Gilead Sciences, based in California, has reported that it has laid aside $200 million for the possibility of resolving a long-running lawsuit, only a few weeks after it reached a settlement with the U.S. government for an unknown price to settle a patent dispute that had been going on for five years.
In the 10-K annual report that Gilead submitted to the Securities and Exchange Commission (SEC) last week, the company stated that it had accumulated around $200 million for the purpose of a prospective settlement of a government inquiry.
In 2017, the U.S. Attorney’s Office in Manhattan issued a subpoena to the firm, requesting “documents related to our promotional speaker programs for HIV,” as the company pointed out.
It was in the company’s 10-K securities report for 2017 that Gilead first recognized the subpoena.
The payments that pharmaceutical companies make to healthcare practitioners for speeches and other promotional efforts have been the subject of increased scrutiny by the government over the course of the last several years. TIn the interest of increased transparency, the Physician Payments Sunshine Act of 2010 mandated that businesses disclose the amount of money they devote to medical professionals.
In 2020, Novartis made a payment of $680 million to the government in a bid to resolve a lawsuit in which the prosecution alleged that Novartis had utilized several thousand of speaker sessions and events, some of which included extravagant dinners, as a means of concealing the fact that it had provided compensation to medical professionals. Prosecutors claim that the objective was to persuade medical professionals to prescribe the company’s medications more often.
Additionally, in 2020, Teva reached an agreement with the government to resolve a whistleblower case in which it was claimed that the firm paid physicians to appear at “sham” events in which there had been no attendance. The corporation committed to shelling out $54 million to settle the case. Copaxone, a medication for multiple sclerosis, and Azilect, for Parkinson’s disease, were reportedly prescribed by Teva to medical professionals in exchange for payment.
This will not be the firm’s first settlement this year; in mid-January, the company agreed to settle a long-running patent conflict with the U.S. government with the Department of Health and Human Services and Department of Justice.
The terms of the settlement were not revealed in the case concerning the government’s patents on Gilead’s HIV medications Descoy and Truvada for pre-exposure prophylaxis (PrEP). The government was contesting a federal court ruling that nullified its patents and two U.S. court judgments that determined the government violated contracts with Gilead.
