Corporate Compliance

U.S. Attorney indicts five in pharmaceutical sample misuse

Compliance Monitor, January 5, 2005

Three pharmacists and two physicians in Pennsylvania were charged December 27 with illegally selling and receiving reimbursement for drug samples that sales representatives unlawfully sold to them in the first place, the United States Attorney for the Eastern District of Pennsylvania announced.

"This is not only a deliberate violation of the law, but it is also an abuse of the trust and confidence consumers place in their physicians and pharmacists," U.S. Attorney Patrick L. Meehan said in a statement announcing the indictments. "This kind of behavior can have consequences for patients who have no idea that they're getting potentially expired and/or misbranded medication because their pharmacist or physician is trying to manipulate the system for his own financial benefit."

Meehan entered indictments against Mark Rubin, RPH, of Southampton; Bruce Goldberg, RPH, of Huntingdon Valley; Howard Dall, RPH, of Ambler; Richard Koff, MD, of Southampton; and Philip Lipson, DO, of Southampton. The allegations carry possible penalties ranging up to 20 years in prison and fines of $500,000 per person.

The first indictment names both Rubin and Goldberg, accusing the duo of paying cash for drug samples, removing them from individualized packaging, and incorporating them into the inventories at Summerdale Pharmacy, K&A Pharmacy, and Marcus Foster Pharmacy-Tioga. Not only does this represent financial fraud, but creates health risks for consumers because the original expiration dates and lot numbers are lost, impeding the ability to conduct effective recalls, the U.S. Attorney's statement said. Dall was indicted on similar charges.

Dall's attorney, Walter W. Cohen, told the Philadelphia Inquirer that his client has cooperated with the Department of Justice throughout the course of the investigation. "What is important is that no evidence exists that any customers were harmed" when they took the free samples, Cohen added.

Lipson and Koff were indicted in separate documents but on similar charges. The U.S. Attorney is alleging that each physician sold prescription drug samples to Rubin after Rubin approached them.

According to Bruce D. Armon, Esq., a partner in the Life Sciences group of Philadelphia-based Saul Ewing LLP, these actions by the U.S. Department of Justice may be part of a larger enforcement effort. Regardless, pharmaceutical companies and sales representatives need to take notice of such actions.

"Even though there appears to be no suggestion [in these indictments] that pharmaceutical companies acted inappropriately, it's clearly part of a federal enforcement effort to monitor the appropriate use of free drug samples," Armon says. "[The filings] underscore and reemphasize a need for pharmaceutical manufacturers and their sales representatives to have policies and procedures in place that relate to drug sample distribution and accountability.

"Training the representatives is important, as is making sure there are policies in place and monitoring of those policies to make sure the [sales representatives] are not participating in any activities that could lead to other inappropriate activities," Armon says.

The allegations of violations of the Prescription Drug Marketing Act of 1988 (PDMA) were filed in four separate documents. Meehan's statement pointed out that the PDMA was enacted because the system of providing drug samples to physicians had been "abused for decades."

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