Lupron Kickbacks Betrayed Prostate Cancer Patient Trust

New York, NY, February 27, 2001. In 1998 prostate cancer activists mounted a campaign against Medicare's surcharge on the testosterone-blocking castration drug Lupron. Medicare does not cover prescription drugs taken at home. But because Lupron and its rival Zoladex are usually injected in the doctor's office, by a nurse, they are covered.

Both drugs are sold at a high price. Although Lupron (made by TAP) costs more than Zoladex (made by Astra-Zeneca), many more patients are on Lupron.

In 1998 Medicare began to take action against the higher price of Lupron. In several states, Medicare extended its Least Costly Alternative policy to prescription drugs and withheld full reimbursement from prostate cancer patients who took Lupron. Medicare continued to pay in full for Zoladex, which for a monthly shot costs about $125 per month less.

Many patients taking Lupron on the advice of their doctors felt Medicare's move was outrageously unfair. "Medicare is putting its own cost-cutting ahead of the well-being of the patient," patient-activist Harry Pinchot said in November 1998.

Both of these monthly or three-monthly depot drugs are delivered by large-needle injection. Lupron is injected in muscle in the buttock; Zoladex uses a bigger needle into in a more sensitive spot, the abdomen. The drugs have similar efficacy profiles, but if one injection hurts more than the other -- normally that should be enough to justify a patient preference. Men with a notoriously painful cancer, many patients said, should not be forced to pay a surcharge to avoid unnecessary pain and discomfort.

Medicare officials at inquiry meetings were unsympathetic. Pinchot said his comments about pain from the bigger needle were met with smirks and eye-rolling.

While activist patients championed patients' choice and attacked what they took as a Medicare assault on the doctor-patient relationship, something different was happening behind the scenes. Federal prosecutors, in an undercover criminal investigation, found evidence that the makers of Lupron - and hundreds of doctors that the company recruited - were ripping off taxpayers and patients alike.

In cases filed against urologists in Indiana, Florida and Connecticut prosecutors charged them with conspiring with a drug company to gain excess payments from Medicare for prescriptions of Lupron used to treat prostate cancer.

As Melody Peterson reported February 20 in the New York Times, the drug maker is identified in court papers as Company X. Everyone knows, though, Lupron is made by TAP Pharmaceutical Products. TAP, short for for Takeda Abbott Pharmaceuticals, is a joint venture of Abbott Laboratories in Illinois and Takeda Chemical Industries in Japan. February 13, a company spokesman in Japan said "We cannot comment about TAP which is still under investigation by the Justice Department which began its investigation into TAP in December 1997."

Federal prosecutors charge that in the summer of 1995 the company offered Bristol, CT urologist Joseph A. Spinella a deal. If he would switch all his prostate-cancer patients from Zoladex to Lupron, he could extract as much as $7,000 extra a year from Medicare. Prosecutors say the company set Spinella up with free samples, which he also charged to the federal government.

Dr. Spinella, Hartford Courant reporter Matthew Kauffman wrote February 21, is charged with taking a bribe by conspiring to receive kickbacks. "'Dr. Spinella switched the drug he injected into his prostate-cancer patients so that he could make more money,' said Donald K. Stern, U.S. Attorney for the District of Massachusetts, where the indictment was issued on Dec. 8. 'He did this by getting free samples as kickbacks and then billing his patients and third-party payers, such as Medicare.'"

Another urologist, Dr. Jacob Zamstein of Bloomfield, CT, is accused of accepting more than 100 free samples of Lupron and then billing patients and insurers as much as $550 for each dose, netting a profit of more than $30,000.

In addition to offering doctors "billable" free sample handouts, prosecutors say, the company gave the federal government an inflated wholesale price for Lupron, then sold the drug to hundreds of doctors at a far lower price. On billing Medicare, the doctors could expect to get $100 or more in illicit profits on every shot.

Some patient advocates worry that managed care and Medicare might try to push prostate cancer patients off these drugs back to surgical castration (orchiectomy). Patient concern about this issue is stark. The surgery is irreversible. This forecloses the option of intermittent hormonal therapy and for some feels like a shutting down of hope.

TAP has sponsored startups of prostate cancer patient organizations like National Prostate Cancer Coalition and its state branches. TAP also sponsors a New York City road race against prostate cancer.

Now, however, patients can see -- while their activists were fighting Medicare on behalf of Lupron and the patient-doctor relationship, Company X was bribing urologists so as to grab market share. Company X encouraged doctors to taint and betray the patient-doctor relationship.

The fraud investigation found evidence that TAP pitched Lupron to urologists as a money-maker compared to the surgery. According to the Chicago Tribune in May 1999, salespeople for TAP told doctors that ultimately they would make more off each patient by trading surgery for the Lupron shot, each of which pulls in a profit of $100 plus per month.

TAP representatives "'would lay it all out,'" urologist Dr. P.W. Kinder, a South Carolina urologist, told the Chicago Tribune. "'They had it all documented, how much money it would mean to your practice,' Kinder said. 'Their point was, why make $500 or something like that on [surgery] when you could be making $1,200 a year. ... It means a very significant adjunct to somebody's income.'"

The company is negotiating a settlement of hundreds of millions of dollars.

Reuters says that the amount is "close to $840 million, which was the record settlement that hospital chain HCA (NYSE:HCA - news) paid last year in a health-care fraud investigation."