US Bioservices: More Refills Meant More Patient Referrals

In the US Bioservices Exjade settlement, the specialty pharmacy agreed to pay $13.4 million to resolve allegations that it accepted a kickback arrangement promising more patient referrals for higher refill rates. Its own admissions connect a manufacturer’s scorecard to nurse counseling intended to improve that score. Keeping patients ordering refills improved the score that determined who got the next patient.

The 2017 settlement grew out of a whistleblower’s pharmaceutical fraud case involving Novartis and the pharmacies dispensing its drugs. US Bioservices’ account explains how a contract to answer patients’ clinical questions developed into a business incentive to keep prescriptions coming.

What Was US Bioservices’ Exjade Settlement About?

US Bioservices’ Exjade settlement concerned its participation in Novartis’s EPASS distribution network and the connection between refill performance, patient referrals and Medicare and Medicaid claims. The whistleblower’s complaint identified US Bioservices as an AmerisourceBergen company. Exjade was prescribed for iron overload. The pharmacy admitted that it signed its distribution contract with Novartis in December 2005 and agreed to make clinical staff available to answer patients’ questions and concerns about the drug.

EPASS stood for Exjade Patient Assistance and Support Services. The network brought together US Bioservices, BioScrip and Accredo, with a data vendor processing incoming prescriptions and allocating patients among the pharmacies. In its complaint about the Exjade network, the government described a closed distribution system handling nearly all prescriptions for the drug.

That arrangement gave Novartis influence over who got the business. The complaint alleged that approximately half of new patients had no pharmacy specified by their doctor or insurer. These were the undesignated referrals Novartis could allocate. A pharmacy inside the network had access to a stream of prescriptions the manufacturer could direct elsewhere.

The work extended beyond shipping medication. The complaint describes BioScrip sending the hub information about patients’ diagnoses, doses, refill orders and physician decisions to discontinue therapy. That distinction would matter when Novartis began scoring the pharmacies.

How EPASS Turned Refills Into Referrals

Under EPASS, specialty pharmacy refill rates determined how many new patients each pharmacy got. A better score meant a larger share of new patients whose pharmacy had not already been chosen.

Around June 2007, Novartis began sending monthly Exjade Scorecards to the pharmacies. The adherence score measured how long patients continued ordering refills. US Bioservices admitted that the calculation did not exclude patients who stopped because of side effects or because their physicians directed them to stop therapy. Around the following month, Novartis began discussing how the pharmacy could improve its score.

A doctor’s decision to stop treatment still counted against the pharmacy’s refill score.

In October 2008, Novartis implemented a referral plan giving 60% of undesignated patients to the pharmacy with the highest adherence scores and 20% to each of the others. The score now determined the size of the next opportunity to dispense Exjade.

The government’s complaint alleged that by early 2007, fewer patients than Novartis expected were ordering refills, with side effects among the reasons. Prosecutors alleged that increasing refills became a central marketing objective. The specialty pharmacy referral incentive carried that objective into the pharmacy’s relationship with its patients.

What Did US Bioservices Nurses Tell Exjade Patients?

In its Exjade settlement, US Bioservices admitted training nurses to improve its adherence score through patient counseling. The company admitted that, in late 2007 and early 2008, it trained nurses to tell patients that leaving iron overload untreated could have severe consequences such as organ failure, while common Exjade side effects such as diarrhea typically went away with time.

The company also admitted that its nurses did not use written scripts for the calls.

That detail matters to anyone who worked on the calls or supervised them. A written script would show the words approved for use. Here, the admitted account connects the training, the message and the business objective even without one. The company identified improving its adherence score as the reason for the training.

US Bioservices had promised clinical staff to answer patients’ questions. Its training instead put a refill target behind the patient conversation, even when the score included patients whose doctors had stopped treatment.

How Do Pharmaceutical Kickbacks Work?

Pharmaceutical kickbacks can buy a pharmacy’s help promoting a drug with patient referrals as well as money. The government alleged that US Bioservices violated the Anti-Kickback Statute and the False Claims Act by accepting promises of additional referrals and other benefits in exchange for better refill performance. The government alleged that US Bioservices then submitted thousands of Exjade prescription claims to Medicare and Medicaid, causing the programs to pay millions of dollars on claims tied to that arrangement.

A referral had value because it brought dispensing business. The government’s account of BioScrip’s contract makes the economics explicit: more Exjade patients meant higher sales, more Medicare and Medicaid reimbursements, dispensing fees and rebates. The same conversation could affect the manufacturer’s drug sales and the pharmacy’s revenue.

A 2020 University of Portsmouth doctoral thesis on pharmacists’ dispensing decisions places the financial incentive at the employer’s level:

That observation explains the money behind a referral arrangement. The employee making the call and the company receiving the next prescription occupy different places in the money flow. In this case, the pharmacy’s access to new patients depended on the performance measure its nurses were being trained to improve. Patients heard the clinical message. Management had the scorecard and the referral allocation.

What the Other Exjade Pharmacies Show

BioScrip and Accredo show how referral incentives reached patient conversations elsewhere in the same network.

The government’s complaint alleged that Novartis threatened to cut off BioScrip’s undesignated referrals or remove it from EPASS unless it improved refill performance. It alleged that BioScrip then assigned employees to encourage refills and persuade patients who had stopped to resume. The complaint’s description of a newly hired licensed practical nurse shows how little preparation allegedly stood between the business demand and the patient:

The complaint also alleged that Novartis increased BioScrip’s per-shipment rebates to reward its refill performance and keep the calls going. The alleged inducements reached both the supply of new patients and the money earned on shipments.

Accredo’s admissions described written call protocols. Its nurses were directed to discuss common adverse reactions, while the protocols omitted more severe risks such as kidney or liver impairment. After the Food and Drug Administration required a black box warning in January 2010, Accredo’s February revision still omitted the severe reactions covered by that warning. US Bioservices’ admitted account instead centers on nurse training without written scripts.

The Pharmacies Settled Too

The US Bioservices resolution allocated approximately $10.6 million to the United States and $2.8 million to state civil fraud claims.

The earlier pharmacy settlements included BioScrip’s approximately $15 million federal and state resolution and Accredo’s $60 million settlement. Both preceded Novartis’s separate $370 million civil settlement, announced in November 2015, which covered Exjade and Myfortic specialty-pharmacy allegations.

What Are Red Flags for Pharmacists?

In this case, the red flags were a manufacturer using refill scores to allocate patients and a pharmacy training nurses to improve those scores, even though the calculation included patients directed to stop treatment. The evidence connected a clinical conversation to a commercial consequence.

Manufacturer referral scorecards and patient-call records tell different parts of the story. If you are a specialty pharmacist who understands the scoring rules or the reasons patients stopped treatment, our whistleblower experts can help connect that knowledge to the referral decisions and government payments.

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

You Know What Drove the Calls

If you saw referral targets shape what nurses told patients, talk with our whistleblower experts about the program you worked in. We build your case around the connection between patient calls, referral decisions and government payments, and bring in pharmaceutical whistleblower lawyers experienced in specialty-pharmacy kickbacks. We stay beside you as that inside knowledge becomes a case for recovery.