of 100 euros from him for each MRI referral; otherwise, the patients would have to go to another radiologist, who would pay accordingly. Daily practice.” (1)
It is not always only money that flows; kickbacks can also include benefits in kind. An ophthalmologist refers a cataract sufferer to a designated ophthalmic center for surgery. In return, he is given state-of-the-art practice equipment, free of charge or for a symbolic amount. (2)
Bounties and sales bonuses for surgeons who prefer the products of a specific medical device manufacturer for implants are common. At the end of 2018, the Osnabrück public prosecutor’s office brought charges against the former head of the department for spinal surgery at the Klinikum Leer: He preferred to use implants from a particular manufacturer – including intervertebral disc prostheses that wandered around in the patient’s body, crumbled and caused severe pain. In return, the company gave the crafty surgeon a percentage of the product’s sales; between 2011 and 2016, the payments are said to have amounted to more than 128,000 euros. (3)
And, of course, it pays off for doctors to prescribe certain medications particularly frequently. They usually get handsome commissions from pharmaceutical companies for this – between three and eight percent of the price, as an insider reveals. (4) Or they rake in lucrative “consultant” contracts, collect generous lecture fees, and rake in tickets for expensive events. Top scribblers are treated to luxurious vacations.
Well-organized doctor networks, including many individual and group practices, achieve high remuneration. As the Swiss consumer magazine “Saldo” revealed in the summer of 2013, the Medix-Ärzteverbund Aargau, for example, used generic cholesterol-lowering drugs from the company Spirig Healthcare, antidepressants or blood pressure medication from the company Actavis and remedies for heartburn from Sandoz. The patients do not learn anything about these limitations. They don’t even know that up to 25 percent of the price they pay in the pharmacy flows back to the doctor’s network – as a kind of reward for the prescriptions. “This is not an isolated case,” the editors stated. According to her research, “many doctors’ networks have entered into a contract with pharmaceutical companies to give certain preparations to patients in the family doctor model. In return, the networks get the drugs cheaper – but the patients pay the same amount.” The generics manufacturer Actavis confirmed “Saldo” that it grants networks discounts of up to 45 percent on the manufacturer’s price. According to pharmaceutical insiders, “discounts of up to 80 percent are even possible. None of the parties involved wanted to disclose their contract upon request.” (5)
Legal hassles? Accepted with a shrug.
There is hardly a large pharmaceutical company that has not already gotten into legal trouble because of such bribery practices. In November 2013, they cost Johnson&Johnson at least 2.2 billion US dollars; the group had awarded doctors for prescribing the antipsychotic Risperdal to children with dementia and ADHD. Abbott shelled out $1.5 billion for an off-label marketing campaign for the anti-epileptic drug Depakoke (valproate) that involved plenty of kickbacks; every tenth woman who took a preparation containing valproic acid during pregnancy gave birth to a malformed child, and 30 to 40 percent developed severe developmental disorders. (6) In 2015, Bristol-Myers Squibb agreed to pay more than $14 million to settle allegations that the company bribed government hospitals in China to prescribe drugs. (7)
In March 2016, Teva Pharmaceuticals paid the US Department of Justice a $27 million fine for “rewarding” a Chicago psychiatrist for prescribing the neuroleptic clozapine in more than 30 nursing homes – on more than 50,000 prescriptions. That same year, Teva negotiated the highest fine ever imposed on a pharmaceutical company – and the fourth-highest settlement in any industry – for violating US corruption law, the Foreign Corrupt Practices Act (FCPA). The company agreed with the US Department of Justice and the US Securities and Exchange Commission to continue prosecution for a payment of US$519 million. He had been accused of violating the FCPA in Ukraine, Mexico, and Russia. (8th)
In 2015, Novartis agreed to a $390 million fine for kickbacks in favor of its immunosuppressant drug Myfortic, among other things. (9) The Swiss pharmaceutical multinational had bribed pharmacists in the USA to recommend certain drugs to their customers.
In the spring of 2019, Jazz Pharmaceuticals, Lundbeck, and Alexion hit it: (10) A total of $122.6 million in kickbacks to drugs for narcolepsy, Huntington’s disease, paroxysmal nocturnal hemoglobinuria (PNH) — a rare blood-forming stem cell disorder — and that Atypical haemolytic uremic syndrome (aHUS), in which blood clots form throughout the body, affecting blood flow to vital organs.
Fines in the billions: Peanuts, measured by criminal turnover
The record holder is Pfizer, with no fewer than 34 legal settlements, including for kickbacks, since 1991 – including fines of $4.7 billion and $2.3 billion. (11)
“The violations of the law,” denounces the Danish physician and pharmaceutical critic Peter C. Gøtzsche, are so widespread, frequent, and diverse that only one conclusion can be drawn: they are committed intentionally because crimes pay off. The companies regard the penalties as business expenses and continue their illegal activities as if nothing happened.” (12). Many criminal offenses would be impossible if doctors did not play along.
