The CR Bard Settlement
As reported by the Atlanta Journal Constitution,
A medical device company on Monday agreed to pay a $48.2 million
settlement to resolve claims by a Georgia employee that it paid
kickbacks to doctors and customers who bought radiation treatment for
C.R. Bard Inc., which is headquartered in New
Jersey and has offices in Covington, resolved a whistle-blower suit
filed by the employee in 2006. The suit alleged that the company paid
off doctors and hospitals to induce them to prescribe brachytherapy
seeds, which are implanted in the prostate and deliver a dose of
radiation to cancer cells.
Another brief report in the Macon (GA) Telegraph gave a tiny bit more detail about what was given to physicians to get them to use Bard’s radiation therapy products,
Customers could order the seeds, used in brachytherapy to deliver a
prescribed dose of radiation directly to cancer cells, from multiple
companies. But Bard allegedly offered doctors grant money, rebates, free
medical equipment and advertising campaigns to entice them to buy their
product at inflated prices, according to a news release issued by [whistle-blower Julie]
Darity’s legal team….
The Usual Elements of Legal Settlements of Allegations of Health Care Corporate Bad Behavior
The story, briefly told as it was, included many of the usual elements of stories of legal settlements of wrong-doing by large health care corporations.
The settlement, hence justice, as it were, took a long time, about 7 years since the most recent behavior, and 15 years since its start. Per the AJC,
Bard employed its kickback scheme from 1998 to 2006, federal prosecutors said.
Penalties Not as Big as They Appeared
The penalties were not as big as they seemed. There was the seemingly large fine, $48.2 million dollars. However, that should be compared to the company’s net sales of over $2.95 billion and net income of $530 million in 2012, according to the company’s annual report. It should also be compared to the total compensation of the company’s chairman and CEO in 2012, over $8.7 million, and to that of its president and chief operating officer, over $6.0 million, according to the company’s 2012 proxy statement. Apparently, the fine came out of the company’s treasury, so its impact was diffused among all shareholders, employees, customers, and patients, not directed to those who may have authorized, directed or implemented the kickbacks to physicians.
No Penalties for Individuals, No Acknowledgement of Wrong-Doing
The settlement did not involve any sort of direct penalties to those who authorized, directed, or implemented the kickbacks.
The corporation did not even acknowledge any bad behavior. As per the AJC,
Bard is pleased to settle the claims, Scott Lowry, a company spokesman, said in a statement.
resolution allows the company to put this matter behind it and continue
to focus on delivering life-enhancing medical devices and technologies
to patients around the world,’ he said. ‘We remain committed to
continuously enhancing and improving our compliance programs in
accordance with industry standards.’
Suppression of Whistle-Blowing
It may not be part of all such settlements, but note that in this case there seemed to be an attempt to shut up the whistle-blower. So, there is reason to think that justice, such as it was, was delayed because the company seemingly tried to punish the whistle-blower, rather than listen to what she had to say. Per the Macon Telegraph,
Darity, 56, said she first reported what she suspected as questionable activities to her supervisors.
‘I did exactly what was outlined in the company ethics policy,’ she said. ‘I wanted to think things were being corrected.’
In time, she realized nothing had changed. She filed an internal whistle-blower complaint.
Her job was eliminated in November 2005, soon after an investigation was launched into her whistle-blower complaint, she said.
had worked for Bard, which has an office in Covington, for more than 18
years. When her job was eliminated, she was a manager in the
Brachytherapy Contracts Administration division.
Out of a job, Darity filed the lawsuit in U.S. District Court for the Northern District of Georgia in January 2006.
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Nonetheless, the government seemingly trusted C R Bard to fix its own behavior going forward, per the Wall Street Journal,
As part of a non-prosecution agreement, C.R. Bard agreed to pay an
additional $2.2 million and take remedial steps to enhance compliance.
The company had said in a regulatory filing last year that it expected
the settlement to include a corporate integrity agreement, which
typically require companies to obey restrictions on their sales and
marketing practices, but no such agreement was announced Monday.
Note that here we discussed a case in which an academic medical institution seemingly tried to punish faculty members who questioned that organization’s overly enthusiastic approach to prostate cancer.
