1 (888) 402-3465

Our Take: AbbVie Sued by California Insurance Regulator, Alleging Kickbacks

Sep 24, 2018

California Insurance Commissioner Dave Jones filed suit against AbbVie, alleging that the drugmaker gave illegal kickbacks to physicians to prescribe Humira (adalimubab). In court filings, the state alleges that AbbVie “systematically and repeatedly has violated the Insurance Frauds Prevention Act by providing kickbacks to health care providers throughout California.” The case is supported in part through documentation provided by Lazaro Suarez, a registered nurse who worked for AbbVie via its subcontractor, Quintiles Transactional Holdings.

Humira is the world’s best-selling prescription drug, with $18.43 billion in sales in 2017.

Our Take: Regardless of what AbbVie did or did not do, or whether the company is guilty of breaking any laws, this case is important for pharma to pay close attention to.

At issue is AbbVie’s use of nurse “ambassadors” who are assigned to patients prescribed Humira, AbbVie’s blockbuster biologic for rheumatoid arthritis, Crohn’s disease and eight other indications. These ambassadors provide patient care, pharmacy and insurance authorization assistance, help with paperwork and other services.

Pharmaceutical companies such as Merck and Bristol-Myers Squibb have been providing grants to fund nurse navigator programs for years. They provide real value for patients and, by extension, physician practices and hospitals. But these are arm’s length transactions, offered under unrestricted grants, and are often deployed in resource-strapped communities. The navigators serve a more general role and are not tied to any one product or company.

In AbbVie’s case, the suit alleges, the ambassadors were exclusively linked with patients who received Humira. Court documents further state that the information provided to patients was unbalanced, downplaying the risks and “trained to tout the good” of Humira therapy.

Moreover, if some of the other allegations in the suit prove true—paying for gifts, trips and patient referrals—AbbVie is really in hot water. We’ll just have to see how the suit plays out.

In a post-ACA world where we’re all trying to extract more value from our health care dollar, pharma too is looking for novel ways to add value to what it’s offering. An ambassador or navigator-like program may be an in-kind gift, but it has the potential to improve patient care and reduce costs elsewhere throughout the continuum of care.

A cynic might say (and we hear this all the time in executive interviews) that pharma can increase its value today, right now, by lowering prices. We’re not going to touch on that debate—how it takes many billions of dollars to bring a drug to market, the return on investment and the like. As an industry, pharma has tried to justify its pricing practices, but hasn’t made that argument effectively with consumers and policymakers.

As Congress, HHS and other constituents debate updating the Stark Law to allow for tighter relationships among providers, these kinds of pharma initiatives should be in the conversation as well. If pharma wants to provide meaningful services to providers and patients beyond the prescription, it should be able to do so ethically and legally. The rules of the road in the age of value-based care need to be clearly spelled out so that there is no confusion as to what’s acceptable—and what isn’t.

 

share

Request a Call from Darwin Research Group and we will get right back to you.