Psych Diagnoses Fraud Leads to Pharmaceutical Prosecutions

NowPublic.com
Kevin Hall
October 8, 2012

Nearly all major psychiatric drug manufacturers have been convicted of illegal marketing and/or fraudulent claims. Several of these cases are linked below. Any that haven't been prosecuted, probably should be.

The reason behind this is simple. There are no medical tests to confirm or deny any mental disorder or diagnoses. A few decades back, psychiatrists "voted" that mental "illness" was caused by a "chemical imbalance of the brain." This is drug marketing, not science. Nobody votes in diabetes or cancer as medical disease and there are sound medical and lab tests for these and other medical diseases.

Psychiatric diagnoses is merely opinion of behavior. Psychiatrists simply vote on what is or is not a mental disorder and place these diagnoses into the American Psychiatric Association's "Diagnostic and Statistical Manual." Their controversial DSM5 is set to be released in 2013 and will likely lead to more pharmaceutical fraudulent marketing prosecutions and settlements.

The reason is simple. If there is no identifiable disease, there can never be a drug that will cure. In fact, there are no cures for any mental disorders. The drugs are generally uppers (ADHD drugs) or downers (anti-anxiety drugs and antipsychotics) that merely mask symptoms in some cases while having extremely dangerous side effects. The upper-type antidepressants have been proven to be very little, if any, more effective than a placebo (sugar pill) yet greatly increase sexual dysfunction while also increasing the likelihood of violence and suicide. Honest marketing would refer to them as anti-sex drugs.

The flow (explained and graphed here) is that psychiatrists create a disease by voting, then pharmaceuticals make the drug. Psychiatrists, usually at major universities, create fraudulent studies that the FDA approves on the word of the drug companies that funded the studies. Once they get approval for a certain condition (such as depression) and population (such as men over age 18, etc.), they get some paid-off psychiatrist to create and get published a study saying that the drug is helpful for other populations and diagnoses. This allows for what is termed off-label prescribing.

It's all fraud and all prosecutable.

The story printed below on Abbott Labs (Depakote) came out last week. It's the Virginia Attorney General's press release www.oag.state.va.us/Media%20and%20News%20Releases/News_Releases/Cuccinelli/100212_Abbott_Labs.html .
Here are some other links to recent settlements with:

GlaxoSmithKline (Paxil) http://www.justice.gov/opa/pr/2012/July/12-civ-842.html ;

Johnson & Johnson, (Risperdal, Invega) www.nytimes.com/2012/04/12/business/drug-giant-is-fined-1-2-billion-in-arkansas.html?_r=0, www.bloomberg.com/news/2012-08-30/j-j-will-pay-181-million-to-settle-risperdal-ad-claims.html, http://www.bloomberg.com/news/2012-08-31/j-j-loses-appeal-of-257-7-million-risperdal-verdict.html  ;

Pfizer, (Zoloft,Geodon, etc.) www.msnbc.msn.com/id/32657347/ns/business-us_business/t/pfizer-pay-record-billion-penalty/#.UHLjXVF_P1U ;

Astrazeneca, (Seroquel) www.azcentral.com/business/articles/2010/04/27/20100427astra-zeneca-settlement.html ;

Bristol-Myers Squibb (Abilify) www.justice.gov/opa/pr/2007/September/07_civ_782.html ;

Eli Lilly (Zyprexa) www.justice.gov/opa/pr/2009/January/09-civ-038.html .

Maybe it is time that some of the psychiatrists creating the fraudulent diagnoses and studies start getting criminally prosecuted for fraud?


