US Bioservices: More Refills, More Patients

In the US Bioservices Exjade settlement case, the specialty pharmacy agreed to pay $13.4 million to resolve allegations that it accepted patient referrals and other benefits in exchange for increasing Exjade refills. The government’s account connected a manufacturer’s scorecard to a nurse’s conversation with a patient and then to the next prescription the pharmacy received. If you worked with those scores, calls or referral decisions, you may recognize how a sales target reached the clinical side of the business.

The Justice Department’s Southern District of New York office announced the healthcare fraud settlement on August 23, 2017. It credited investigative work and assistance by the Department of Health and Human Services’ Office of Inspector General and the Medicaid Fraud Control Units in New York, Washington and California.

The government alleged violations of the Anti-Kickback Statute and the False Claims Act: US Bioservices was promised more patients and related benefits for refilling a higher percentage of Exjade prescriptions than the other pharmacies. It alleged that thousands of resulting prescriptions generated Medicare and Medicaid claims tainted by kickbacks. US Bioservices also made specific factual admissions about its contract, scorecards, nurse training and referral allocation.

How an Exjade Referral Became Pharmacy Revenue

An Exjade referral carried dispensing business into a small specialty-pharmacy network. Novartis marketed the drug to treat chronic iron overload from blood transfusions. US Bioservices admitted that its December 2005 contract with Novartis made it one of three pharmacies permitted to dispense Exjade through the manufacturer’s Exjade Patient Assistance and Support Services network, known as EPASS. In return, it agreed to provide specialty pharmacy services, including clinical staff who could answer patients’ questions about the drug.

In its November 2015 settlement agreement, Novartis described how that network operated. The other pharmacies were Accredo and BioScrip. Doctors sent prescriptions and patient registration forms to the LASH Group, the vendor administering EPASS for Novartis. Insurance requirements or a physician’s preference directed some prescriptions to a particular pharmacy. Novartis controlled where the remaining, undesignated patients went.

Novartis admitted that these referrals had economic value: more dispensing fees, typically more rebates and higher sales revenue for the pharmacies. Almost all Exjade prescriptions in the network were shipped by mail. Before shipping a refill, the pharmacies called the patient or caregiver for consent, even when the physician had already prescribed the refill.

That made the refill conversation commercially important. A prescription authorized another supply of medicine. The patient’s agreement allowed the pharmacy to send it. The alleged arrangement put a second incentive into that conversation: keeping the current patient refilling could help win the next patient.

The Score Counted Patients Whose Doctors Told Them to Stop

US Bioservices admitted that the monthly Exjade Scorecards measured how long patients kept ordering refills without excluding those who stopped because of side effects or their physician’s direction. Novartis began issuing the scorecards around June 2007 and discussing ways to improve US Bioservices’ score around the following month.

Novartis’s own agreement adds a telling detail. The pharmacies collected reasons for stopping refills and regularly sent those reasons to LASH. By 2007, those reports showed that physician decisions and side effects were common reasons for stopping. The clinical explanation existed in the business’s own data. The score still counted those patients. We see a refill contest in which following a doctor’s instruction to stop treatment could count against the pharmacy.

According to US Bioservices’ admissions, the October 2008 allocation plan gave the highest-scoring pharmacy 60% of undesignated referrals and each of the other pharmacies 20%. The contest concerned the patients Novartis could direct, rather than every prescription entering the network. Novartis admitted directing those patients by score from January 2009 through March 2012.

Nurse Calls Under Pressure to Raise the Score

US Bioservices admitted that, in late 2007 and early 2008, it trained nurses to call Exjade patients to improve its adherence score. Nurses were trained to tell patients that untreated iron overload could have severe consequences such as organ failure, and that common Exjade side effects such as diarrhea typically went away with time.

Novartis admitted its part in applying pressure. Starting in August 2007, it told US Bioservices and then Accredo that their scores were unsatisfactory, pushed them to assign nurses to encourage patients to stay on Exjade and said lower scores could mean fewer undesignated patients.

US Bioservices admitted that its nurses did not use written scripts. In its own agreement, Novartis said US Bioservices managers presented a nurse program in December 2007 in which nurses were provided with scripts, and shared a sample discussion encouraging refills.

What managers presented to the manufacturer, what nurses were trained to say and what they actually used on calls are separate parts of the story. We would want to understand each with the person who saw it.

The Contract, the Scorecard and the Government Claim

The contract alone did not describe how Novartis ranked the pharmacies for future patients. Novartis admitted that neither the original EPASS agreements nor their amendments specified the basis for determining how many undesignated patients each pharmacy would receive.

That omission gives the scorecards and allocation messages their importance. The agreement established the service relationship. The performance reports and messages about future referrals showed what the manufacturer expected the pharmacy to improve. The discontinuation reports preserved the reasons patients stopped.

The prescription, billing response, reversal and final payment leave different records. We connect that billing history to the referral arrangement and the prescription it generated.

Here, the government alleged that Medicare and Medicaid paid millions of dollars for the tainted claims. The alleged exchange reached beyond a commercial dispute over who got more business. Taxpayers funded the prescriptions, while patients received counseling from a pharmacy whose next referrals depended on its refill performance.

Someone working in clinical services may know the call instructions and the reasons patients stopped. Someone handling manufacturer relationships may know the allocation messages. A billing employee may know which claims were paid or reversed. Those perspectives can connect the commercial bargain to the health care program that paid for the prescription.

Separate Pharmacy Cases Within the Exjade Network

US Bioservices’ covered allegations ran approximately from August 2010 through March 2012. BioScrip’s resolution, announced in January 2014, was approximately $15 million. Accredo’s settlement, announced in May 2015, was $60 million.

The manufacturer admitted a specific threat to BioScrip: in February 2007, Novartis said it could terminate that pharmacy’s Exjade relationship or reduce referrals if performance failed to improve. Its later pressure on US Bioservices concerned reducing undesignated referrals.

A whistleblower brought the False Claims Act case against Novartis, and the government joined it. Novartis’s separate manufacturer resolution included a $370 million civil settlement. US Bioservices later settled a separate government action over its own Exjade referral arrangement.

When a Clinical Program Has a Financial Scorecard

An allegation in the long-term-care pharmacy kickback cases shows another way a clinical program and a financial target can meet. In the Aranesp whistleblower complaint, the whistleblower alleged that PharMerica used regional scorecards to track therapeutic interchanges and determine employee bonuses. The complaint reproduced an internal memo about switching patients from Procrit to Aranesp:

The memo put the pharmacy’s margin directly into the instructions for a clinical initiative. That separate allegation concerned drug switching and employee incentives. In the Exjade case, the refill score governed access to future patients. Clinical work, measured by the business it brought in.

The Settlement and Whistleblower Rewards

The state settlement agreement allocated $10,642,013 to the federal government and $2,757,987 to the states. A whistleblower case under the False Claims Act can pay the person who brings it 15% to 30% of what the government recovers. For a pharmacy insider, we assess the referral decisions, clinical instructions and paid prescriptions together to understand the case their knowledge could support.

You Saw What the Refill Score Changed

If you saw patient referrals tied to refill targets or manufacturer pressure shape nurse calls, tell our whistleblower experts what happened inside the pharmacy. We build the case around those decisions and bring in pharmacy fraud whistleblower lawyers who understand specialty-drug referral arrangements. We stay beside you from the first conversation through the case, working to build your strongest pharmacy whistleblower case.