Pacira Pharmaceuticals: The Drug Came Before the Research

In the Pacira Exparel research grant settlement, Pacira Pharmaceuticals Inc. agreed to pay $3.5 million over allegations that it used research grants as kickbacks to drive prescriptions. The settlement covered alleged conduct from December 1, 2012, through April 30, 2015. The company allegedly required hospitals to put its drug on their formulary before awarding a grant, then sometimes paid for research that never happened. If you handled the proposal, the hospital decision or the payment, this case turns on choices you would recognize.

The Justice Department announced the settlement on July 28, 2020. Exparel was Pacira’s newly launched local analgesic during the alleged scheme. A pharmacist brought the False Claims Act case in New Jersey, connecting the manufacturer’s sales efforts to decisions inside a hospital.

How Do Pharmaceutical Kickbacks Work?

In this case, the alleged pharmaceutical kickbacks worked through research and other grants to healthcare providers and institutions. The government said Pacira intended the payments to generate Exparel sales to targeted physicians and their hospitals.

Sales representatives or marketing executives typically initiated the grants, according to the government. They discussed sales goals internally in connection with the proposed funding. The grant therefore had a commercial purpose before the research began: the people seeking prescriptions were also helping originate the research payment.

Access to the hospital’s drug list came first. The funding followed. That order mattered for a manufacturer trying to get its newly launched drug used inside hospitals.

That sequence is central to research payments used to buy prescriptions. The proposal might describe a scientific question, but the condition for receiving the money can reveal a different priority.

A Research Grant Without Research Milestones

Pacira allegedly did not require recipients by contract to stick to the proposed topic or reach particular milestones before payment. In many cases, it did not follow up to see whether the work was being performed. In some cases, recipients did no work at all.

The government also alleged that Pacira failed to document why it needed the research or what the proposed work was worth at fair market value.

Then there was the allegation about the people overseeing the grants. Executives allegedly coached recipients and other employees on avoiding internal scrutiny of the payments.

Why Medicare and Medicaid Were Paying for the Decision

The government alleged that Pacira’s grants caused false claims because the induced Exparel sales reached procedures reimbursed by Medicare and Medicaid. Pacira allegedly knew the drug would be used in that publicly funded care.

The grant was the manufacturer’s payment. The later claim for a procedure involving Exparel was the demand on the public program. The Justice Department explained that Medicare and Medicaid do not pay claims involving products tainted by illegal kickbacks. That connection carried the grant allegations into the False Claims Act case.

For a hospital or manufacturer employee, the research file and the health care claim may sit in different parts of the business. The alleged scheme connected them through the drug use the grant was meant to induce. Taxpayers picked up the cost of procedures involving the drug whose sales Pacira allegedly bought.

Can a Pharmacist Be a Whistleblower?

A pharmacist brought the Pacira case. The complaint’s account of an offer at North Vista Hospital shows how someone on the receiving side of a sales contact could see the proposed arrangement.

The pharmacist alleged:

The offer came from a sales representative, and the proposed benefit went to the hospital.

The complaint also alleged that sales representatives went beyond the pharmacist’s instructions to limit their marketing, approaching orthopedic, bariatric and orthopedic spine surgeons. North Vista’s pharmacy committee allegedly restricted Exparel use after promotional efforts led to overuse. The pharmacist’s perspective reached both the sales approach and the hospital’s response.

Research Payments Reserved for Prescribers

A survey payment can also become an incentive to prescribe the sponsor’s drug. In its July 11, 2013 announcement about Amgen’s Xgeva program, the government described an alleged change to a survey program called Deep Dive. The original design would have paid doctors to report how they treated patients with bone cancer, whether or not they prescribed Xgeva. Amgen allegedly increased the payments and made them available only to doctors who prescribed the drug.

The government also said Amgen’s Xgeva marketing team had access to the identities of doctors receiving Deep Dive contracts, even though it was not supposed to know them. The separation between the data purchase and the sales team did not hold, according to that account.

That change tells the story. A survey asking about treatment became, in the government’s account, a payment reserved for use of the sponsor’s product. In both cases, the alleged condition on funding exposed the sales purpose behind the research payment.

What Evidence Is Needed to Prove Fraud?

Proving research-grant fraud means connecting the grant, the sales effort and the government claims. That is the work our whistleblower experts do with you.

We examine grant proposals and agreements alongside the sales discussions that produced them. We compare what the company promised to buy with what it actually received.

The valuation and review records matter too. They can explain why a sum was chosen, who approved it and how questions about the grant were handled. The alleged coaching to avoid scrutiny makes those internal conversations particularly relevant.

A sales employee, a research administrator and a hospital pharmacist may each know a different part of the arrangement. We work with pharmaceutical whistleblowers to connect that business knowledge to the payments and decisions behind the case.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Grant Was Approved

If you saw research funding depend on hospital access or drug use, tell our whistleblower experts what drove the grant. We build your strongest case around those decisions and bring in pharmaceutical fraud whistleblower lawyers who understand research-payment schemes. Our experts stay with you from the first conversation through the case.