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Federal prosecutors in Boston have collected more than $2 billion in criminal fines and civil penalties from drug companies in the past three years for health care fraud, but only one of 20 indictments has led to a conviction in any of the three trials. That record has led to criticism by defense attorneys that the Boston-based health care fraud unit — one of five in the U.S. Department of Justice — is overly aggressive in its charging decisions. In trials, nine people have been acquitted, three have had their charges dismissed during trial and only one person has been convicted, asserted William Kettlewell of Boston’s Dwyer & Collora, who has been involved in all three trials. Three people have pleaded guilty to misdemeanors after being charged with felonies. Two have had their charges dismissed before trial. One trial is pending, and one plea to a felony is now the subject of an order for the prosecutors to show cause why it shouldn’t be withdrawn. A spokeswoman for the U.S. attorney’s office did not respond to requests for the office’s indictment and conviction rate. Last week, two vice presidents and six salespeople employed by TAP Pharmaceuticals Inc. were acquitted of conspiring to give kickbacks to doctors to induce them to prescribe the company’s drugs. The company had paid $885 million to settle criminal charges and a civil suit alleging that it had created the schemes that the acquitted employees had carried out. Because the jury got to hear about the civil settlement, the defense lawyers claim the outcome of the trial was a stunning victory. Defense lawyers contend that the fraud unit is successful largely because drug companies are compelled to settle civil cases and plead guilty in criminal cases or face the possibility of closing shop. “A company has no choice — they have to settle no matter how minor their exposure may be because the threat of debarment is so great, even for relatively minor conduct,” asserted David Stetler of Chicago’s Stetler & Duffy, who represented lead defendant Alan MacKenzie, a TAP vice president. Medicare will not pay for any drug marketed by a barred company. “A company has a legal gun to its head: They can win on 99 percent of the charges and lose on a relatively minor charge and they bet the company and they bet it the wrong way,” Stetler said. Another defense attorney put it more succinctly. “The threat of Medicare exclusion is a corporate death sentence,” said Robert Ullman of Boston’s Nutter McClennen & Fish, who represented a sales manager. “It’s a risk that publicly held companies won’t take, so the defenses to these large health care cases never get aired unless defendants take the case to trial.” Neither Michael Loucks, lead prosecutor and chief of the Boston health care fraud unit, nor anyone in his office would comment on the TAP case because of the pending trial of the only doctor named in the indictment. The indictment charged three theories of conspiracy: • Defrauding Medicare and Medicaid by giving away drug samples, forgiving debt and paying consulting fees to doctors and HMOs to induce them to prescribe Lupron, a prostate cancer drug, and Prevacid, an acid reflux medication. • Giving kickbacks in cash and kind to get doctors to prescribe the drugs. • Causing the sale of samples of Lupron. In other words, allegedly telling doctors that they could bill Medicare for the free samples they dispensed to their patients as if they had purchased them. After the conclusion of the three-month trial, the jury was instructed only on the kickback scheme. The civil settlement came into evidence because two whistle-blowers who testified had earned more than $100 million under provisions of the False Claims Act. But Judge Douglas Woodlock did not let in TAP’s criminal plea. Leonard Post is a reporter with The National Law Journal, a Recorder affiliate based in New York City.

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