Editor’s note: Reuters reported on Jan. 28 that “Pharma Co. X” referenced in this story is Purdue Pharma.
BURLINGTON — An electronic health records company is paying the largest criminal fine in Vermont’s history, stemming from allegations it illegally took a kickback from an unnamed pharmaceutical company in an effort to sell more of its “extended release opioid” medications.
U.S. Attorney Christina Nolan announced the penalty against Practice Fusion Inc. as part of the agreement at a press conference Monday.
The San Francisco-based company will pay $26 million in criminal fines and forfeiture, an additional $1 million for the value of the kickback it took and another $118.6 million to the federal government and all 50 states to resolve the kickback allegations, totalling nearly $145 million.
The state of Vermont will only receive $47,998 from the settlement, according to Kraig LaPorte, a spokesperson for the U. S. Attorney’s Office.
A civil claim alleging Practice Fusion falsified evidence to federal regulators about its electronic health records software when seeking certification for it was also resolved, Nolan said.
The resolution marks the first instance in the nation of a criminal kickback involving an electronic health records vendor and a pharmaceutical company and the first criminal resolution of any kind against an EHR company, Nolan said.
Nolan said the conspiracy between the two companies led to Practice Fusion taking a $1 million kickback from “Pharma Co. X” for building its software to push doctors to prescribe dangerous opioids to patients, in violation of the federal Anti-Kickback Statute.
That law prohibits solicitation and receipt of payment in exchange for the recommendation of any goods paid for by federal health care programs, Nolan said.
Investigators found that Practice Fusion had taken the $1 million kickback to create and embed an alert notice into its electronic health records system. The alert would prompt doctors — while meeting with their patients — to suggest treatments, including prescribing opioids, without regard for Centers for Disease Control and other accepted medical guidelines about opioids.
Nolan said the “abhorrent” behavior by Practice Fusion came at the height of the U.S.’s opioid crisis. In 2016, approximately 42,000 Americans died from opioid overdoses, of whom, Nolan said, 40% were prescribed the drugs. Deaths rose to about 47,600 in 2017.
In March 2016, Nolan said the CDC rolled out new guidelines relating to opioid prescribing, which said opioids should be prescribed as a final alternative and should start with lower doses of “immediate release opioids” which are less harmful and addictive than the extended release drugs manufactured by Pharma Co. X.
“Practice Fusion decided to monetize its presence in the physicians’ exam room by selling to pharmaceutical companies the opportunity to prompt physicians to take certain clinical actions,” Nolan said.
Practice Fusion worked with the pharmaceutical company to draft the language in these prompts which encouraged doctors to prescribe the drugs, and in some cases, even when the condition of the patient did not rise to the need for powerful painkillers.
The investigation revealed that Practice Fusion had originally intended for its alerts to advise doctors and patients about the risks of opioids. But Pharma Co. X, which was seeing a dramatic decline in sales, “was uninterested in such [an] alert,” Nolan said.
Instead, the two worked together to boost sales of the opioids.
Nolan’s office found Practice Fusion and the drug company had conspired to target people who were “opioid naive” — those who had never been prescribed an opioid — and to encourage doctors to move patients using the immediate release drugs to the extended release drugs. Investigators also pointed to internal communications that showed a clear goal on the part of the pharmaceutical company to switch patients to the more dangerous drugs to boost profits.
“Practice Fusion told Pharma Co. X that it could create a CDS alert in its [electronic health records] that would prompt doctors to take action that would achieve those brand objectives,” Nolan said.
Furthermore, Practice Fusion calculated the proposed financial impact to the drug company during its pitch. Practice Fusion claimed the alerts could bring upwards of 2,777 new extended release opioid patients, resulting in an $8.4 million-$11.2 million revenue increase.
When the alert system was implemented, Nolan said, pop-up messages would encourage the doctor to conduct tests and ask questions about a patient’s pain level. Keeping pain forefront in the minds of doctor and patient would lead doctors to prescribe more opioids, meeting Pharma Co. X’s marketing goals.
“So, in exchange for nearly $1 million, Practice Fusion effectively placed the pharma company pushing opioids into the exam room to have pharma’s thumb on the scale at precisely the moment doctors were making hugely important decisions about people’s medical care,” Nolan said.
The alerts were live from July 2016 to April 2019 and only ceased when Nolan’s office informed Practice Fusion of the impending criminal charges. Through that time, the alerts were triggered during nearly 230 million patient visits across all 50 states. It is unknown how many Vermonters were directly affected.
Civil charges under the False Claims Act alleged Practice Fusion falsely provided information about its EHR software to federal regulators while trying to achieve certification for its system.
In addition to the hefty fines and forfeitures, Practice Fusion has agreed to comply with ongoing government investigations. It will publish all documents relating to the underlying crimes on a public website at its own expense.
There was no determination of liability against the pharmaceutical company in the civil case, a press release from Nolan’s office said.
Nolan said it’s consistent practice for the Department of Justice not to name unindicted co-conspirators “unless and until you’re ready to charge” them, speaking about Pharma Co. X. Nolan also would not confirm or deny any ongoing or future investigations.
This is the such third case Nolan’s office has prosecuted. Last year, Nolan announced a $57.25 million settlement with Greenway Health over claims the firm caused medical providers nationwide to submit false claims to the government and provided kickbacks to users. In 2017, the Vermont U.S. Attorney’s Office announced a $155 million settlement over fraud allegations with a Massachusetts-based electronic health records company.
Nolan said this case and others her office has prosecuted should “put everyone on notice.”
“Policymakers, regulators, companies — don’t taint the doctor-patient relationship, don’t infiltrate the doctor-patient relationship,” Nolan said. “That’s a sacred relationship that should be based on people’s health and longevity.”