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Hoffmann-LaRoche Settle Claims of Paying Physicians to Research Drug

September 2, 1994

WASHINGTON (AP) _ Hoffmann-LaRoche Inc. has agreed to pay $450,000 to settle claims that it paid physicians to boost sales of an antibiotic, the Department of Health and Human Services’ inspector general said Friday.

The Nutley, N.J.-based drug company denied any liability, but agreed to the settlement with HHS and the Justice Department.

The settlement is the latest in a series of moves by government agencies against drug company promotions considered unethical or illegal.

Last week, the inspector general issued a special fraud alert warning that some of the promotions may violate the law against kickbacks in Medicare and Medicaid.

The inspector general’s office said that from 1986 to 1991, Hoffmann- LaRoche paid grants of $500 to $2,500 to physicians for performing small- scale studies on Rocephin, a once-a-day intravenous antibiotic for serious infections.

The research requirements in many cases were minimal and of no scientific value, consisting of ″an anecdotal report of the physician’s impressions of the drug,″ according to the federal agency.

″Many physicians were selected for the program based on their ability to recommend Hoffmann-LaRoche’s products to other physicians or because they were in the position to include Hoffmann-LaRoche’s drugs on the hospital formulary″ or buying list, the agency said.

Some got full payment even though they never completed the research, it said.

The Justice Department earlier had declined to prosecute Hoffmann-LaRoche on criminal charges in the Rocephin promotion. The settlement was negotiated by the civil division of Justice and the HHS’ inspector general.

The inspector general said the company also has instituted a corporate integrity program to ensure that its employees adhere to high ethical standards.

Diane Donlon, a spokeswoman for Hoffmann-LaRoche, said the company gave stipends to several hundred physicians to help educate them about the appropriate use of Rocephin.

When it began marketing Rocephin in 1985, ″it was clear that many physicians and pharmacists were unfamiliar with a once-a-day dosing regimen,″ she said.

She said there was ″no admission of liability, wrongdoing or fault″ on the company’s part and called the settlement ″a compromise ... to avoid the expense and inconvenience of protracted litigation.″

The fraud alert cited other dubious promotions.

One company, Ayerst Laboratories, awarded physicians points toward free airline tickets for filling out questionnaires after placing new patients on an Ayerst drug. Ayerst agreed on July 29 to pay the government $830,000 to settle claims it caused false Medicaid claims to be submitted in that case.

The inspector general is still investigating a program by Miles Inc. that paid pharmacists a $35 fee when they got patients to switch to a Miles hypertension drug, Adelat CC, from a rival medication. Last April, Miles agreed to pay a total of $605,000 to settle civil fraud claims by 11 state attorneys general over such switches.

June Gibbs Brown, the HHS inspector general, said in a statement, ″We all know that there is no free lunch in American business. When a drug manufacturer gives its prescribing physicians airline tickets and golf weekends at plush resorts, someone has to pay for these gifts. And that someone is the average American citizen.″

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