Ex-executive testifies that drug firm gave perks to doctors

A former top sales executive at TAP Pharmaceutical Products said yesterday that the company regularly lavished doctors with expensive gifts -- including big-screen TVs, season tickets to sporting events, and an all-expenses-paid trip to Italy -- to encourage them to prescribe the company's prostate cancer drug.

Douglas Durand, TAP's former vice president of sales, filed a whistleblower lawsuit in 1996 alleging that some members of the company's sales force were offering bribes and kickbacks to doctors.

Eleven current and former employees of Lake Forest, Ill.-based TAP are on trial in federal court, charged with violating health care fraud laws and illegal marketing practices.

As the chief whistleblower in the case, Durand received $77.9 million as part of an $875 million settlement the government reached with TAP in 2001. After lawyers' fees and taxes, Durand's net payment was about $42 million, he said. The 11 employees were not part of the company's settlement.

Testifying as the prosecution's star witness, Durand described a high-pressure sales culture at TAP in which sales representatives offered various inducements to get doctors to prescribe Lupron.

He said the company's executives frequently discussed how to persuade doctors to use Lupron rather than a less expensive competing drug, Zoladex.

During one teleconference, a proposal was made to pay TAP's top 300 Lupron customers a 2 percent "administrative fee" to get them to continue to use the drug rather than Zoladex.

Durand said one of the salespeople on the call said, "Are you people crazy? That would be a kickback. What if we got caught?"

He said the other executives on the call laughed, then Alan MacKenzie, one of the employees on trial, said, "How would Doug [Durand] look in stripes?"

Durand said he became nervous after that comment was made, and eventually contacted a lawyer about filing the lawsuit.

Under cross-examination, a lawyer for Donald Patton, a former vice president of sales for TAP, focused on the large payments Durand received in the TAP case and as a whistleblower against the company that made the competing drug, Zoladex.

"You sued Zeneca, too, isn't that right?" attorney William Kettlewell asked Durand.

"Yes, sir," replied Durand.

Durand also received $34 million in the whistleblower case against Zeneca.

He described a 1995 meeting with Thomas Hodgson, the former president of Abbott Laboratories, the company that owns 50 percent of TAP. Durand said Hodgson reprimanded him for arguing against a second price increase on Lupron that year. According to Durand, Hodgson "went on to say that these people had cancer and that they were going to die anyway, so let's do the increase."

After Durand's testimony about Hodgson, defense attorneys for the TAP employees said they are considering asking for a mistrial. Judge Douglas Woodlock said he would hear arguments on the request today.

Hodgson, who is now retired, has never been charged in the case. A spokeswoman for Abbott did not immediately return a call seeking comment.

Durand was expected to continue his testimony today with additional cross-examination by defense attorneys.

TAP Pharmaceutical is a 50-50 venture between Abbott Laboratories, of Abbott Park, Ill., and Takeda Chemical Industries Ltd. in Japan.