Lilly used nursing services as kickbacks to boost insulin prescriptions, lawsuit claims

After Novo Nordisk settled a lawsuit alleging it marketed certain drugs under a "white coat" sales scheme, fellow diabetes drug giant Eli Lilly is facing similar claims of illicit marketing. A recently unsealed lawsuit claims the company ran a "multi-tiered kickback scheme" to pump up sales of key blockbusters.

The lawsuit, filed in June and unsealed late last month, alleges Eli Lilly worked with Healthstar Communications and VMS Biomarketing to provide free nursing services to induce doctors to prescribe Lilly diabetes meds Humalog and Humulin, plus osteoporosis drug Forteo. The lawsuit also targets Covance and an Express Scripts unit, saying the two companies pitched into the setup by helping prescribers attain reimbursement. 

"While purporting to provide independent medical advice and disease-awareness information, the nurse educators were in reality acting as undercover sales reps for Lilly, focused on the mission Lilly had retained them to accomplish," the suit says. That mission, according to the lawsuit, was to refer the Lilly products to prescribers and patients. 

Eli Lilly representatives didn't immediately respond to a request for comment on the lawsuit. 

Express Scripts disclosed the lawsuit in a Tuesday SEC filing, saying it believes the company and subsidiaries are "in substantial compliance with applicable laws, rules and regulations in all material respects" but that it cannot predict the outcome. The same Express Scripts unit was named in a recent lawsuit over Mallinckrodt's controversial drug H.P. Acthar Gel and its huge jump in price over the years. 

Novo Nordisk in May settled a whistleblower lawsuit making similar allegations. That suit alleged that the company used certified diabetes educators to induce prescribers to use Novo drugs by offering educational programs and materials worth thousands of dollars. The company denied the allegations. 

In another similar case, Allergan in July paid out $13 million in a 2009 whistleblower suit over claims the company illegally promoted eye drugs—including Restasis, which has become controversial due to the company's recent tribal licensing deal—by providing valuable consulting and other services to doctors. 

The Novo case was kicked off by two whistleblowers alleging misconduct dating back to 2006. In the Lilly case, a unit of the research organization National Healthcare Analysis Group filed the suit on behalf of the federal and state governments. The group says it conducts hundreds of interviews every year to "form an understanding of industry practices" and that it believes the Lilly arrangement has resulted in "billions of dollars in improper reimbursements." The group is alleging violations of the False Claims Act.

The three meds under question in the Lilly suit were each among the drugmaker's top 5 products last year, together generating more than $5.5 billion in 2016 sales. 

Diabetes drugmakers have faced no shortage of scrutiny on pricing and marketing in recent years as list prices have steadily grown. In one class action suit, plaintiffs accused the companies of working with pharmacy benefit managers to increase costs and share the additional revenues. In turn, patients have been left with "crushing" out-of-pocket expenses, according to the suit. Several of the PBMs and drugmakers denied the allegations, while some didn't immediately respond to requests for comment, Bloomberg BNA reported at the time.