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TAP's federal fraud case begins

Compliance Monitor, April 21, 2004

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Opening remarks began Tuesday in the federal fraud case against 11 current and former sales officials from TAP Pharmaceutical Products Inc., according to the Chicago Tribune.

The defendants, including three senior corporate executives, are being tried in U.S. District Court in Boston on charges that they conspired to pay kickbacks to physicians and hospitals in the marketing of Lupron, TAP's prostate cancer treatment. The criminal investigation has lasted seven years.

The trial, which could last up to six months, falls 2.5 years after TAP, based in Lake Forest, IL, paid a record fine of $885 million and pleaded guilty to a criminal charge of conspiring with doctors to bill government insurers for free samples of Lupron.

TAP was allegedly involved in gift-giving, which prosecutors say included golf outings at luxury resorts, educational grants, and lavish Christmas parties. The sales team allegedly used these tactics to lure physicians into prescribing Lupron at the expense of government health-insurance programs.

The Tribune reported that defense attorneys plan to say that gifts were given in good faith, and that they were signed off on by higher-ranking executives as well as company attorneys, so there was no criminal intent.

Douglas Durand, a former TAP vice president and one of the two whistleblowers in the case, is expected to testify early in the course of the trial.

TAP is a joint venture of North Chicago-based Abbott Laboratories and Japan's largest drugmaker, Takeda Chemical Industries of Osaka.

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