HIV Drug Companies Staged "Bidding War" Over Kickbacks to Doctors, Suit Says

Last Updated Aug 5, 2011 12:48 PM EDT

HIV drug makers Gilead (GILD), Pfizer (PFE) and its subsidiary Agouron staged an illegal "bidding war" over bribes to doctors in Brooklyn, according to a whistleblower's lawsuit. Prices reached $100,000 per doctor and docs who didn't cooperate by increasing the prescriptions they wrote were described as "unflippable" and dropped from the scheme, former sales rep David Moore alleges.

Gilead denies the allegations and has asked a California federal court to sanction Moore because he allegedly wiped his computer hard drives clean on several occasions -- thus destroying evidence -- before and after filing the whistleblower suit against Gilead. Drug companies -- including Gilead -- are frequently accused of using kickback schemes to promote their products, by paying doctors as consultants or advisers, or giving them excessive honoraria for speaking at educational seminars in which they talk up certain drugs to other doctors.

Moore's complaint is different because it goes a step further: Gilead is an AIDS drug specialist company and as such its drugs -- Atripla or Truvada -- are generally the best, or standard, therapy for HIV, Moore says. When Pfizer and other competitors allegedly started linking their payments to doctors to whether they prescribed products or not, Gilead was forced to make payments of its own just to keep doctors using the standard therapies for AIDS, Moore claims.

The complaint suggests corrupt practices at one company can create instant incentives that force competing companies to respond in kind. Soon, an entire category can become engulfed in expensive, wasteful, unethical and illegal activity. Here's how Gilead was enveloped in the "bidding war":
This "bidding war" was initiated by the companies that are selling drugs that the medical community considers to be "inferior" or "alternatives" to the "preferred" HIV medications. Those companies, which have included pharmaceutical companies Agouron and Pfizer, started paying financial inducements to doctors to persuade them to stray from the standard of care, and prescribe their products even when mandated by the patients' condition.
To counteract the corrupt marketing methods of other HIV/AIDS drug manufacturers, companies with preferred medications, such as Defendant Gilead, have had to pay inducements to persuade doctors to follow the standard of care notwithstanding the payments from the Defendants with non-preferred drugs.

The war soon got out of hand, Moore alleges, as illegal payments to doctors reached an average of $10,000 a year. Doctors with large practices devoted to HIV could command even more. One physician, Dr. Leonard Berkowitz at Brooklyn Hospital, received an "unrestricted educational grant" of $100,000, Moore alleges. In response, Berkowitz called that allegation "absolute nonsense." He said he has sat on a Gilead advisory board every year or two when new information comes out, and fees for that were $1,000. He believes Moore is referring to a grant Gilead gave the hospital, which funds an HIV counselor in the emergency room.

The leverage worked both ways, Moore claims. If "unflippable" doctors didn't increase their prescriptions, Gilead would drop them from the payment list. Moore alleges his supervisor, Cliff Keeling, came under pressure from management because another Brooklyn physician, Dr. Andre Brutus, did not increase his Truvada prescriptions:
Dr. Brutus once had the third largest HIV practice in the country and still has one of the largest practices in the country. Keeling said to Plaintiff: "We're gonna have to cut
programs to him. If he doesn't start moving, I'm gonna get a lot of heat for continuing to use him."
Moore claims that after he filed suit against the company, Gilead illegally retaliated by taking away his job.

Related: Gavel image via Flickr user Thomas Roche, CC 2.0.



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