A subset of employees at Outcome Health, a Chicago-based tech and advertising startup, allegedly manipulated pricing and sales information to mislead pharmaceutical advertisers, according to The Wall Street Journal.
For its investigation, The Wall Street Journal reviewed internal documents and interviewed several advertisers and former Outcome Health employees. The Wall Street Journal found no evidence top executives were involved in the alleged misconduct.
Here are six things to know about the controversy.
1. Outcome Health, which reported a $5.5 billion valuation in May, installs flat screens and tablets in physicians' offices at no cost. These screens display patient-targeted videos including educational content and pharmaceutical advertisements.
2. Outcome Health charges pharmaceutical companies to run advertisements on its flat screens and tablets. However, from 2014 to 2016, employees at the company reportedly charged advertisers for more screens than it had installed, people familiar with the matter told The Wall Street Journal. Other accusations against the startup included employees allegedly manipulating performance surveys and third-party analyses.
3. Another alleged issue involved altering documents meant to verify whether an advertisement ran on an appropriate physician's screen. Some pharmaceutical companies requested Outcome Health deliver screenshots of an advertisement as proof it ran the content in the correct office. However, some employees would allegedly edit information, such as the timestamp, to inappropriately verify the document.
4. Outcome Health has given "tens of millions of dollars in free advertising to customers" after not meeting contractual terms, people familiar with the matter told The Wall Street Journal. In one instance, Johnson & Johnson allegedly complained after field representatives noticed the company was being charged to run ads in offices that did not have screens. In return, Outcome Health reportedly offered to decrease the advertiser's costs.
5. Outcome Health officials told The Wall Street Journal an independent counsel will review the allegations. Lanny Davis, a lawyer and spokesman hired by Outcome Health, told The Wall Street Journal the company put three employees on paid leave during the review.
"The company strongly denies the practice of misreporting of campaign information," he said. "The company's policy is to accurately report information to every customer on every program."
6. In an online statement emailed to Becker's Hospital Review, Outcome Health Founder and CEO Rishi Shah wrote, "If at any point we learn that a customer was misled in any way, we will share that promptly with the customer and remedy the situation immediately."
He continued, "We appreciate the hard work of our dedicated employees, and want to reiterate that adherence to our policies is not optional — anyone who violates them will be held accountable."