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The TAP Pharmaceutical Acquittals

By Robert W. Tarun
February 24, 2005

In 2001, the U.S. Attorney in Boston charged TAP Pharmaceutical Products Inc. (TAP) with conspiring to provide urologists with thousands of free samples of Lupron', for which the doctors billed Medicare and their patients. In order to survive and continue selling its blockbuster product for advanced prostate cancer, TAP made a reasoned decision to pay the government $885 million to resolve both civil and criminal charges. With this resolution, Boston's talented federal prosecutors continued their remarkable success in bringing major pharmaceuticals to their knees and reaching landmark settlements.

Multi-Pronged Conspiracy

Drawing far less attention was the related indictment of six TAP managers from five states as well as a Massachusetts urologist. Five other TAP employees were later charged under what Judge Learned Hand once described as the “darling of the prosecutor's nursery” — the general federal conspiracy statute. The three-pronged count alleged a broad conspiracy to defraud Medicare, to violate the Anti-Kickback statute, and to violate the Prescription Drug Marketing Act (PDMA). The Medicare prong alleged that TAP failed to charge its best price, while the anti-kickback prong alleged that TAP gave things of value, including free samples, “educational grants,” trips to resorts, free consulting services, medical equipment and forgiveness of debt to physicians and others to generate Lupron prescriptions for Medicare beneficiaries. The PDMA prong alleged that TAP caused thousands of free samples worth over $400 each to be billed to Medicare. Boston prosecutors had already negotiated guilty pleas with three urologists, obligating them to testify in what became the biggest health care trial in the country in 2004.

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