Summary – the Profitable but Unsubstantiated Aggressive Approach to Prostate Cancer
So its just another day at the office. This was a typical settlement of allegations of unethical behavior by a large health care organization. A large health care company allegedly bribed doctors to use its products. It seemingly tried to shut up a whistle-blower. Seven years later, the company got a financial slap on the wrist, but no one directly involved in the alleged kickbacks, and no one whose compensation may have been enlarged due to such apparently unethical activity paid a price. Never mind that the alleged kickbacks may have induced doctors to use treatments that provided no overall benefit, but could have harmed patients.
Before ending with our usual fulmination, I should note that this case appears to be one small piece in the puzzle of our national infatuation with an aggressive approach to prostate cancer, despite a lack of essentially any good evidence that this approach does any good. Brachytherapy, the treatment pushed allegedly by kickbacks, is one kind of aggressive treatment for prostate cancer. Yet there is no good evidence from randomized controlled trials that is prolongs life. In fact, a recent (and the only major) randomized controlled trial of aggressive treatment of prostate cancer on initial diagnosis failed to show any overall survival benefit.(1) There has been a huge push to screen all men of a certain age for prostate cancer. Yet now two new trials also failed to show any overall survival benefit from screening.(2,3)
But the prostate cancer business is very lucrative. On the Reforming Health blog, a post summarized a lecture given by Dr Otis Brawley, chief medical officer of the American Cancer Society in which Dr Brawley described the financial scheme underlying the aggressive approach to prostate cancer,
Brawley recounts an experience he had on a site visit to a hospital
in 1998 while an Assistant Director at the National Cancer Institute.
During the visit a marketing executive explains to Brawley the publicity
value and financial rewards of a free prostate screening program
offered by the hospital at a local mall. The plan is to screen the first
1,000 men over 50 who come to the mall for testing. I’ve transcribed
Brawley’s recollections from the video and they provide a great
explanation for the profit-driven practices that continue to occur
today, 14 years later:
‘If they screen 1,000 men they’re going to have 145 abnormals.
They’re going to charge about $3,000 to figure out what is abnormal
about these abnormals, that’s how they pay for the free screening. About
10 of the 145 won’t come to this hospital so that’s business for their
competitors, but they’ll get 135 times $3,500 on average. Of the 135, 45
are going to die of prostate cancer and the other percentage are going
to get radical prostatectomy at about $30-40,000 a case; there’s a
percentage that’s going to get seeds at about $30,000 a case; a
percentage were going to get radiation therapy that (at the time) was
about $60,000. Then [the marketing executive’s] business plan goes
further, he knows how many guys are going to have so much incontinence
that diapers aren’t going to do it so he had in his business plan how
many artificial sphincters urologists were going to implant. And then he
was a little apologetic because there was this new thing called Viagra
that screwed up his estimates for how many penile implants he was going
to sell because guys were upset about impotence related to prostate
Brawley says, ‘this is 1998, I ask him, if you screen 1,000
people how many lives are you going to save? He took off his glasses and
looked at me like I was some kind of fool and said, ‘Don’t you know,
nobody’s ever shown that prostate cancer screening saves lives, I can’t
give you an estimate on that.’’
Presumably because he was a marketing executive, the manager whom Brawley quoted did not have to feel doubt about all the men subjected to needless procedures, and who would be at risk of serious and unpleasant adverse effects of these procedures, all to make money but not to prolong their lives. Of course, not only the hospitals make money, but also quite obviously the companies that sell them the drugs and devices needed for all this medical aggression make money, as do the doctors who go along with it all.
Now we suspect that one small reason the doctors have gone along with it is that they may have gotten inducements from those companies.
Time to fulminate,…
We will not deter unethical behavior by health
care organizations until the people who authorize, direct or implement
bad behavior fear some meaningfully negative consequences. Real health
care reform needs to make health care leaders accountable, and
especially accountable for the bad behavior that helped make them rich.
1. Wilt TJ, Brewer MK, Jones KM et al. Radical prostatectomy versus observation for localized prostate cancer. N Engl J Med 2012; 367: 203-13. [Link here]
2. Andriole GL, Crawford ED, Grubb RL et al. Mortality results from a randomized prostate-cancer screening trial. N Engl J Med 2009; 360: 1310-9. [Link here]
3. Schroder FH, Gugosson J, Roobl MJ et al. Screening and prostate-cancer mortality in a randomized European study. N Engl J Med 2009: 360: 1320-8.[Link here]
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