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Whistleblowers allege drug kickbacks for local doctors

Indiana whistleblowers say some neurologists are getting "kickbacks" for prescribing certain drugs to patients. Is your doctor on the list?
Copaxone is one of the biggest money making drugs on the market for the treatment of multiple sclerosis.

Indiana whistleblowers are exposing alleged healthcare fraud involving a high-stakes pharmaceutical company and local doctors.

The insiders say some neurologists are getting "kickbacks" for prescribing certain drugs to patients.

13 Investigates shows you how it happens, and why it's raising concerns in Washington D.C. and among local patients fighting for their health.

The right drug can make all the difference

"I spend a lot of time on my bike, makes me feel better," said Kurt Lorch of Carmel as he guided his bicycle off the sidewalk and onto the street before hopping on.

"I was diagnosed in 1996," he continued. "I was having a lot of trouble seeing out of my right eye, trouble with my left leg and a lot of difficulty walking," he explained.

Simply put, he was going downhill. Fast.

Just 26 years old when doctors told him he was suffering from Multiple Sclerosis, a chronic, progressive disease causing a lack of muscular coordination, impaired speech and blurred vision.

"I didn't know anybody with MS, so I didn't know what to expect," he recalled.

Now, almost two decades later, if you didn't know Kurt Lorch, you wouldn't know his battle.

13 Investigates spoke with him weeks into training for his second "Race Across America" cycling competition for MS research.

Just a short time earlier, his daughter, a nursing student, swabbed his arm and gave him the injection he now takes three times a week.

"Wonderful," he said, at the ease of the needle stick.

His injection regimen includes one of the biggest money making drugs on the market for the treatment of MS: Copaxone. The drug rakes in $5.5 billion a year for Teva Pharmaceuticals.

Lorch has been taking it for 17 years.

"When I was first diagnosed in 1996, Copaxone wasn't even FDA approved yet, so it wasn't on the market. There were only two drugs on the market at that time. Now there's over 10 drugs on the market," he told 13 Investigates.

And there are more copycats to come. Teva's patent for Copaxone has expired. Now, other drug companies want to produce generic versions and grow their share of the market.

No matter which drug doctors prescribe, Lorch insists patients must come first.

"Copaxone's good for me, it may not be good for somebody else. So you've got to find the drug that works best for you," he said.

But 13 Investigates has learned whistleblowers right here in Indiana are alleging unethical and fraudulent behavior by Teva Pharmaceuticals, the company that makes Copaxone.

Federal whistleblower lawsuit unsealed

According to a federal lawsuit recently unsealed, Teva payed local doctors thousands of dollars in kickbacks to prescribe Copaxone and the drug Azilect for Parkinson's Disease.

Company insiders say Teva was pushing Copaxone to offset the loss of its patent and a projected $550 million loss in sales.

Greg Demske serves as the nation's chief attorney for the Inspector General at Health and Human Services in Washington D.C.

"We take kickbacks very seriously," Demske told 13 Investigates. His team goes after pharmaceutical companies for paying doctors to push their drugs onto patients using Medicare and Medicaid, or other government insurance programs. The government considers such payments false claims.

"The service may have been provided, but it was tainted because it was a kickback that triggered the use of that service," explained Demske.

He says kickbacks defraud taxpayers, distort the competitive playing field and could ultimately harm patients.

"If the physician is receiving money, that may influence the physician to choose to prescribe a drug; and a particular drug even if it may not be in the patient's best interest," Demske said, highlighting the threat to patient care.

The government attorney says the schemes are often hidden in what's called "speaker" or "educational" programs, which are not illegal

The problem comes when the program is used as a cover for kickbacks.

Hidden kickbacks

For example, "Doctor A" presents or educates "Doctor B" about a certain drug. Then "Doctor B" turns right around and educates "Doctor A" on the very same drug during the same meeting. It often happens over a pricey meal, paid for by the drug company.

