Speak No Evil: Lavish Speakers’ Programs for HIV/AIDS Doctors Leads to $202M False Claims Act Settlement

Gilead Sciences, Inc. has agreed to pay $202 million to settle allegations raised by whistleblower Dr. Paul Bellman that Gilead violated the False Claims Act and Anti-Kickback Statute by engaging in a nationwide scheme to offer remunerations worth millions of dollars to hundreds of healthcare providers in return for the prescription of their HIV/AIDS treatment products.

Specifically, in his qui tam complaint, whistleblower Paul Bellman, MD, a physician who devoted his career to the care and treatment of patients suffering from HIV/AIDS, alleged that Gilead provided extravagant speaker fees, dinners, and travel to vacation spots to induce or reward the prescription of six of Gilead’s drugs and thereby boost the sale of those drugs.

During a six-year period between 2011 and 2017, Gilead conducted HIV Speaker Programs to promote and boost the sale of its HIV drugs, which are very expensive. For one drug, Complera, the cost was in excess of $1,000 per month and significantly more for other Gilead HIV/AIDS drugs.  Many of the physician attendees at Gilead’s speaker programs were repeatedly allowed to attend lavish dinner programs on the same topic thereby obtaining free meals for events with diminishing educational value. 

More than 250 prescribers of the Gilead HIV Drugs attended HIV Dinner Programs on the same topic three times or more within a six-month period.  And over 80 of them attended five or more HIV Dinner Programs on the same topic within a six-month period. Given that Gilead held 157 HIV Speaker Programs at the James Beard House in New York City, which typically included a six-course meal with wine pairings, it is no wonder why physicians were willing to sit through the same content multiple times as was the case with one group of doctors who attended multiple events together.

The government’s press release called out the failure of Gilead’s compliance program to prevent this behavior despite Gilead’s knowledge that it had to comply with the Anti-Kickback Statute, noting that Gilead’s own data should have put it on notice of the wrongdoing.   

The Gilead settlement is unusual in that instead of not admitting to any wrongdoing, which is the approach routinely taken by settling defendants in False Claims Act cases, Gilead made extensive factual admissions regarding their conduct, admitting to the core kickback allegations raised in the whistleblower’s complaint. 

Kickback schemes are not victimless, noted FBI Assistant Director in Charge Christopher Raia in the government’s press release, a statement that is particularly true in this case.  As Dr. Bellman’s complaint alleges, Gilead’s illegal conduct not only undermined physicians’ ability to exercise their own independent and impartial judgment when making prescription decisions, it also threatened the health and safety of HIV/AIDS patients.  

According to Dr. Bellman, Gilead’s kickbacks to targeted physicians induced them to switch patients from affordable, well-established drug cocktails that successfully controlled the virus to Gilead’s newest combination drugs that often cost more than $40,000 per year for each patient and risked exposing specific patients to health hazards, such as kidney damage from Gilead’s HIV drug Stribild, that were unnecessary for effective, safe HIV treatment.  

In addition to the whistleblower, the prosecution of this case involved a who’s who of government agencies, including the USAO for SDNY, DCIS, the FBI, HHS-OIG and the New York Medicaid Fraud Control Unit.

In the DOJ press release, newly appointed U.S. Attorney  for the Southern District of New York Jay Clayton stated, “For years, Gilead unlawfully sought to increase sales of its HIV drugs, by using its speaker programs to funnel kickbacks to doctors. As alleged, Gilead spent tens of millions of dollars on these programs, including over $20 million in speaking fees and millions more in exorbitant meals, alcohol, and travel, all in an effort to induce doctors to prescribe Gilead’s HIV drugs and drive up sales. With this settlement, Gilead has taken responsibility for its conduct and agreed to pay a significant financial penalty. The message is clear, companies that illegally drain taxpayer dollars from federal healthcare programs will be held accountable.”