Lawsuit Alleges Eli Lilly Used Kickbacks to Increase Use of Its Insulin Products

A recently unsealed lawsuit, filed in June 2017 by the research organization Health Choice Alliance and 30 states plus the District of Columbia, alleges that drug maker Eli Lilly illegally worked with Healthstar Communications and VMS Biomarketing to provide free nursing services to induce healthcare providers to prescribe the drug maker’s insulin products Humalog and Humulin (as well as the company’s osteoporosis drug Forteo).

The lawsuit also targets the contract research organization Covance and a unit of the pharmacy benefit manager Express Scripts, alleging that the 2 companies contributed to the scheme by helping prescribers to receive reimbursement.

The suit charges that, while supposedly providing independent medical advice and disease-awareness information, the nurse educators were, in reality, acting as sales representatives for Lilly, referring Lilly products to prescribers and patients and “enriching [the company] at the expense of the government.” The 3 drugs that were part of the alleged scheme were among Lilly’s top 5 products in 2016, together generating more than $5.5 billion in 2016 sales.

The Lilly case is a whistleblower suit that was filed on behalf of federal and state governments by a unit of the research organization National Healthcare Analysis Group, which said it believes the alleged Lilly scheme goes back to 2006 and netted billions of dollars in improper reimbursements. The group is alleging violations of the False Claims Act and the federal anti-kickback statute, and seeks damages for those violations.

Eli Lilly has not commented on the lawsuit, but Express Script disclosed the legal action, and said that the company believed itself and its subsidiaries to be in “substantial compliance with applicable laws, rules and regulations in all material respects,” and indicated that it plans to vigorously defend itself. In October 2017, the same unit of Express Scripts was named in a lawsuit filed by plaintiffs representing Medicare Advantage Organizations over an 85,000% increase in prices of adrenocorticotropic hormone (H.P. Acthar Gel) since 2001

Other pharma companies have faced charges of a similar nature. Novo Nordisk settled a lawsuit in May 2017 that alleged that certified diabetes educators induced prescribers to use Novo Nordisk drugs by offering educational programs and materials. Novo Nordisk denied the allegations. Allergan paid $13 million in a 2009 settlement that alleged that the company illegally promoted eye drugs by promoting consulting and other services to prescribers.

Other whistleblower suits alleging false claims and anti-kickback violations against Amgen, AmerisourceBergen, Bayer, and Gilead Sciences were just unsealed and are parties in the cases are in the process of being served, according to Barron’s.