In South Jersey, you can’t drive a few miles at most without seeing a drug store – CVS, Walgreens, and Rite Aid – on the corner. Every food store, Big Box store and discount department store entice shoppers with low-cost generic prescription programs. But for some families dealing with major or rare illnesses, there’s only one place to shop – in many cases, literally – for important, life-saving medications.
Specialty pharmacies are a multi-billion dollar business in the United States. According to a NY Times report, specialty pharmacy sales were estimated at $78 billion in 2014 – up front $20 billion in 2005. Now, the article says, specialty meds “account for one-third of all spending on drugs in the United States, up from 19 percent in 2004 and heading toward 50 percent in the next 10 years.”
Health plans that allow patients to use specialty pharmacies allow little margin for error. Patients have one specialty pharmacy they are allowed to use based on their particular health insurance plan.
The reason for the gain in popularity for specialty pharmacies? It’s two-fold. These companies say they will save health plans money because with stringent policies about renewals, patients are taught to not waste the medications. Compliance is up, too, the companies say.
But, it’s the second reason that has the Feds sitting up and taking notice, some pharmaceutical companies are cherry-picking with specialty pharmacies are permitted to sell their products. The pharmacies that offer more choices will obviously be more of a benefit to customers. This gives a pharmacy incentive to buddy up with Big Pharma to make sure they get access to some of the most popular, expensive drugs.
Additionally, this opens the door for drug makers to offer incentives right back to the specialty pharmacies. For example, a $3.3 billion whistleblower lawsuit is currently pending against Novartis. The US government alleges that the company paid specialty pharmacies to either keep patients on certain Novartis drugs or get them to switch from a non-Novartis medication to one made by the company. This behavior may very well be a violation of the Anti-Kickback Law, part of the False Claims Act.
Novartis is fighting those charges, instead insisting that any kickbacks paid to the specialty pharmacies were to encourage better patient compliance with taking medications. According to the NY Times article, Novartis says “doctors, not the pharmacies, decide which drugs patients should get and how long they should take them.”
Except that it doesn’t seem to always work out that way. Simply put, if your health insurance only allows you to use one particular specialty pharmacy, and that pharmacy doesn’t dispense the medicine you need, your physician will be forced to write a prescription for another option.
It seems that, in the end, there is a lot of money and plenty of talk of incentives and kickbacks flying around while good families struggle to make sure they have the critically important medicines their loved ones need. If federal prosecutors win the day in the Novartis whistle-blower lawsuit, it may send an important message to the industry: more emphasis needs to be placed on the fact that medicine should be about healthcare and saving lives, not only Big Pharma’s bottom line.
Cases like this one come to the attention of authorities because of people who decide to do what’s right and “blow the whistle” when they learn information about unscrupulous business activity. If you or someone you know believes you have credible evidence about fraudulent activity being committed against the US government, you may have a qui tam claim. Contact the experienced whistleblower lawyers at Begelman & Orlow today for a consultation about your case.