TAP Pharmaceutical whistleblower Joseph Gerstein alleged in a qui tam whistleblower complaint that TAP was paying illegal kickbacks to doctors who dispensed the company’s high priced prostate cancer drug (Lupron).

TAP paid $875 million to federal and state governments to resolve the case, which was brought on Mr. Gerstein’s behalf by Phillips & Cohen LLP and later joined by the Department of Justice. Below are excerpts from the Chicago Tribune’s story about how Mr. Gerstein, then the medical director for Tufts Associated Health Maintenance Organization, decided to become a whistleblower.

 

Doctor’s outrage stings TAP

BOSTON — When a pair of sales representatives from Lake Forest-based TAP Pharmaceutical Products Inc. turned up at Dr. Joseph Gerstein’s HMO office here, the pitch took an unusual turn.

Instead of merely trying to persuade the veteran internist that TAP’s prostate cancer drug was better than the cheaper one his HMO was covering, the pair also threw in a sweetener: a $20,000 educational grant for Gerstein, with no restrictions on how the money could be spent, federal prosecutors allege.

When Gerstein failed to bend, the offer got sweeter, eventually reaching $75,000, prosecutors say. Rather than take the bucks, however, Gerstein took the case to federal authorities in 1997, allowing them to bug his office and listen in on the sales pitches that are at the heart of the biggest health-care fraud case ever.

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In Gerstein’s case, the motivation came from a sense of outrage, said his attorney, Mary Louise Cohen of Washington. The 65-year-old “thought he was offered a grant that was blatantly illegal, and he was offended,” Cohen said.

The big bucks allegedly tossed around during the sales pitch reflect the high stakes for TAP sales executives pushing their Lupron prostate cancer drug, which generates more than $800 million in revenue each year.

The hundreds of elderly prostate cancer patients enrolled in Gerstein’s Tufts Health Plan–where as medical director he’s responsible for balancing the costs and effectiveness of medications–could have provided a multimillion-dollar boon to TAP.

Indeed, Boston-based Tufts was once a Lupron customer, but it switched to covering only Astra Zeneca’s competing Zoladex in 1996 after Gerstein’s research showed that the drugs were equivalent. Before the switch, Tufts spent about $1,200 more per patient on Lupron than on Zoladex.

Gerstein couldn’t have been a less receptive audience for drug industry marketing pitches, which often include gifts and other perks for doctors, say those who know him and Tufts.

Read the full Chicago Tribune story here.

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