Merck KGaA Settles, Again

They just keep marching along, legal settlements, that is.  The latest entry in the parade is Merck KGaA (of Switzerland, not to be confused with the American Merck and Co, Inc), as per the AP, via ABC News:

The Department of Justice said Wednesday that multinational drugmaker Merck Serono SA has agreed to pay $44.3 million to settle allegations that it illegally promoted one of its drugs using kickbacks to doctors.

Federal prosecutors said that Merck Serono and EMD Serono allegedly made inappropriate payments to hundreds of doctors for prescribing its multiple sclerosis drug, Rebif, between 2002 and 2009. Merck Serono paid to send doctors to various training meetings and conferences at upscale resorts and other locations, according to the Department of Justice.

Of course, while agreeing to pay out the money, the company denies everything:

The company pointed out in a statement: 'the settlement contains no claims that unnecessary prescriptions for Rebif were written, no allegations of patient harm and no admission of fault by the company.'

One wonders whether $44 million is now such a trivial amount to a large health care corporation that companies are willing to pay so much just to avoid the inconvenience of a trial? Or did perhaps the company leadership worry it might lose this trial?

Note that regardless of the above company statement, the US Department of Justice asserted that the company made "improper payments" to physicians "For prescribing its drugs." So, unlike some of the many settlements we have discussed which involved only financial improprieties, this one allegedly involved actions that corrupted physicians.

As we have noted previously, Transparency International defines corruption as "abuse of entrusted power for private gain." Physicians are entrusted to make decisions for individual patients for the patients' good. Accepting payments from a drug company to prescribe a particular good appear to be an abuse of such entrusted power, obviously for private gain. So the sorts of behavior that allegedly resulted in this settlement are particularly pernicious for medical professionalism, as well as for the good of patients.

Nonetheless, despite protestations that they are going to get tough, US law enforcement seems unwilling to hold any individual accountable for this sort of behavior. Granting individual impunity, though, seems to provide no deterrent against future bad behavior. 

For example, as we noted here, Merck KGaA had to pay a settlement last year of claims that its previous subsidiary, Mylan, reported falsely inflated claims.  That legal action also imposed no negative consequences on individuals.  This legal action had been in the works since at least 2007, but as noted above, the actions that lead to the current settlement continued through 2009. 

So, to repeat, repeat, repeat: 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.

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Mylan Settles, Merck KGaA Pays the Fine

The parade of legal settlements involving large health care organizations accused of wrong-doing just gets more and more crowded.  Here is the latest, courtesy the Pittsburgh Tribune-Review:

Mylan Inc., a generic-drug manufacturer in Cecil, agreed to a $280 million settlement of allegations that its Dey Inc. specialty-drug subsidiary cheated the government out of millions of dollars by reporting falsely inflated payments for several drugs, the Justice Department said.

'The government paid millions of claims for far greater amounts than it would have if Dey had reported truthful prices,' the Justice Department said.

Mylan acquired Dey when it purchased Merck KGaA's generic-drug business in October 2007 for $6.8 billion. The government's action began before Mylan acquired Dey.

Dey said in a statement that Merck KGaA is responsible for paying the full amount of this settlement as well as all costs and other expenses associated with pending and future related Medicare and Medicaid reimbursement lawsuits involving Dey.

It all gets so tiresome, doesn't it. However, before one starts yawning, remember how such settlements are markers of the prevalence of bad behavior by major health care organizations. The continuing parade of settlements thus is a big clue that there is something very rotten going on in health care, that the leadership of health care is increasingly amoral, greedy, and lawless.

Here again is our generic statement on the phenomenon:  As in many previous cases, note that the monetary cost of the above settlement, while it seems large to normal humans, would be just slightly more than round-up error for a large multi-national company.  As I have said repeatedly,  penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.  As long as the bad behavior continues, expect health care costs to continue to rise, while access falls, and quality suffers.  True health care reform requires accountability, integrity, and transparency of health care organizational leadership.

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