Really Creative Marketing

I have to hand it to the marketing department of Amgen: it's filled with geniuses. The pharmaceutical company found a way to hide kickbacks to medical providers and even showed the doctors, clinics, and hospitals how to make a little extra money billing Medicare and Medicaid. The only problem is that some state governments finally caught on to the scam:

New York, California and 13 other states are accusing biotech giant Amgen Inc. of offering kickbacks to medical providers to boost sales across the country of its anemia drug Aranesp, which increasingly has been beset by safety concerns.

In a suit filed Friday in federal court in Massachusetts, the states accuse Amgen sales representatives of encouraging doctors and other healthcare providers to bill insurers for Aranesp that the practitioners received free from the company, according to a statement issued by New York Atty. Gen. Andrew Cuomo.

The practice, which the suit contends was known to Amgen's upper management, allegedly cost taxpayer-funded Medicaid programs and other insurers millions of dollars in overpayments.

Here's how the scam works. The drug in question (Aranesp) is usually sold in single dose vials. It's industry practice to add a little extra in each single dose vial for safety reasons. That's called "overfill." Well, Amgen added way more than the industry standard to each vial, which meant there was a lot left over in the vial. Doctors were shown how to collect the overage for the next dose. The overfill was free, but now the doctor (or clinic) could sell it, i.e., bill the insurance company or government program for what cost the provider nothing. Amgen representatives brought spread sheets along to each sales session to show just how much money could be made. As a result, a whole lot more Aranesp got added to patients' regimens than would normally be required.

"In offering the overfill inducement to medical providers, Amgen's sales force encouraged medical providers to administer higher doses of Aranesp to patients without any clinical need for that higher dose," the states allege. [Emphasis added]

And if that kind of fraud isn't bad enough, there's more:

Anemia drugs have come under increasing fire after a series of studies found that high doses can lead to increased risk of heart attack, stroke, heart failure and tumor growth in some patients. In 2007, the Food and Drug Administration issued a "black-box warning" for Amgen's anemia medications -- the strongest warning possible about potential side affects.

The Associated Press reported late Friday that a new study raised fresh safety concerns about the drugs, finding that Aranesp nearly doubled the risk of stroke in people with diabetes and chronic kidney problems who are not yet sick enough to need dialysis. [Emphasis added]

The slimy medical providers who succumbed to the temptation are just as guilty of the fraud as Amgen. After all, they took an oath to "Do no harm," but tracking them down might take a while. In the mean time, the various states are taking dead aim at the pharmaceutical company. I hope they prevail.

Maybe then the pharmaceutical companies will start spending more on research and less on marketing. And then maybe we'll start getting a hold on the expense part of health care in this country.

For now, I just wish Dante were still alive. I have a few suggestions on an improved architecture for his Inferno.