Fool Me Twice? - Boehringer Ingelheim, Medtronic Settle Lawsuits Alleging Deceptive Marketing

It seems like it has been really quiet on the legal settlement front in the US, but maybe corporate executives wanted to wait until things calmed down after the unofficial start of summer to let out news that some people might not think reflected well on them.  So this week it was time to announce two new legal settlements of allegations of bad behavior by corporate health were announced, as we will list in alphabetical order....

Boehringer Ingelheim Settles Suits Alleging it Hid Data About Pradaxa Harms

As per Bloomberg,

Boehringer Ingelheim GmbH, the German family-owned drugmaker, agreed to pay $650 million to settle the majority of lawsuits filed over its blood thinner Pradaxa, which has been linked to more than 500 patient deaths.

The major allegations were about deception,

 Patients and their families alleged Boehringer executives knew Pradaxa posed a deadly risk to some consumers when they brought it to the U.S. market in October 2010.

In particular, as we discussed in more detail in February, 2014,

Documents made public as part of patients’ Pradaxa suits showed Boehringer officials didn’t disclose to U.S. regulators a data analysis that indicated the blood-thinning drug may have caused more fatal bleeding after it was cleared for sale than in a study used to win approval. 

Per the New York Times, Boehringer Ingelheim executives continued to maintain

that it stood behind the safety and efficacy of Pradaxa and continued to believe that the lawsuits lacked merit, but that settling the case allowed the company to move on. 'Time and again, the benefits and safety of Pradaxa have been confirmed,' said Desiree Ralls-Morrison, senior vice president and general counsel of Boehringer Ingelheim USA.

This is typical of most legal settlements involving large health care organizations, whether they end lawsuits brought by private parties or by the US government.  The settlements often allow the parties to continue to disagree, do not establish guilt or innocence, but leave one to wonder why executives would pay so much of admittedly other peoples' money just to "move on" without upholding their or their companies' honor, especially when documents revealed and legal findings made in cases prior to settlement remain unchallenged.

So this settlement also comes after December, 2013, as we discussed here, December, when a judge

ordered Boehringer to pay a $931,000 fine in December for failing to preserve 'countless' files on Pradaxa’s development and marketing. Patients’ lawyers say Boehringer should have placed an effective 'litigation hold' on the documents, forcing employees to preserve them.

(The above per Bloomberg.)  That finding, which the settlement does not dispute, does not fill one with confidence about the openness and transparency of Boehringer Ingelheim managers.

Also the settlement does not refute documents released during this litigation which suggested that Boehringer Ingelheim personnel tried to influence, or manipulate a company sponsored research paper to prevent it from contradicting the company's official marketing message that Pradaxa administration does not require monitoring of patients with blood tests (as we discussed here).    

Note further that this case comes only a few years after a case in which Boehringer Ingelheim settled allegations of deceptive marketing of drugs other than Pradaxa, as we discussed here.

Medtronic Settles Suit Alleging Kickbacks to Physicians

The most extensive and colorful report was in the Minneapolis Star-Tribune,

Medtronic Inc. will pay the U.S. Justice Department $9.9 million to settle a whistleblower lawsuit that accused the company of paying kickbacks to doctors for using its defibrillators and pacemakers.

The alleged kickbacks, according to the newly unsealed suit, included 'gifts of wine and alcohol' and 'trips to strip clubs' paid for by the Fridley-based company. The lawsuit also says Medtronic paid to fly doctors to events in San Francisco, Las Vegas, New Orleans, New York, Minneapolis and other cities that some physicians used as 'a free vacation.'

More colorful details,

The lawsuit, whose details remained secret until Tuesday, describes Medtronic business plans with names such as 'Project Wildfire' that had sales representatives offer 'cash payments, expensive trips and meals, expensive gifts and entertainment to physicians as kickbacks in exchange for the physicians’ agreement to implant Medtronic devices.'

The lawsuit alleged that Medtronic 'funneled millions of dollars in unrestricted grant money to physicians' to get them to encourage the use of Medtronic defibrillators and pacemakers in patients whose 'mild heart failure symptoms did not meet [Food and Drug Administration] criteria for an implantable device.'

Those procedures were not only unnecessary, the suit alleged, but potentially dangerous.