Hard to believe, but true: At least 30 percent of all German acute care hospitals have kickback contracts. (13) Nursing homes, pharmacies, foundations and patient organizations, and sometimes even government agencies, also get kickbacks. In 2012, Pfizer stole $45 million for bribing authorities in Bulgaria, China, Croatia, the Czech Republic, Italy, Kazakhstan, Russia, and Serbia. (14) Novartis paid $25 million in March 2016 after the US Securities and Exchange Commission accused it of bribing Chinese healthcare workers to promote sales.
In the spring of 2019, Amgen and Astellas Pharma stole almost 125 million US dollars. They had made “donations” to two foundations that were actually kickbacks in disguise. In return, the “non-profit” institutions should persuade patients with prostate cancer or with secondary hyperparathyroidism – a hormone disorder resulting from kidney failure – to exclusively resort to the “Xtandi” or “Sensipar” drugs. (15)
In late 2018, Actelion Pharmaceuticals – acquired by Johnson & Johnson in 2017 – agreed to pay $360 million. The company had given generous donations to a non-profit aid organization, the “Caring Voice Coalition” – motto: “We improve the lives of those with chronic illnesses” (16). However, the funds flowed earmarked. They were only intended to benefit patients who used Actelion medicines, including the blockbuster Tracleer, a drug for pulmonary hypertension (PAH), which causes blood pressure in the lungs to rise dangerously. Price increases in 2014 and 2015, which exceeded inflation by 30 times, had made Tracleer tablets a real treasure: 60 pills now cost 14,500 US dollars. (17)
Such “pseudo-non-profit associations that have nothing to do except collect ‘donations’ from providers for users, who in turn are allowed to bill this application privately,” have been driving Thomas Fischer, a federal judge in Karlsruhe, for a long time. (18)
In August 2016, Novartis came into the crosshairs of Turkish authorities after an anonymous whistleblower alleged that Novartis had obtained US$85 million in business benefits by paying bribes to state hospitals. These allegations have not been substantiated to date, but they have not been refuted either. (19) Also, in August 2016, six former and current Novartis employees were charged in South Korea with offering doctors “discounts” to boost drug sales. The investigation ended in April 2017 with a $48.3 million criminal conviction.
In November 2010, Omnicare admitted it paid two nursing homes $19.8 million to offer and use its drugs. (20) Merck was fined $950 million in 2011 for kickbacks. (21)
To cover tracks, kickbacks often flow from slush funds. Money is secretly paid out in cash – or, well hidden from the tax authorities, transferred to private accounts abroad.
Unencumbered by any sense of injustice
Physicians who routinely collect such reimbursements generally lack any sense of wrongdoing. After all, they play down, both sides benefit, the obliging service provider as well as the one who shows his gratitude. And there is no financial disadvantage for the patient concerned.
Of course, more and more courts see things differently: they see kickbacks as forbidden enrichment and the granting of advantages, which is why patients do not receive the best possible therapy, but rather the one that pays the most for their doctor. Because this therapy usually causes higher costs, the health insurance companies incur considerable damage and, ultimately, the solidarity of the contributors. There is also the risk of unnecessary examinations and treatments – just so that premiums flow.
“Kick-Backer”: outrageous cost drivers
For years, nowhere in Switzerland were there higher laboratory fees per insured person than in the canton of Geneva: they were around 70 percent higher than the canton with the second highest laboratory costs, six times the cheapest. As the Neue Zürcher Zeitung researched, kickback payments played a key role. A doctor from Geneva, for example, had undertaken to ensure that a specific laboratory could bill the health insurers for services amounting to 166,000 francs a year. He received ten percent of it in return, plus an advance of CHF 50,000 to rebuild his practice.
Medical professional law prohibits kickbacks; According to Section 31 of the Professional Code, they violate the principle of free choice of doctor and often also the principle of cost-effectiveness. The Federal Court of Justice evaluates them as fraud.
Hypocritical outrage
The growing indignation about kickback practices, mainly when politicians express them, seems quite hypocritical to Bernd Hontschik: “Economically, hospitals have their backs to the wall. Doctors, nursing staff, and all employees work under almost unbearable pressure to succeed. Head physicians are tempted with bonus payments to increase the number of treatments. Catch bonuses are just a tiny particle on the edge of this struggle for survival. You can’t want to destroy a social system and convert it into an economic sector but then howl loudly when it’s the same as in the economy there.” (22)
(Harald Wiesendanger)
Remarks
1 Frankfurter Rundschau, 29.5.2012: „Treuepunkte für den Arzt“, www.fr.de/wissen/treuepunkte-arzt-11358180.html, abgerufen am 16.5.2019.
2 Siehe ZWP online, 16.9.2011: „Verhängnisvolle Kick-Back-Vereinbarungen“, „Fall 4“, www.zwp-online.info/zwpnews/wirtschaft-und-recht/recht/verhaengnisvolle-kick-back-vereinbarungen, abgerufen am 16.5.2019.
3 Süddeutsche Zeitung, 11.12.2018, S. 20: „Anklage gegen Chirurgen“.
4 www.cbgnetwork.org/5731.html, abgerufen am 16.5.2019.
