Journal News Editorial May 16, 2004

Perhaps the scariest thing about Pfizer Inc.'s decision to pay a jaw-dropping $430 million in fines to settle charges of medical fraud in the promotion of the best-selling drug Neurontin is that the hefty sanctions just might not be enough to deter such common, dangerous, profit-driven deceit.

Manhattan-based Pfizer on Thursday pleaded guilty to criminal fraud and agreed to the fine, which includes a $240 million criminal fine, to account for the marketing abuses of drugmaker Warner-Lambert, purchased by Pfizer in 2000, three years after the case began. Another $152 million in civil fines will be shared among state and federal Medicaid agencies, $38 million will go to state consumer-protection agencies and nearly $27 million will go to a former Warner-Lambert employee who blew the whistle on the objectionable practices.

When will the kind of fundamental reforms and transparency that changed marketing practices on Wall Street visit the pharmaceutical industry? Patients and honest doctors are very often left to the mercy of the ethically bankrupt, whose advice is informed by personal gain and profit, without any regard to patient well-being.

Former Warner-Lambert employee David Franklin filed a claim under the U.S. False Claims Act, which allows private citizens to sue on behalf of the government and secure a share of any awards. Franklin was well-positioned as a whistle-blower: At Warner-Lambert, he told USA Today, "I was the individual paid to lie to doctors"  about prescribing the drug for uses for which it was neither safe nor effective. He quit after four months, but not before securing company documents, voice mails and other communications to help prove the allegations, ultimately leading to the criminal inquiry.

Yet the settlement numbers, grand as they are, are small change compared to the nearly $2.9 billion garnered from Neurontin sales in 2003, up from $97.5 million in 1995. Pfizer's 2003 revenues totaled $45.1 billion. Total Justice Department settlements since 2000, in similar medical fraud cases, from drug companies AstraZeneca, TAP Pharmaceuticals, Bayer and Abbott Laboratories, total $2 billion.

Under government rules, drug companies can only market their products for approved uses. Doctors, however, can prescribe drugs for so-called unapproved or "off-label uses." How Warner-Lambert created brand loyalty for Neurontin counsels the average citizen to study up when prescribed an unfamiliar drug. Franklin alleged that the company paid doctors to put their names on ghost-written articles touting the drug for some dozen unapproved uses, and that physicians were plied with tickets to sporting events and golf outings and with speaker fees  with one taking home some $300,000. Franklin said he was told to lie about or exaggerate Neurontin's effectiveness in treating some non-approved uses.

"This is a standard industry practice," Franklin told The Associated Press in another interview.

More troubling, Warner-Lambert withheld from publication a study showing Neurontin less effective than a placebo for treating bipolar disorder, yet it told doctors the drug was effective at treating the serious psychological condition. While the fraud robbed governments and insurers of millions, "The primary victim here are the patients whose doctors might have made another decision if they had the right information," said Franklin.

They truly were on their own.

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Pfizer to Plead Guilty, Pay $430 Million to Settle Drug Marketing Case

By DENISE LAVOIE THE ASSOCIATED PRESS May 14, 2004

BOSTON - Pfizer Inc. will plead guilty to criminal charges and pay $430 million in fines to settle charges that a company it bought four years ago illegally promoted non-approved uses for a drug by flying doctors to lavish resorts and paying them hefty speakers' fees to tout it.

The settlement with the world's largest pharmaceutical company over the company it bought, Warner-Lambert, includes a $240 million criminal fine, the second-largest criminal fine ever imposed in a health care fraud prosecution, the Justice Department said.

Whistleblower David Franklin, the scientist who reported the marketing abuses to authorities, will receive $26.6 million as part of the settlement.

"This is a standard industry practice," Franklin told The Associated Press in an interview. "Hopefully, real change will happen now, and this will be the start of something and not the end."

Under the agreement announced yesterday by federal prosecutors, the company acknowledged spending hundreds of thousands of dollars to promote non-approved uses for the anti-seizure drug Neurontin.

Pfizer will plead guilty to violating the Food, Drug and Cosmetic Act. Besides the $240 million criminal fine, the company will pay $152 million in civil fines to be shared among state and federal Medicaid agencies. An additional $38 million would go to state consumer-protection agencies.

The company said the activity occurred years before it bought Warner-Lambert in 2000.

"Pfizer is committed to compliance with all healthcare laws and FDA requirements and to high ethical standards in all aspects of its business practices," the company said in a written statement.

The case began in 1996, when Franklin filed a whistleblower lawsuit against drug maker Parke-Davis and its parent company Warner-Lambert, alleging it used an illegal marketing plan to drive up Neurontin sales in the 1990s.

The lawsuit alleged that while Neurontin was approved only as an epilepsy drug, the company promoted it for relieving pain, headaches, bipolar disorder and other psychiatric illnesses.

Though doctors can prescribe drugs for any use, the promotion of drugs for these so-called "off-label uses" is prohibited by the Food and Drug Cosmetic Act.

Last May, federal prosecutors in Boston filed a brief in support of Franklin's lawsuit, and have since been in settlement negotiations with New York-based Pfizer to recover money the Medicaid program spent on Neurontin.

Franklin's lawsuit alleged that the company's publicity plan included paying doctors to put their names on ghostwritten articles about Neurontin and to induce them to prescribe the drug for various uses by giving them tickets to sporting events, trips to golf resorts and speakers fees. One doctor received almost $308,000 to speak at conferences about the drug.

Neurontin's sales soared from $97.5 million in 1995 to nearly $2.7 billion in 2003.

"We believe we have exposed an illegal practice in the pharmaceutical industry that caused the Medicaid program to pay tens of millions of dollars for off-label prescriptions that were not eligible for reimbursement under the Medicaid program," said Franklin's attorney, Thomas Greene.

Franklin, 42, said Warner-Lambert had conducted a clinical trial that showed Neurontin was less effective than a placebo for treating bipolar disorder, but it never published those findings and told doctors the drug was highly effective for treating the psychological condition.

"Patients every day are still taking this drug hoping it's effective, and there's really no evidence for that," Franklin said.

He said he and other medical liaisons were instructed to lie about or exaggerate Neurontin's effectiveness for non-approved uses, including showing doctors one case study on a patient who used Neurontin and then telling doctors there were thousands of similar cases.

"I couldn't be more supportive of doctors using drugs for off-label uses. Doctors have to use their best judgment , sound medical judgment, to treat their patients," Franklin said.

"But what this company chose to do was to use that intense desire by doctors for information about drugs and pollute it with false information," he said. "The primary victims here are the patients whose doctors might have made another decision if they had the right information."

Franklin filed his lawsuit under the U.S. False Claims Act, which allows private citizens to sue on behalf of the government and receive a portion of awards in cases where companies are defrauding the government.

"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 U.S. Attorney Michael Sullivan, who joined senior Justice Department officials in Washington to announce the settlement yesterday.

Pfizer shares fell 31 cents to close at $35.40 yesterday on the New York Stock Exchange.

Source: Associated Press