Methods Used for Marketing Remicade Are Under Fire

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April 11, 2002

Methods Used for Marketing Arthritis Drug Are Under Fire

by Melody sen

The New York Times

Centocor, a subsidiary of & , has been providing doctors

with marketing materials that describe how they can make extra money by

prescribing a new drug, a practice that health care fraud experts say

may be illegal.

Some doctors have recently raised concerns about Centocor's marketing of

the new drug, Remicade, an expensive treatment for rheumatoid arthritis.

" We need to utilize these medicines based on their merits and not on

their profit potential, " said Dr. Arthur Weaver, a clinical professor of

medicine at the University of Nebraska Medical Center and past president

of the American College of Rheumatology.

A document available to doctors on Centocor's Web site until last week,

when a reporter asked about it, stated that one " benefit " of prescribing

Remicade was the " financial impact " on the physician's practice. The

document included a worksheet where physicians could calculate their

" estimated revenue per patient " from prescribing the drug.

The " revenue, " according to the worksheet, was primarily the difference

between what Medicare pays doctors for Remicade, which is given

intravenously in their offices, and the lower amount that Centocor

charged doctors for the drug. The drug is one of the few rheumatoid

arthritis treatments that Medicare covers.

Legal experts say the document described a marketing practice similar to

ones found to be illegal when used by other companies and that remain a

focus of federal health care fraud investigators.

In one of those cases, federal prosecutors said that Tap Pharmaceutical

Products had illegally promoted Lupron, a drug often prescribed for

prostate cancer, by telling doctors they could make money through

Medicare and Medicaid reimbursements for the drug. Tap agreed to pay

$875 million last year to settle criminal and civil charges in that

case, the largest sum ever paid for health care fraud.

Rick D. , vice president of Centocor's immunology business, who

is responsible for Remicade's marketing, said the marketing document was

outdated and had been inadvertently left on the Web site. Centocor

stopped using the document in 2000, he said, after reviewing all its

marketing materials to make sure they complied with & 's

policies.

& acquired Centocor in October 1999.

" Our policy is black and white, " Mr. said. " We do not talk

about profitability and how physicians can make money. "

Dr. April, a rheumatologist in Tulsa, Okla., said that other

doctors have told him that Centocor representatives had invited them to

meetings where they could learn about how they could profit from

Remicade. He said that the rheumatology field is now abuzz with

discussion of the money to be made.

Centocor says that its representatives have been trained to avoid any

talk about the incomes of doctors and that it is not aware of such

meetings. " Our policy is clear and concise in what we expect from

employees, " Mr. said.

Dr. April said he believed that some doctors were prescribing Remicade,

which can cost more than $20,000 a year, before they tried a low-cost

generic drug called methotrexate, a standard treatment for rheumatoid

arthritis. He said some doctors were also choosing Remicade over Enbrel,

a similar new medicine that is also expensive, because of the extra

money they could make.

Doctors are also motivated to prescribe Remicade, Dr. April said, to

help their elderly patients afford an effective medicine since it is

covered by Medicare and similar drugs are not.

American College of Rheumatology guidelines suggest that doctors

prescribe Remicade or Enbrel only after patients have not responded to

methotrexate, or have shown they cannot tolerate it.

Both Remicade and Enbrel, made by Immunex (news/quote) in a marketing

partnership with Wyeth, have been shown in studies to offer quick help

to people with serious rheumatoid arthritis. The disease, a chronic

inflammatory disorder that harms the joints, can cause serious pain and

crippling harm. But both drugs have side effects, including an increased

risk of serious, life-threatening infections.

" Remicade is a good drug, " Dr. April said, " but it is being overused

because there is money to be made by using it. "

Medicare pays only for drugs that must be administered by a physician.

Of drugs for rheumatoid arthritis, Remicade is one of very few covered

by Medicare because it must be given intravenously. Enbrel, also a

biologically engineered medicine, can be injected by patients themselves

and is not covered. Most of the other drugs for rheumatoid arthritis are

taken orally.

Remicade and Enbrel, which were approved in 1998, are in a heated

marketing battle. Sales of both drugs have risen rapidly since they were

approved in 1998, but Enbrel has been outselling Remicade. Now Remicade

is gaining ground.

Sales of Remicade were $658 million last year, more than double the $256

million in sales in 2000, according to NDCHealth, a health care

information company. Sales of Enbrel were $907 million last year, up

almost 18 percent from $770 million in 2000.

Kathleen McDermott, a former assistant United States attorney who works

at Blank Rome Comisky & McCauley law firm, said Centocor's marketing

statements in the Web site document could invite scrutiny from federal

health care fraud investigators. " Are doctors only going to prescribe

what benefits their pocketbook, or will they prescribe what benefits the

patient? " she said. " That is the core issue. "

M. Sobol, a lawyer at Lieff Cabraser Heimann & Bernstein, said

Centocor's document described a practice very similar to that used by

Tap Pharmaceutical Products in marketing Lupron.

According to court documents, Tap urged doctors to prescribe Lupron so

that they could benefit from the " spread " — the difference between the

Medicare reimbursement and what doctors paid for the drug.

Medicare is supposed to receive a discount on the prices that

pharmaceutical companies charge other customers. Medicare, therefore,

reimburses doctors for drugs at 95 percent of what is called the average

wholesale price. But investigators have found that some companies have

inflated the average prices reported to the government so that Medicare

reimbursements are higher than what the companies most often charge.

" Centocor appears to be engaging in the same unlawful marketing of the

spread that TAP did with Lupron, " Mr. Sobol said. " This has been an

issue of numerous federal and state investigations and private

lawsuits. "

Mr. Sobol has filed a lawsuit on behalf of a coalition of consumer

groups against more than two dozen drug makers that had been identified

by federal investigators as using this price spread to market their

drugs. Remicade is not part of the suit.

According to the federal government, Medicare's payments for Remicade

skyrocketed last year. Medicare paid at least $141 million for Remicade

last year — almost three times the $48 million the government paid for

the drug in 2000.

http://www.nytimes.com/2002/04/11/business/11DRUG.html