Ep. G001 – Darshan Kulkarni Transcript

Darshan Kulkarni: I had a recent situation where someone asked me, does legal really need to be on your promotional review team? Couldn’t regulatory do the job for everyone? So I think regulatory is great. However, I think there’s more to promotional review than what regulatory simply covers. Some of the things to think about is are two recent cases that came up. The first is Insys, so Insys is an opioid manufacturer. Recently, they agreed to pay $225 million to settle the federal government’s criminal and civil investigations into the company’s marketing practices. As part of the settlement, Insys therapeutics admitted to bribing doctors to prescribe its opioid painkiller, which was meant to treat pain and adult cancer patients. Five top Insys therapeutics executives are found guilty of racketeering conspiracy by Federal Jury for those same practices. The founder of Insys Therapeutics, John Kapoor, is amongst the highest-ranking pharmaceutical executives to be convicted among amidst this opioid epidemic. Sentencing of this former billionaire is scheduled for September 2019. And this, the Kapoor case is marked as a rare effort by prosecutors to hold individual executives responsible for the opioid epidemic. In the agreement, the drugmaker admitted orchestrating a nationwide scheme in which it set up a sham speaker program. Now it’s important to recognize both the FDA and the Department of Justice are looking at speaker programs. In this specific situation, participating doctors were not paid to give speeches, but to actually write prescriptions of Insys therapeutics, fentanyl-based medication subsys. Often the painkiller was prescribed to patients who did not actually need it. As part of the settlement, the company will end up paying a $2 million fine forfeit $28 million and pay 195 million to settle charges that have defrauded the government under the False Claims Act and Insists spokesperson said that the company may not survive significant financial troubles that attribute it to legal costs. On the other hand, Mallinckrodt Pharmaceuticals announced that the company expects to pay only $15.4 million in a settlement with the U.S. DOJ, the Department of Justice after allegations that Questcor Pharmaceuticals, which Mallinckrodt acquired in 2014 had bribed doctors and their staff to prescribe an incredibly expensive drug. Questcor allegedly boosts the profits of Acthar a medication primarily used for infants with seizures by raising the price of medication by almost a 100,000%. That’s right a 100 thousand percent from just $40 in 2000 to about $40,000. That’s approximately 38,000 from $40 to about $38,892. Despite the fact that Acthar has been in the market since 1952, so there was no actual additional investment required to justify this price hike. So there’s a drug called Synacthen that’s identical to Acthar that sells for just $33 in Canada. So why isn’t it available in the US anymore? So Mallinckrodt bought the U.S. rights to Synacthen and simply doesn’t make it available to American consumers. Mallinckrodt currently rakes in about $1 billion per year from Acthar.

Darshan Kulkarni: Mallinckrodt said it expects to pay the $15.4 million to the DOJ after two whistleblower lawsuits claimed that Questcor inappropriately promoted and bribed doctors to prescribe their popular drug H.P. Acthar Agel. The suits also claimed that Questcor defrauded Medicare by illegally marketing the drug, which is used for treating multiple sclerosis and seizures in children. So Medicare paid about $2.7 billion for the drug from 2011 to 2017. There’s a separate case going on against Mallinckrodt related to the product, where there’s an assertion that the charitable foundation activities were also being were also problematic, shall we say. There’s an allegation that the foundation was used as a conduit to pay illegal kickbacks in the form of co-pay subsidies to market Acthar as free to doctors and patients despite rising the prices. So what should your legal regulatory attorney do to help you save millions and potentially avoid jail time? Your attorney should be reviewing the transaction they should be asking the question, why is this Charitable Foundation here? How is this payment for speaker sessions affecting the doctors going in and actually evaluating if the doctor is actually doing what they’re supposed to be doing? Are these speakers really necessary? Is this payment fair market value? If your doc, if your lawyer understands the regulatory considerations and compliance issues, they’ll hopefully ask additional questions and evaluate whether your proposal Marketing Plan is compliant, or if it raises additional questions, so hopefully it’ll also compare it to the latest DOJ Guide that just came out pretty recently, actually. And that’s a discussion for a totally different day. We should probably have that discussion. But the right questions can save your company and hopefully save you some jail time. If you think your company wants to proactively prevent problems, call me Darshan Kulkarni, your FDA Regulatory Attorney at 215-948-8183, or you can reach me at darshan@conformlaw.com obviously, I don’t represent you until you decide to retain me. Thanks, everyone.

Listen to this podcast, Ep. G001 – Darshan Kulkarni here:https://www.pharma-mkting.com/the-pharma-marketing-podcast/