Former Pharma Exec Heads To Trial On Kickback Allegations

Interesting to note that, despite leading to a 3 Billion dollar fine, and despite immense detail and its huge scope, Whistle-Blower Greg Thorpe’s 7th Amended Complaint resulted in no jail time for any GSK executives. In retrospect it seems that GSK’s 3 billion fine was a slap on the wrist for GSK (and perhaps the revolving door between GSK and the department of justice had something to do with that?) and then it was business as usual.  Until high level executives in these corrupt companies are held to account for their role in these scams, nothing will change…

Former Pharma Exec Heads To Trial On Kickback Allegations

By Ed Silverman @Pharmalot

May 17, 2016

Between 2009 and 2012, W. Carl Reichel allegedly orchestrated a campaign to give doctors money, free meals, and phony speaking fees in exchange for prescribing medicines sold by Warner-Chilcott, where he had been the president of the pharmaceutical division, according to federal prosecutors.

Next week, he goes on trial in what is expected to be a closely watched case in the pharmaceutical industry. That’s because the case marks one of the relatively few instances in which federal prosecutors have sought to hold a high-ranking executive from a drug maker accountable for such activities.

“To the extent the executive is convicted, it will impact the industry,” said Anne Walsh, a former associate chief counsel at the US Food and Drug Administration who is now a director at Hyman, Phelps & McNamara, a law firm that specializes in regulatory matters.

To be sure, other drug company executives have faced penalties for illegal activities. Notably, three former executives at Purdue Pharma pleaded guilty in 2007 to misleading the public about the risk of addiction posed by the OxyContin painkiller. They were also banned from any dealings with federal health care programs, notably, Medicare and Medicaid.

But such instances are relatively rare in the pharmaceutical industry, even as a parade of drug makers has paid large fines for civil and criminal violations. Moreover, the Reichel trial gets under way just eight months after the US Department of Justice issued a memo that serves as a blueprint for pursuing individuals who engage in corporate malfeasance.
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There is now a “more uniform, systematic, and sustained focus on individuals,” said Sally Yates, a US Deputy Attorney General at a New York City Bar Association meeting last week. She originally issued the DOJ memo.

“There is one system of justice — one in which wrongdoers can and must be held accountable based on facts and evidence, not on position or title, power or wealth,” she said.

The emphasis on individuals also emerges after a drop-off in the number of settlements that the Justice Department has reached with drug makers for illegal activities, such as paying kickbacks to physicians or illegally marketing medicines. From a high of 18 deals in 2013, which capped a rising trend, the number of settlements fell to 11 last year, according to data compiled by Public Citizen.

In the Reichel case, the feds allege that he developed and oversaw an illegal strategy to boost prescriptions for several drugs, including the Actonel osteoporosis treatment and the Doryx acne medicine. Among the charges: Reichel provided sales reps with unlimited expense accounts in order to wine and dine doctors, and he suggested targeting doctors who were already frequent prescribers, according to the indictment.

He faces no more than five years in prison, three years of supervised release, and a fine of $250,000. We asked his attorney for comment and will update you accordingly.

“I think the Justice Department needs and wants to send a signal,” said Patrick Burns of Taxpayers Against Fraud, a nonprofit that that advocates for tough penalties and is partially funded by attorneys. ”I hope this will become a larger effort to bring personal accountability to corporate suites, because if they bring pain to the executive, it will bring change to the corporation.”

At the time that Reichel was indicated last fall, Allergan, which now owns Warner-Chilcott, agreed to plead guilty to health care fraud and pay $125 million to resolve criminal and civil charges in connection with illegally promoting several drugs, according to the settlement.

Three former sales managers — Timothy Garcia, Landon Eckles, and Jeff Podolsky — also pleaded guilty for directing sales reps to access confidential patient data after insurers denied coverage for the drugs. The company sought the patient data in order to submit what are called prior authorization forms, which refer to specific requests made by doctors to insurers to provide coverage for a medicine.

They each face no more than 10 years in prison, three years of supervised release, and a fine of $250,000. Their respective sentencings will not occur until between July and September.

Ed Silverman can be reached at
Follow Ed on Twitter @Pharmalot


One comment

  1. High plains drifter

    I am sick and tired of TAF…so called Taxpayers Against Fraud saying what should be done in these cases. They are not partially funded by attorneys. I would say they are for the most part TOTALLY funded by attorneys and while Patrick Burns calls for tougher action !–!-
    his “nonprofit “, which actually is quite profitable for the attorney group…coddling up to the Department of Justice, having high ranking Pharma investigators at DOJ speak in exotic, costly forums, including the Attorney General.

    This group only exists to keep the cost of filing a qui tam FCA complaint as high as possible..they grab over 50 % of the award to some whistle-blowers . …while the government is allowed to put illegal 9 year seals on cases, while gutting the guidelines of FCA law.
    So they all gladly contribute, have yearly extravaganza events at taxpayer expense, all over the planet.
    It is a write off for them, and then each year they name some me too attorney, like Erika Kelton their “attorney of the year”..while at the same time, the “giant killer”and founder, John Phillips tells me when I first wanted them to take the GSK case in Feb 2002. “WE DO NOT BELIEVE OFF LABEL MARKETING IS FRAUD”.
    Later, his firm, under Erika Kelton files essentially the same information I gave them, after I had to get inexperienced help to file the case…and they found out.
    So two ex GSK employees are recruited to become whistlblowers instead of me.
    …one Matt Burke, a Regional GSK manager, terminated for the very things I told the company about OFF LABEL MARKETING. So they threaten their way into the case as second to file, with a complaint mirroring the things I gave them 8 months before I filed in Jan. 2003.

    Phillips and Kelton wrote me that ” OFF LABEL MARKETING IS NOT FRAUD”.
    I have the letter for anyone to read, including Burns..who has talked tough, yet done absolutely nothing about it regarding
    Pharma execs…
    This is a true tax exempt monopoly, preying on Whistlblowers and letting the government get by with the pitiful settlements, and settling for an easy buck. All they have to do is march in lockstep with the fraud they know that occurs in the prosecution of all these Pharma companies, not just GSK.
    This group of self appointed Kings of Qui Tam Whistleblowers is more corrupt or just as corrupt as big Pharma, hiding behind tax exempt status and handing out huge Quid pro quos to the Department of Justice. …only so they can make their huge money grab, while they essentially sit on their asses and let the gov’t conspire under seal for 9 years, as in my case.

    In spite of the efforts of my excellent attorneys… Kenney, McCafferty firm with Tavy Deming and Emily Lambert, (by the way also TAF members, of necessity I believe, not choice) the government has set up a situation where again TAF gets its tax exempt status (bullshit), and in return does NOT dare rock the boat of the Ship of Fools at DOJ, who in fact make money for big Pharma…not reach any logical, reasonable settlements for the defrauded taxpayers under the FCA. Again just follow the money, all smoke and mirrors and in the end an Attorney who wrote me in part —
    “OFF LABEL MARKETING IS NOT FRAUD”, Erika Kelton ,”Queen of Qui Tam Law”
    is named Attorney of The Year by TAF.

    So long story short, do something or quit talking out of both sides of your mouth Burns, and everyone else at TAF.
    I know the truth, and you should be investigated. ..right along with the killers in big Pharma.

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