Pharmaceutical REMS Fraud: Who Gets the Drug and Who Gets Shut Out

Pharmaceutical REMS fraud concerns the misuse of drug-safety restrictions in decisions about who gets a drug and who pays for it. The commercial pressure runs in opposite directions. A sales team wants more patients to receive the product. A brand facing generic entry may want fewer outsiders to get it.

Aegerion’s Juxtapid case shows how patient eligibility becomes a payment issue. Whistleblowers alleged that sales staff avoided mentioning the rare disease the drug treated, while a case manager arranged to put that diagnosis on prescription paperwork. Their complaint also alleged that Medicare was paying for Juxtapid for patients unlikely to have that disease. The diagnosis allegedly disappeared from the pitch and appeared in the paperwork.

What Is a REMS?

A REMS is a Risk Evaluation and Mitigation Strategy, a drug-safety plan required by the Food and Drug Administration for drugs whose known or potential risks may outweigh their benefits. The HHS Office of Inspector General’s review of the program explains the job: manufacturers submit the plans, and the agency monitors whether they protect the public from those risks.

For a regulatory employee, there are distinct documents to compare: the approved plan, the manufacturer’s assessment of its performance and the agency’s review of that assessment. A plan describes a control. An assessment is supposed to show how that control performed when the drug reached patients.

The distinction matters in promotion and reimbursement cases. A patient’s diagnosis, a sales message and an insurer’s authorization answer different questions. In Aegerion’s case, the government alleged that the company manipulated the information passing between those stages. What sales staff told a doctor and what a case manager put on the paperwork tell the story together.

What the REMS Assessments Left Unanswered

OIG’s 2013 evaluation found that nearly half of the sponsor assessments it reviewed omitted information FDA had requested. The Food and Drug Administration determined that only seven of the 49 REMS reviewed met all their goals. The agency also lacked reliable methods for assessing effectiveness.

Those were findings about the program’s early years, covering approved REMS from 2008 through 2011. For an insider who works on assessments, the comparison is the report against the information used to prepare it: what was requested, what the manufacturer submitted and what the agency could conclude. The approved plan and a favorable summary of its performance are different documents.

When REMS Restrictions Block Generic Testing

A generic or biosimilar developer needs physical samples of the brand product to conduct the bioequivalence or comparability testing required for its application. A manufacturer that refuses to sell those samples can stop the development work before the competing product reaches the market. Manufacturers sometimes invoke REMS restrictions as the reason for refusing.

That gives sample access a commercial significance beyond the price of the samples themselves. The brand controls access to something its prospective competitor needs in order to compete.

The CREATES Act addresses this problem. For a product subject to REMS with elements to assure safe use, FDA’s sample authorization must state that supplying the product under the authorization’s terms will not violate its REMS. The safety restriction and the authorization therefore have to be read together.

The practical evidence sits in the purchase request, the quantity needed, the response, the proposed supply terms and the authorization. Price, delivery and added conditions show how the brand responded. The correspondence also connects the request to a corporate decision-maker, rather than leaving the refusal as an unexplained failure to ship.

For a market-access insider concerned about healthcare fraud, we assess how the access decision connects to false claims paid by government programs. That payment connection is the focus of our whistleblower review.

Pay-for-Delay Deals and Generic Entry

Delayed generic entry can also involve an agreement between a brand and a generic manufacturer. Public Citizen’s 2018 report, Twenty-Seven Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 Through 2017, describes pay-for-delay arrangements and explains that the value exchanged can extend beyond direct cash payments.

That changes which business records matter. Sample-access allegations turn on a request and the response to it. A negotiated delay calls for examining the agreement and the value exchanged. Both put a specific business decision behind the delayed competition.

Aegerion’s Juxtapid Diagnosis and Authorization Allegations

Aegerion agreed to a $28.8 million civil False Claims Act settlement in September 2017 over allegations involving Juxtapid’s diagnosis, authorization and copay practices. The Justice Department’s announcement described allegations that the company distributed Juxtapid outside the rare-disease population identified by the HoFH diagnosis, misled prescribers, altered medical-necessity and prior-authorization documents, and used a foundation to defray patient copays.

The alleged sales instructions put the diagnosis problem in plain language. In the whistleblowers’ amended complaint, a national sales director allegedly told a representative:

The complaint alleged that representatives were told to speak generally about a lipid treatment for patients with high cholesterol. The diagnosis that defined the patient population became something sales staff were allegedly told to avoid mentioning.

The authorization allegation ran in the other direction. The complaint alleged that a Compass case manager handling prescription paperwork instructed a doctor’s staff to change a diagnosis code to HoFH. It said the doctor learned of the change only afterward. The complaint described the result:

These allegations put the sales instructions beside the authorization records. The people selling the drug and the people handling the paperwork allegedly used the diagnosis differently to move prescriptions toward payment.

The copay allegations add another part of that payment trail. The government alleged that Aegerion funneled funds through Patient Services Inc. to cover copays for patients who otherwise would have received free drug. The foundation allegedly supplied a way to turn those patients into reimbursed prescriptions. That connects the diagnosis and authorization questions to payments through an intermediary.

The Justice Department reported a $4.7 million reward to the whistleblowers from the federal civil settlement proceeds.

What an Insider’s Records Can Show

The strongest connection is between the requirement, the company’s instructions and what happened afterward. Regulatory staff may recognize the difference between an approved plan and the assessment submitted about it. Reimbursement staff may recognize a changed diagnosis or authorization request. Market-access staff may know why a sample request stalled after an FDA authorization arrived.

A manufacturer can cause a false government claim even when a pharmacy or physician submits it. That is why a whistleblower case involving government health care programs reaches both the company’s conduct and the reimbursement it generated. The person who understands the business decision may be far removed from the person who sent the bill.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We assess the connection to government payments with you and bring in pharmaceutical whistleblower lawyers whose experience fits the conduct and the records.

When You Know Who Changed the Instructions

If you know why a patient diagnosis changed, what went into a REMS assessment or who stopped a sample sale, talk with our whistleblower experts about the decision behind those records. We help turn your knowledge of the safety program, the sales instructions and the payment trail into a pharmaceutical whistleblower case. We stay beside you through the process and match the case with pharmaceutical whistleblower counsel who understand how the product reaches patients and who pays for it.