Commonwealth of Virginia
Office of the Attorney General


For media inquiries only, contact:  Brian J. Gottstein
Email: bgottstein@oag.state.va.us (best contact method)
Phone: 804-786-5874

Sentencing in Abbott Labs Depakote case: Judge approves $1.5 billion settlement to resolve complaints of off-label promotion of drug

~ Virginia-led investigation was largest state Medicaid fraud investigation in U.S. history ~

ABINGDON, VA (October 2, 2012) - As part of the largest Medicaid fraud case ever led by a state, Attorney General Ken Cuccinelli announced the sentencing of global health care company Abbott Laboratories Inc. in the United States District Court in Abingdon, Va., today. The court approved the $1.5 billion settlement reached on May 7, 2012, among Abbott, Virginia, the United States government, and 48 other states and the District of Columbia, in which Abbott pled guilty to a criminal charge and admitted civil liability for the company's unlawful promotion of the prescription drug Depakote for uses not approved as safe and effective by the Food and Drug Administration (FDA). 

The attorney general's Medicaid Fraud Control Unit (MFCU) was the lead investigative agency in the case, partnering with the prosecutors and civil attorneys from the U.S. Attorney's Office for the Western District of Virginia. This was the largest Medicaid fraud recovery in U.S. history resulting from a state-led investigation, with the Virginia MFCU spending more than four years on the investigation, traveling to 26 states to conduct interviews and sifting through more than one million records looking for evidence.

When it pled guilty in May, Abbott agreed to pay $1.5 billion to resolve its criminal and civil liability pertaining to government health care programs that were defrauded based on reimbursements paid for Depakote due to Abbott's illegal marketing practices. The settlement that was approved today includes a criminal fine and forfeiture totaling $700 million and civil settlements with the federal government and the states totaling $800 million. The civil settlement includes $270 million for the federal government's share of the Medicaid program; $239 million for the states' share of the Medicaid program; and $291 million for Medicare and other federal programs. Abbott will also pay a $500 million fine to the federal government, $198.5 million in criminal asset forfeiture penalties, and $1.5 million to Virginia MFCU to cover investigative costs. Virginia's share of the Medicaid civil settlement is $4.2 million. 

Abbott must also agree to the terms of a Corporate Integrity Agreement with the Office of the Inspector General for the Department of Health and Human Services.

"I've made fighting Medicaid fraud a priority in Virginia by increasing the size of our fraud team by adding 30 new people over the last two years," said Cuccinelli. "I'm committed to ensuring that money intended for medical services for the poor isn't stolen from them and the taxpayers through fraud. Medicaid dollars are limited, and fraud deprives people in true need of necessary medical care."

He continued, "This settlement will allow 49 states, the District of Columbia, and the federal government to recover money fraudulently taken from Medicaid, Medicare, and other health care programs." Louisiana is pursuing separate litigation.

On May 7, Abbott pled guilty to misbranding Depakote by promoting the drug to control agitation and aggression in elderly dementia patients and to treat schizophrenia when neither of these uses was FDA approved. In an agreed statement of facts filed in the criminal action, Abbott admitted that from 1998 through 2006, the company maintained a specialized sales force trained to market Depakote in nursing homes for the control of agitation and aggression in elderly dementia patients, despite the absence of credible scientific evidence that Depakote was safe and effective for that use. In addition, from 2001 through 2006, the company marketed Depakote in combination with atypical antipsychotic drugs to treat schizophrenia, even after its clinical trials failed to demonstrate that adding Depakote was any more effective than an atypical antipsychotic alone for that use.

The FDA is responsible for approving drugs as safe and effective for specified uses. Under the Food, Drug and Cosmetic Act (FDCA), a company in its application to the FDA must specify each intended use of a drug. A company's promotional activities must be limited to only the intended uses that are FDA approved. Promotion by the manufacturer for other uses - known as "off-label" uses - renders the product misbranded, and is illegal.

 For more information on the history of the Abbott Labs settlement, please click here.

Virginia's role in the Abbott case

In September 2007, the Virginia attorney general's Medicaid Fraud Control Unit (MFCU) was contacted with allegations of off-label drug marketing by Abbott Pharmaceuticals.

