Galena Biopharma: Speaker Fees, Pharmacy Rebates and the RELIEF Registry

In the Galena Abstral kickback settlement, Galena Biopharma agreed to pay more than $7.55 million to resolve allegations that it paid doctors to prescribe the opioid drug Abstral through meals, meeting fees, a pharmacy rebate and patient-registry payments. The alleged incentives reached the same prescribing decision through different doors. An employee who saw the event budget, the pharmacy agreement or the registry payments could recognize a part of the arrangement that a prescription alone would never show.

The Justice Department announced the civil settlement on September 8, 2017. A whistleblower brought the case under the False Claims Act. Among pharmaceutical fraud cases, Galena stands out for the range of ways the government alleged that a manufacturer bought prescribing: hospitality, paid participation, a payment to the doctors’ business and a study involving their patients.

Different Payments, the Same Prescribing Decision

The alleged pharmaceutical kickbacks had a common purpose: getting doctors to prescribe Abstral. But the recipients and the stated reasons for payment differed. Meals went to doctors and staff at a high-prescribing practice. Fees went to physicians and speakers attending an advisory board. A rebate went to a physician-owned pharmacy. Registry payments went to doctors who referred patients into a study of experiences with the drug.

Those differences matter inside a company. An event invitation describes a meeting. A rebate agreement describes a commercial payment. A registry describes patient information. To understand an arrangement like Galena’s, we connect those descriptions to the people making prescribing decisions and the business the manufacturer expected in return.

The alleged bargain put the drug maker’s payments behind the doctor’s choice, then left taxpayers paying for the prescription. Patients needed a treatment decision. Galena allegedly paid for a sales decision.

Meals and Advisory Fees to Induce Abstral Prescribing

The government alleged that Galena provided more than 85 free meals to doctors and staff from a single high-prescribing practice. That detail gives the hospitality allegation its shape: repeated benefits directed at a practice already generating substantial prescribing business for the company.

For the alleged advisory-board arrangement, doctors received $5,000 and speakers received $6,000, plus expenses, to attend an event partly planned and attended by Galena sales team members.

A meeting budget can make those payments look self-contained: a fee for attending, a fee for speaking, reimbursement for expenses. The sales team’s involvement puts the meeting back into the business of selling the drug.

The HHS Office of Inspector General’s guidance for drug makers addressed this problem in 2003. It singled out payments to physicians who attended meetings mainly to listen, and fees for services tied to marketing. An advisory board was supposed to buy advice. The Galena allegation was that it bought prescribing.

The same questions arise in speaker-program kickbacks. Here, the government’s account placed the speaker fees inside an advisory-board event involving the sales team.

The Pharmacy Rebate Reached the Prescribers’ Business

Galena allegedly paid approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce its owners to prescribe Abstral. The ownership relationship is the point. The manufacturer could pay the pharmacy and, through that business, benefit the doctors whose prescribing it wanted to influence.

Drug makers use rebates to obtain formulary access, preferred placement or volume. In Galena’s alleged arrangement, the rebate went to a pharmacy the prescribers owned.

A 2020 USC Schaeffer Center study, The Association Between Drug Rebates and List Prices, found that increases in estimated rebates were associated with increases in list prices across the branded drugs it studied. Rebates shape the business of selling drugs. Galena’s case turns on who received the money and what the manufacturer wanted them to prescribe.

For an insider, the pharmacy’s ownership and the agreement’s performance terms belong together. We examine what triggered a payment, who benefited from it and how the company discussed the prescribing it wanted. The contract and the payment approval may describe the commercial arrangement, while communications with the owners explain its purpose.

Following only payments made directly to individual doctors would miss that route. The alleged benefit traveled through a business owned by the prescribers.

Pharmacy Performance Can Mean More Drug Business

The broader specialty-pharmacy kickback cases show how a manufacturer can use a pharmacy’s commercial incentives to influence drug use. In the separate Novartis case, the government’s complaint alleged that BioScrip faced losing patient referrals unless it increased Exjade refills:

In that allegation, future patients were the financial incentive. In Galena’s, the government identified a rebate to the prescribers’ pharmacy. The comparison shows why pharmacy performance terms deserve attention: they can connect a manufacturer’s payment or referral decisions with the drug business the pharmacy is expected to generate.

The RELIEF Registry Paid for Patient Referrals

Galena allegedly paid doctors to refer patients to its RELIEF patient registry study as a means of inducing Abstral prescribing. The registry’s stated purpose was to collect data on patients’ experiences with the drug.

A study of patients’ experiences with Abstral allegedly became another way to pay doctors to choose it. The payment reached the doctor through the patient’s referral into the study.

The inspector general’s guidance singled out postmarketing research for scrutiny when it served as a pretext to generate prescriptions. It also identified research contracts originating through sales or marketing, or offered during sales contacts, as particularly concerning.

The same underlying issue appeared in Amgen’s separate Xgeva case. In its July 2013 account of the Deep Dive data-purchase program, the government alleged that Amgen changed a survey arrangement that originally paid doctors regardless of the drug they prescribed. The company allegedly increased the payments and limited them to doctors who prescribed Xgeva. Its marketing team also had access to the participating doctors’ identities.

That change made the prescribing condition visible. It illustrates the question behind research payments used to buy prescriptions: what did a doctor have to do to become eligible for the money?

The Whistleblower Case and Reward

The Galena settlement resolved a lawsuit brought under the whistleblower provisions of the False Claims Act. The Justice Department announced that the whistleblower would receive more than $1.2 million from the settlement.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For pharmaceutical whistleblowers, the starting point is often knowledge of a business decision: who approved the payment, what the recipient was expected to deliver and how the arrangement was explained inside the company.

What Evidence Is Needed to Prove Fraud?

The evidence ties the payment to the prescribing and the government claim, and putting those together is what we do with you. Your knowledge of the business explains what the paperwork alone cannot: why the company wanted a particular doctor in the room or a particular pharmacy under contract.

You Know What the Payment Bought

If you saw the sales objective behind an advisory fee, pharmacy rebate or registry payment, speak with our whistleblower experts about what the payment bought. We build your case with you, bring in pharmaceutical kickback whistleblower lawyers who understand these payment arrangements, and stay beside you through the pursuit of a recovery.