E-DRUG: Pfizer/WL to pay USD240m in illegal marketing case
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[Marketing unapproved indications is illegal; that's not uncommon, but that
the whistleblower gets USD 26m is interesting! Copied as fair use. WB]
http://www.nytimes.com/2004/05/14/business/14drug.html
Pfizer to Pay $420 Million in Illegal Marketing Case
By GARDINER HARRIS
Published: May 14, 2004
Pfizer, the world's largest pharmaceutical company, pleaded guilty yesterday
and agreed to pay $430 million to resolve criminal and civil charges that it
paid doctors to prescribe its epilepsy drug, Neurontin, to patients with
ailments that the drug was not federally approved to treat.
Of that settlement, $26.64 million will go to a former company adviser who
brought a lawsuit under a federal "whistleblower" law.
The company encouraged doctors to use Neurontin in patients with bipolar
disorder, a psychological condition, even though a study had shown that the
medicine was no better than a placebo in treating the disorder. Other
disorders for which the company illegally promoted Neurontin included Lou
Gehrig's disease, attention deficit disorder, restless leg syndrome and drug
and alcohol withdrawal seizures.
Although doctors are free to prescribe any federally approved drug for
whatever use they choose, pharmaceutical companies are not allowed to
promote drugs for nonapproved purposes. Neurontin was initially approved to
treat epileptic seizures in patients who had failed to improve using other
treatments, but it has become one of the biggest-selling drugs in the world,
with sales last year of $2.7 billion. Nearly 90 percent of the drug's sales
continue to be for ailments for which the drug is not an approved treatment,
according to recent surveys.
"This illegal and fraudulent promotion scheme corrupted the information
process relied upon by doctors in their medical decision-making, thereby
putting patients at risk," said the United States attorney in Boston,
Michael Sullivan, in a statement yesterday.
Pfizer, in a statement yesterday, said that the illegal marketing had been
conducted by Warner-Lambert before Pfizer acquired that company in 2000.
"Pfizer has cooperated fully with the government to resolve this matter,
which did not involve Pfizer practices or employees," the company said.
Pfizer took a $427 million charge in January against its fourth-quarter 2003
earnings to pay for the expected settlement. The government calculated that
the company's illegal promotions brought it $150 million in ill-gotten
gains. A standard multiplier was used to come up with the $430 million fine.
The case is one of many undertaken in recent years by federal prosecutors in
Boston and Philadelphia who are examining efforts by drug companies to
market their drugs for unapproved uses and pay doctors for prescriptions.
And while the pharmaceutical industry recently adopted voluntary guidelines
that have eliminated many of the gifts and payments once routinely dispensed
to doctors, the industry's aggressive promotions continue.
Companies continue to underwrite physician education seminars where
unapproved uses of their drugs are discussed. They continue to hire
advertising agencies to conduct clinical trials and ghostwriters to write up
the studies for experts listed as authors. And they often hire physicians as
consultants, arrangements that call into question a physician's independence
in deciding what drugs to prescribe for patients.
Other companies that have been fined for drug marketing abuses include TAP
Pharmaceuticals, which in 2001 paid $875 million - the largest such fine so
far. Last year, Bayer paid $257 million. Schering-Plough is currently under
investigation for its sales practices.
While the agreement announced yesterday clears Pfizer of any further
liability in the Neurontin matter, the government may still criminally
charge former Warner-Lambert executives who concocted and approved the
plans, according to the settlement. Documents in the case show that
Warner-Lambert's illegal marketing activities were approved by some of the
company's top executives.
The case had its origins in 1996 when Dr. David P. Franklin quit his job as
a medical adviser to Warner-Lambert's sales staff, after realizing that he
was being asked to promote Neurontin well beyond the condition for which
federal drug regulators had approved it. Dr. Franklin filed a lawsuit under
a Civil War-era whistleblower statute that allows private individuals to sue
on behalf of the government, with the prospect of sharing in any financial
awards.
His lawyer, Thomas Greene, said yesterday, "I hope this encourages other
employees of companies that see corporate wrongdoing to come forward and
expose it."
In an interview, Dr. Franklin said that he often sat in doctors' waiting
rooms with medical liaisons from other drug companies who were there to do
exactly what he was doing - promote unapproved uses of medicines. "What we
did was standard practice in the pharmaceutical industry," Dr. Franklin
said.
And although he has been out of the pharmaceutical industry for eight
years - he is now a marketing executive with the medical device maker Boston
Scientific - he scoffed at the notion that things have changed much in drug
marketing. "Ninety percent of Neurontin's sales are for patients for which
there is no proof that the drug works," he said. "There's been an explosion
of off-label drug use in the years since I left."
It is only after careful examinations of the results of expensive clinical
trials that federal drug regulators approve treatments for specific medical
conditions. While doctors can freely prescribe approved drugs for any
treatment, drug companies must carefully restrict their communications about
these so-called off-label uses, limiting themselves to handing out
scientific articles, for example, or hiring experts to give lectures to
physicians about the unapproved uses.
Warner-Lambert went beyond those strictures by flying doctors to Hawaii, the
1996 Olympics in Atlanta and Florida, paying them consulting fees and
providing expensive dinners at which unapproved uses of Neurontin were
discussed. The company also paid some doctors to allow sales representatives
to sit with them as they saw patients.
The patient visits were the last straw for Dr. Franklin, he said. He
recalled that the company distributed a voice mail message from a sales
representative who described the day he had spent with a physician and his
patients. "The sales representative said he explained to the physician with
the patient right there on the table why Neurontin was the best possible
medicine," Dr. Franklin said. "That's practicing medicine without a
license."
These marketing practices, though, were extremely effective, according to
internal company documents. Doctors who attended dinners given by the
company to discuss unapproved uses of Neurontin wrote 70 percent more
prescriptions for the drug than those who did not attend, one memorandum
showed.
Generic versions of the drug could be introduced later this year. Pfizer is
hoping to gain approval soon for a successor medicine called Lyrica, or
pregabalin, as a treatment for epilepsy and neuropathic pain. Internal
company documents show that Warner-Lambert executives decided against
seeking approval from federal drug regulators for other uses of Neurontin
for fear that generic versions would one day undercut sales of Lyrica.
Part of the government's rationale for bringing the case was that
Warner-Lambert's marketing schemes led physicians to prescribe to Medicaid
patients who should not have received the drug, costing federal and state
governments millions of dollars. Of the $430 million fine, $106 million will
go to the 50 states, which share with the federal government the costs of
the Medicaid program.
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