5 Saldo 13/2013: „Pharmafirmen belohnen Ärzte und Apotheker – den Preis bezahlen die Patienten“, www.saldo.ch/artikel/d/pharmafirmen-belohnen-aerzte-und-apotheker-den-preis-bezahlen-die-patienten, abgerufen am 16.5.2019.
6 Salvatore Saporito: „Bestechungsvorwürfe gegen Novartis verdeutlichen Compliance-Risiken im Pharmasektor“, LexisNexis, 12.6.2017; www.justice.gov/opa/pr/abbott-labs-pay-15-billion-resolve-criminal-civil-investigations-label-promotion-depakote, abgerufen am 16.5.2019.
7 www.lexisnexis.de/blog/compliance/korruptionsvorwuerfe-gegen-novartis, abgerufen am 16.5.2019.
8 Nach Saporito, a.a.O.
9 Chemistry World, 9.1.2015: „Pharma kickback claims lead to individual prosecutions“, https://www.chemistryworld.com/news/pharma-kickback-claims-lead-to-individual-prosecutions/9137.article, abgerufen am 16.5.2019.
10 Pharmaceutical Business Review, 5.4.2019: “Three pharma firms agree to pay $122.6m to settle kickback allegations “, www.pharmaceutical-business-review.com/news/three-pharma-kickback-allegations; www.marketwatch.com/story/jazz-pharma-alexion-and-lundbeck-to-pay-1226-million-to-resolve-kickback-allegations-2019-04-04; abgerufen am 16.5.2019.
11 Gardiner Harris: “Pfizer Pays $2.3 Billion to Settle Marketing Case “, NewYorkTimes,’ 2.9.2009, www.nytimes.com/2009/09/03/business/03health.html., siehe www.oxfam. de/system/files/oxfam_prescription_for_poverty_full_report_090518.pdf, S. 49.
12 Peter C. Gøtzsche: Tödliche Medizin und organisierte Kriminalität, München 2. Aufl. 2015, S. 77.
13 www.arzt-wirtschaft.de/verbotene-verlockungen-kickback-zahlungen-an-aerzte/, abgerufen am 16.5.2019.
14 “Pfizer Settles US Charges of Bribing Doctors Abroad, “New York Times, 7.8.2012, www.nytimes.com/2012/08/08/business/pfizer-settles-us-charges-of-overseas-bribery.html; SEC complaint to US District Court, District of Columbia: US Securities and Exchange Commission vs. Pfizer Inc., www.sec.gov/litigation/complaints/2012/comp-pr2012-152-pfizer.pdf, s. Oxfam, a.a.O., S. 49.
15 European Pharmaceutical Rebiew, 2.5.2019: “Amgen and Astellas Pharma US agree to settlement costs for kickback charges “, www.europeanpharmaceuticalreview.com/news/86976/ amgen-and-astellas-pharma-us-agree-to-settlement-costs-for-kickback-charges, abgerufen am 16.5.2019.
16 www.caringvoice.org/
17 New York Times, 6.12.2018: “Drug Maker Pays $360 Million to Settle Investigation Into Charity Kickbacks “, www.nytimes.com/2018/12/06/health/actelion-johnson-and-johnson-kickback-medicare.html, abgerufen am 16.5.2019.
18 Thomas Fischer: „Nieder mit der Ärzte-Korruption“, Zeit online, 4.8.2015, https://www.bdnc.de/fileadmin/Media/bdnc/pdf/meldungen/20150804_Kolumne_Die%20Zeit_aerzte-bestechung-korruption-pharmaindustrie.pdf.
19 Nach Saporito, a.a.O.
20 Medslawsuit: “What is a Pharmaceutical Kickback? “, https://medslawsuit.com/frauds/ what-is-a-pharmaceutical-kickback/, abgerufen am 19.5.2019.
21 David Ingram/Ros Krasny: “Johnson&Johnson to Pay $2.2 Billion to End US Drug Probes “, Reuters, 4.11.2013, www.reuters.com/article/us-jnj-settlement/johnson-johnson-to-pay-2-2-billion-to-end-u-s-drug-probes-idUSBRE9A30MM20131104; Michael S. Schmidt/Katie Thomas: “Abbott Settles Marketing Lawsuit “, New York Times, 7.5.2012, www.nytimes.com/ 2012/05/08/business/abbott-to-pay-1-6-billion-over-illegal-marketing.html; Duff Wilson: “Merck to Pay $950 Million over Vioxx “, New York Times, 22.11.2011.
22 Hontschik in Frankfurter Rundschau, a.a.O.
This text is part of a series of articles with the following additional contributions:
1) Trained demigods – How doctors become drug dealers
2) Visit from the Rep – Mendacious Friendship based on the script
4) Off label – crossing borders as routine
5) Purchased Observer – When the doctor becomes the “researcher.”
6) How easy – When doctors play “Kickback.”
7) “As you do to me, so do you” – reciprocity as the secret of success
8) Softened – education and training as brainwashing
9) Insatiable Renters – The uncanny power of paid opinion leaders
10) Among Gorillas – Silverbacks call the shots
11) As KOL to the Golden Nose – Why “Key Opinion Leaders” have taken care of it
Kickback, Corruption, Reimbursement, Harald Wiesendanger