Although neither the whistleblowers nor the defendant in this case were located in Virginia, the whistleblowers came to Virginia because the MFCU has a national reputation for successfully investigating major national cases, such as the Purdue Pharma Oxycontin case, the Octagon case, and others.

Following Virginia MFCU's initial investigation, the unit contacted the U.S. Attorney's Office for the Western District of Virginia because of their history of working together on such cases. They then began a joint investigation.

On October 31, 2007, the first qui tam ("whistleblower") suit was filed in the United States District Court in Abingdon, Va., against Abbott Laboratories for marketing the drug Depakote for off-label uses. Three other qui tam complaints from other relators were subsequently filed.

MFCU investigators operating out of the attorney general's offices in Roanoke and Abingdon were assigned to the investigation full-time and spent more than four years and 38,000 man-hours on the investigation, traveling to 26 states to conduct interviews and sifting through more than one million records looking for evidence.

The investigation uncovered that Abbott illegally marketed Depakote for non-approved uses, including as an alternative to antipsychotics to treat dementia patients in nursing homes, and for schizophrenia. The investigation also revealed that Abbott paid rebates to health care professionals and long-term care pharmacies for increasing their off-label use of Depakote. 

Attorney General Cuccinelli would like to thank Randall "Randy" Clouse, Director and Chief of Health Care Fraud and Elder Abuse section, and the following MFCU investigators and attorneys for their work in this case: Erica Bailey, Mary Blackburn, Steve Buck, Beverly Darby, Harold Erwin, Elizabeth Fitzgerald, William Clay Garrett, Doug Johnson, John Johnston, Kristy Knighton, Adele Neiburg, John Peirce, and Joey Rusek.

Virginia's MFCU: A history of stopping Medicaid fraud

The Virginia MFCU was established in 1982 within the attorney general's office to investigate and prosecute insurance fraud against the federally funded Medicaid program for indigent health services. MFCU employs a professional staff of criminal investigators, auditors, and several assistant attorneys general who are experienced in commercial and financial investigations. MFCU works regularly with federal and state law enforcement agencies, as well as private insurance companies operating within Virginia.

Over the past 30 years, prior to the Abbott case, Virginia's MFCU had recovered nearly $800 million by tracking down and prosecuting Medicaid fraud offenders. This fiscal year alone, MFCU has recovered more than $22 million. MFCU was also involved in the recovery of more than $634 million after a joint criminal investigation revealed that Purdue Pharma Company fraudulently misbranded the drug OxyContin by marketing the drug to physicians as a slower release -- and thus less addictive -- drug than other prescription opioids. 

From 2010 to today, Attorney General Cuccinelli increased the number of Medicaid fraud and elder abuse staff by more than 50 percent (from 56 to 86) to better combat fraud in Virginia's Medicaid program and to protect the elderly from individuals who abuse and neglect them in nursing homes and health care facilities. It is the only section of the office that he has grown significantly during his tenure, while he has maintained a smaller general fund budget allocation than when he came into office.

Elderly patients over-prescribed antipsychotic drugs

New York Post
Friday, December 02, 2011

In the United States, elderly patients with dementia are too often prescribed antipsychotic drugs to calm their disruptive behavior, a costly and risky practice that should end, experts said Wednesday
Instead, more care should be taken to determine why dementia patients may be acting up and treat those underlying causes, lawmakers were told at a hearing of the Senate Committee on Aging.
"As the baby boomer generation ages, it is imperative to address the overuse and misuse of antipsychotic drugs among nursing home patients," said Daniel Levinson, Health and Human Services Inspector General.

