— This past week in healthcare investigations
Doc Re-Used Devices for Nasal Surgeries
North Carolina otolaryngologist Anita Louise Jackson, MD, has been convicted of re-using devices to perform more than 1,400 surgeries for Medicare patients, the Department of Justice (DOJ) announced.
A federal jury found Jackson guilty on charges of adulterating medical devices for use on patients with intent to defraud and mislead, fabricating medical records, paying illegal remunerations, mail fraud, and conspiracy, the DOJ said.
“This doctor put profit ahead of patients, luring in Medicare patients with free ‘sinus spas’ and risking infection to those patients by reusing the same single-use surgical devices on them again and again,” U.S. Attorney Michael Easley said in a statement. “If we allow doctors to bilk Medicare to pad their profits by performing unsupported medical procedures — each and every American taxpayer eats the cost. But the harm is most felt by the victim-patients who deserved better, and the elderly Americans on Medicare who are entitled to quality care.”
Jackson operated a North Carolina practice with offices in Raleigh, Lumberton, and Rockingham, the DOJ said. Between 2011 and 2017, she performed 1,555 balloon sinuplasty surgeries on 919 Medicare beneficiaries. However, between 2012 and 2017, Jackson obtained, at most, 36 new devices for those procedures despite at times being the top-paid Medicare provider of balloon sinuplasty services in the U.S.
Between 2014 and 2018, Jackson billed Medicare more than $46 million dollars for balloon sinuplasty procedures, netting more than $4.79 million from those surgeries alone, the DOJ said, noting that the amount of monies received does not include those from procedures performed on patients with private healthcare insurance, other than Medicare, or those received from Medicare prior to that time. The jury ordered forfeiture of more than $4.79 million.
Jackson faced charges for related crimes as well, the DOJ said. Ultimately, the jury convicted Jackson on all 20 counts in the indictment.
Among the convictions, the DOJ said in part that mail fraud carries a maximum term of imprisonment of 20 years as well as that aggravated identity theft carries a 2-year mandatory prison sentence, consecutive to any other punishment.
Humira Patent Game
AbbVie, the drug company behind the blockbuster drug adalimumab (Humira), utilized a “savvy but legal exploitation of the U.S. patent system” in order to block competitors from entering the market, according to the New York Times.
Humira marks “the most lucrative franchise in pharmaceutical history.” The monopoly has generated $114 billion in revenue for AbbVie since the end of 2016, the Times reported, with Humira’s list price topping $80,000 a year. However, now, Amgen’s biosimilar Amjevita has come to market in the U.S., and as many as nine more competitors are expected to follow this year, including a product from Pfizer.
“Prices are likely to tumble” as a result, the Times reported. But what has taken so long?
“AbbVie orchestrated the delay by building a formidable wall of intellectual property protection and suing would-be competitors before settling with them to delay their product launches until this year,” the Times wrote. “The strategy has been a gold mine for AbbVie, at the expense of patients and taxpayers.”
Though AbbVie did not invent the strategy, and other pharma giants have used similar tactics, AbbVie’s success related to Humira stands out, the Times reported.
“Humira is the poster child for many of the biggest concerns with the pharmaceutical industry,” Rachel Sachs, a drug pricing expert at Washington University in St. Louis, told the Times. “AbbVie and Humira showed other companies what it was possible to do.”
A spokesperson for AbbVie declined the Times‘ request for comment. However, the outlet noted that the drug company’s lawyers have previously said it is acting within the parameters of the U.S. patent system.
As competitors come to market, it’s not yet clear how much the products will ultimately cost and how quickly patients may be able to switch to them, the Times reported. However, in the meantime, AbbVie will have another way to make more money.
“Under the terms of the legal settlements it reached with rival manufacturers from 2017 to 2022, AbbVie will earn royalties from the knockoff products that it delayed,” the Times wrote.
Nonprofit Hospitals Run Like For-Profit Businesses
When it comes to nonprofit hospital across the U.S., many have deviated from their charitable roots, behaving more like for-profit companies and sometimes to the detriment of patient health, a New York Times investigation found.
The Times investigation — as detailed by investigative business reporter Jessica Silver-Greenberg on a recent episode of the Times podcast The Daily — noted that nonprofit hospitals receive generous tax breaks from the Internal Revenue Service (IRS), with the premise that facilities are then supposed to do a number of things to benefit the communities they serve, sometimes including providing free care to patients who can’t pay.
At the same time, the Times investigation revealed that many nonprofit hospitals have large amounts of cash, similar to what big-name, for-profit companies might have, Silver-Greenberg noted on the podcast. They also revealed the existence of programs where nonprofit hospitals attempt to extract money from patients — even those who are supposed to receive free care.
Other findings of the Times investigation included big paychecks for nonprofit hospital executives as well as allegations of using monies from smaller facilities to support larger, wealthier ones within the same health system.
The Times further found that hospital executives often point to the need to be in a strong financial position to survive and fulfill their facilities’ mission, Silver-Greenberg noted on the podcast. Executives have also justified profit-seeking behavior by saying that they want to expand, and provide more care to more individuals. In order to do that, hospital executives have said they have to compete for investors and try to borrow money at low interest rates.
However, in cases of nonprofit hospitals operating more like a for-profit entities, there may also be detriment to patient health, the Times investigation found.