The suit describes payments of thousands of dollars in speaking fees to doctors for attending dinners at which they spoke for only a few minutes, if at all. In other cases, Medtronic allegedly prepared entire presentations that physicians offered almost verbatim.

The suit talks of a plan that 'instructed sales representatives to personally review patient charts in friendly doctor’s offices' and to flag those patients the sales representative 'felt should receive an implant.'

Note that commercially supplied "unrestricted grant money" is now the lifeblood of many ostensibly academic continuing medical education (CME) programs, but this case suggests that corporate executives may believe they are paying such money to get doctors to use their products.  Note further that many physicians defend their receipt of money in payment of talks they have given on behalf of commercial firms as fair payment for providing unbiased education, but this case suggests that corporate executives may believe they are paying such money for marketing, and/or to get the supposedly unbiased physician speakers to use their products. 

Once again, the settlement did not resolve the allegations.

 Medtronic said it did not admit that any of its activities were improper or illegal and that the settlement would bring to a close a long-running review of events dating from 2001 to 2009.

Also,

 Asked to comment specifically on the strip club allegations and the accusation that it financially facilitated unnecessary implantations, Medtronic reiterated that its $9.9 million payment was not an admission that it had done anything illegal or improper.

See my comments above.  Why would executives with even the slightest ability to feel shame not contest such allegations if they were untrue?  But maybe many of today's corporate health care executives are not capable of feeling shame, and of course they get to pay off these lawsuits with other peoples' money.

By the way, this is just one of many Medtronic settlements.  As Bloomberg summarized,

 Medtronic agreed in 2007 to pay about $130 million to settle consumer suits accusing the device maker of hiding defects in its defibrillators. The company agreed to a $268 million settlement of suits in 2010 over allegations that fractured wires in another line of defibrillators caused at least 13 patient deaths.

In fact, Medtronic has provided our blog with lots of material.  We first discussed detailed and vivid allegations that Medtronic had been paying off doctors starting in 2003 here in 2006.  Medtronic has been involved in other lawsuits alleging various kinds of deception.
-  In 2011, it settled for $23.5 million two other federal lawsuits alleging it paid kickbacks to encourage physicians to implant its devices (look here).  
- In 2008, Medtronic subsidiary Kyphon settled a suit for $75 million and signed a corporate integrity agreement for allegations that it defrauded Medicare through a scheme that lead to excessive hospitalization for patients who received the company's spine surgery device (link here)
- In 2006, Medtronic subsidiary Sofamor Danek settled for $40 million allegations that it gave kickbacks to doctors in the form of sham consulting fees and lavish trips (look here).

Yet we are now writing at the end of May, 2014, and Medtronic is still settling lawsuits involving vivid allegations of payoffs to physicians, and its executives are still saying nothing to see here, move on.

Summary

These sorts of cases provide evidence that large health care corporations, including not just pharmaceutical companies, but biotechnology and medical device companies, commonly use deceptive and unethical practices to market their products.  Such marketing lets them charge high, even outrageous prices and sometimes results in patients getting expensive treatments that do them no good, or worse, that do more harm than good.  Some of the executives of these companies doubtless got large bonuses, and may have gotten millions in compensation partially because of the sales generated by these practices.  However, they get to walk away from such lawsuits without any personal accountability, just by paying out a few millions, or billions, of the company's, that is, other peoples' money.  They get do pay that money without any other explanation that it eliminates distractions and allows them to move on (with whatever they have already made).

The more this goes on, the more health care dysfunction continues, and the more the health care oligarchy prospers.  As we have written many times,

penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.  Note that each of the companies discussed above have had their previous ethical lapses discussed in previous Health Care Renewal posts.

The continuing march of settlements, and sometimes criminal convictions involving major health care organizations should be regarded merely as providing a floor to estimates of the extent of bad behavior by large health care organizations. Bad behavior may not be reported, or lead to legal action, and legal action may not lead to settlements or convictions. However, it is amazing how many organizations that were once regarded as exemplary have had to settle, or plead guilty, or been convicted.

When it comes to health care's leadership, society seems to have acceded to defining deviancy down. Until we start holding health care leaders to high standards, expect their organizations not to uphold high standards.

(That version was from 2010, posted here re Medtronic's 2010 settlement. You heard it here first.  Medtronic is still settling, and according to its most recent proxy, from 2013, the annual total compensation of its CEO was last reported to be $8,975,886.)