California insurance commissioner files suit against AbbVie, claims widespread kickback scheme to promote its blockbuster Humira
Shares of AbbVie $ABBV took a hit on Tuesday afternoon after California Insurance Commissioner Dave Jones filed suit against the pharma giant, alleging that the company engaged in an elaborate and extensive kickback scheme to persuade physicians to prescribe Humira — their big blockbuster and the most lucrative drug on the market today.
The suit, which was heavily redacted, included claims that AbbVie offered doctors a range of incentives — including gifts and trips — along with an extensive nursing program that put company paid “ambassadors” in the homes of patients to help guide their care:
These Ambassador save physicians time, money, and resources. At no cost and considerable gain to the physician’s office, AbbVie nurses provide patient care, pharmacy and insurance authorization assistance, open enrollment resources, paperwork help, advice on insurance products, and other services, all of which provide a substantial value, so long as the doctors prescribe AbbVie’s drug instead of selecting another course of treatment.
Citing a whistle blower — former company representative Lazaro Suaro, who helped as a trainer in the nursing program — the commissioner claimed that AbbVie provided a host of services for the doctors at no cost, including software and prior authorization assistance, which amounted to a kickback involving free professional services.
AbbVie stock was down more than 2% before the market closed.
The state went on to cite the $1.3 billion in payments the state’s insurers had made to cover Humira dating back to the beginning of 2013, demanding $10,000 for each of nearly a quarter million claims with total damages ranging in the billions of dollars.
The state also went out of its way to spotlight the lawsuit, filed in a state courthouse.
AbbVie made $18.4 billion from Humira sales last year, and with a clear runway that stretches out several more years in the US, the company has made it clear that they expect to see that number swell by 2023.
Image: AbbVie facility in Cambridge, Massachusetts AP Images