In addition, both doctors get paid a fee, anywhere from $500-2,500 for sharing information the doctors already knew.

In some cases, Demske found, "People are paid even when no meeting actually ever took place."

The Teva whistleblower lawsuit

Both examples are exactly what's alleged in the Teva case.

While neither of the whistleblowers would speak to us about the lawsuit, 13 Investigates has learned the identities of some of the doctors involved and how much money they allegedly pocketed.

According to the lawsuit, "Dr. D.M.," an Indianapolis neurologist, filed 247 false claims for Copaxone in 2011 at a cost of more than $900,000.

Dr. D.M. was reportedly a Copaxone national speaker.

But in April 2013, another doctor was paid $2,700 for coming to a trendy downtown Indianapolis café to encourage Dr. D.M. to maintain his Copaxone prescriptions and slow down a different one.

Then there's "Dr. C.H.," another Indianapolis neurologist. He was allegedly removed from Teva's speakers bureau in 2012 for insufficient Copaxone prescriptions. Whistleblowers say Teva advised the doctor he would not be given any further speaking opportunities until he increased prescriptions. The first month the doctor reportedly returned to the program, the lawsuit says he wrote new Copaxone scripts.

According to public government documents submitted by Teva itself (as part of a national reporting requirement by the Centers for Medicare and Medicaid Services), the company payed Dr. C.H. more than $18,000 in honorarium, travel and education in 2013.

In Washington, Demske could not provide specifics on the pending Teva lawsuit, but told 13 Investigates "physicians should recognize that this is a risk area for them. It is a big problem. It's historically been a big problem."

Scope of the kickback problem

Kickbacks are such a big problem, the federal government now has "strike forces" going after what it calls fraud "hotspots," according to the Department of Health and Human Services and Department of Justice Health Care Fraud and Abuse Control Program report for 2014.

In 2014, the Inspector General of Health and Human Services saw crime related charges in 800 cases involving Medicaid and Medicare fraud. Cases that involved kickbacks from pharmaceutical companies.

Indiana gets portion of whistleblower settlement funds

In fact, Demske's team just got a $39 million settlement with Daiichi Sankyo. A whistleblower lawsuit claimed the drug manufacturer and doctors cheated Medicare and Medicaid by over-prescribing meds for high blood pressure and cholesterol, in exchange for kickbacks.

As part of the settlement, the drug company admitted no wrong and the State of Indiana received $126,000 back to Medicaid.

"Because of the amount of profit that can be made by the pharmaceutical companies, there is always the potential they're going to provide money or other things of value to physicians to try to influence their decision making," Demske told 13 Investigates.

Patients must advocate for their own health

The likelihood of more kickbacks doesn't sit well with Kurt Lorch, who said he's heard about doctors steering patients toward one drug or another.

"I think it's very important for someone with MS to be their own advocate," he said.

Personal advocacy and research have worked well for him, and Lorch knows he's on an uphill battle against MS.

"There's so many options out there," he reminds fellow patients.

Right now, he's riding steady with a drug right for him. Not something pushed to make someone else a profit.

None of the doctors allegedly involved were willing to speak about the pending whistleblower lawsuit.

13 Investigates chose not to name them because no criminal charges are being filed by the Justice Department. The Inspector General's office says that doesn't mean the case lacks merit, but points out that only 20 percent of its cases are joined by DOJ.

Drug companies found violating federal kickback rules must enter Corporate Integrity Agreements which include government monitoring. (The pharmaceutical companies must self report any other incidents or face fines.)

13 Investigates reached out to Teva regarding the lawsuit. A company vice president said, "We have no comment at this time."

See what drug company payments your doctor received - The database is an informational tool provided by the Centers for Medicare and Medicaid Services. It's an effort to force more transparency into drug company/doctor payments. The government now requires annual reporting from the drug companies themselves on what's paid for education, food and drink, travel and honorarium. 

Note: Being included in this database does not necessarily indicate any wrongdoing.

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