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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.

What else you need to know
The U.S. Department of Justice has cleared the pending merger between Cigna and Express Scripts. Cigna said the companies have also obtained clearance from insurance regulators in 16 states, and that they are “working constructively” with regulators in the remaining states. “The value that we deliver together will help put our society on a far more sustainable path—one that helps health care professionals close gaps in care and supports our customers along their health journey,” said Cigna President and CEO David Cordani. The companies expect the deal to close by year-end. More here.

CMS has proposed a rule to remove “unnecessary, obsolete or excessively burdensome Medicare compliance requirements” for hospitals and other health care facilities. The agency said the updates would save health care providers $1.12 billion annually. “The changes we’re proposing will dramatically reduce the amount of time and resources that health care facilities have to spend on CMS-mandated compliance activities that do not improve the quality of care, so that hospitals and health care professionals can focus on their primary mission: treating patients,” said CMS Administrator Seema Verma. More here.

Einstein Healthcare Network and Jefferson Health entered into a definitive agreement to merge, affirming a letter of intent the organizations signed in March. In a press release, Einstein and Jefferson said the new entity would have the largest number of medical residents and fellows in the Greater Philadelphia area. The merger is subject to regulatory approval and customary closing conditions. More here.

In collaboration with Amazon Web Services, Merck and Accenture announced that they are launching a cloud-based informatics research platform. The new platform will create open, industry-standard application programming interfaces for core research functions. “The platform will allow life sciences researchers and informatics professionals to quickly aggregate, access and analyze research data from multiple applications,” the companies said. More here.

Ascension’s TriMedx signed a definitive agreement to acquire Aramark’s health care technology business for $300 million. TriMedx provides medical equipment management programs to more than 1,800 providers, including all of St. Louis-based Ascension’s health care facilities. Aramark provides similar services to about 500 health care providers nationwide. The deal is expected to close by the end of the year. More here.

What we’re reading
How Innovative Partnerships Are Changing Health Care Delivery. Sloan Management Review 9.20.18 (subscription required, article available for purchase)
Physician Burnout—A Serious Symptom, But of What? JAMA 9.18.19 (subscription required)
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