Levinson said recent government audits have raised concerns about the use of antipsychotics by elderly people with dementia in nursing homes, raising their risk of death and wasting money for the US healthcare system.
For instance, more than half of such prescriptions were wrongly paid for in 2007 by government Medicare because the patients did not exhibit symptoms of schizophrenia or bipolar disorder, amounting to about 230 million dollars in waste.
One audit showed 14 percent of nursing home residents had Medicare claims for antipsychotic drugs, he said.
But another panel member, Toby Edelman, senior policy attorney in the office of the Center for Medicare Advocacy, said that audit's estimate was low because it only included some kinds of anti-psychotics.
"Nursing facilities' self-reported data indicate that in the third quarter of 2010, 26.2 percent of residents had received antipsychotic drugs in the previous seven days. That is approximately 350,000 individuals," she said.
"Facilities reported they gave antipsychotic drugs to many residents who did not have a psychosis, including 40 percent of patients at high risk because of behavior issues."
Edelman also pointed out that this issue is far from new, and that the same Senate committee had issued a report on the misuse of drugs in nursing homes back in 1975, and held a workshop on the topic two decades ago.
The practice persists, even though it is against federal law, because of serious understaffing in nursing facilities, high turnover of staff, and "aggressive off-label marketing of anti-psychotic drugs," she said.
The pharmaceutical giant Eli Lilly in 2009 paid a nearly 1.5 billion dollar settlement, in which it admitted no wrongdoing, for off-label promotion of its drug Zyprexa as a treatment for dementia. The drug is FDA-approved for bipolar disorder and schizophrenia.
According to Tom Hlavacek, executive director at Alzheimer's Association's southeastern Wisconsin chapter, elderly people with dementia are sometimes prescribed these potent drugs for behaviors that have other causes.
Urinary tract infections, tooth decay, arthritic pain, or simply moving a patient from one place to another can lead to agitated behaviors.
"Our experience indicates that these care transitions can exacerbate behaviors and often lead to escalating drug treatments," he told lawmakers.
Experts said solutions could include creating stronger penalties for inappropriate prescribing, and a renewed focus on trying non-pharmacological approaches to a problem first.
"Most doctors treat unwelcome behavior in all settings as a disease that requires medication. These drugs are used as chemical restraints," said Jonathan Evans, a doctor who specializes in caring for frail elders.
"Behavior is not a disease. Behavior is communication. And in people who have lost the ability to communicate with words, the only way to communicate is through behavior," he added.
"Good care demands we figure out what they are telling us and help them."

Bipolar diagnosis jumps in young children: study

Ros Krasny
(Reuters)
BOSTON

Fri Jan 15, 2010

BOSTON (Reuters) - The number of children aged 2 to 5 who have been diagnosed with bipolar disorder and prescribed powerful antipsychotic drugs has doubled over the past decade, according to research released on Friday.

Health

The research suggests that while it is still rare to prescribe powerful psychiatric drugs to 2-year-olds, the practice is becoming more frequent.

The data, compiled from 2000 to 2007, and published in the Journal of the American Academy of Child & Adolescent Psychiatry, could inform testimony at the upcoming Boston-area murder trials of the parents of 4-year-old Rebecca Riley. The girl died of an overdose of mood-stabilizing medication in 2006.

A Boston child psychiatrist, Kayoko Kifuji, diagnosed Riley with bipolar disorder and attention deficit hyperactivity disorder when she was 30 months old, and placed her on several powerful drugs: Depakote, an antiseizure medication also used for bipolar disorder, and clonidine, a blood pressure medication.

Kifuji's testimony may be crucial to the fate of Michael and Carolyn Riley, who face first-degree murder charges. A grand jury and a review by the state's medical licensing board cleared the doctor of wrongdoing.

Prosecutors claim the Rileys deliberately overmedicated their daughter to subdue her. The couple say they were following Kifuji's instructions and their daughter died of pneumonia.

The case has shone the spotlight again on a debate within the psychiatric profession about whether bipolar disorder can be diagnosed in very young children and whether it is wise to prescribe powerful medications.

BIPOLAR TODDLERS?

Bipolar disorder, characterized by severe mood swings, was once thought to emerge only during adolescence or later. But Dr. Joseph Biederman, a child psychiatrist at Harvard University, transformed views on the subject by arguing that children could have the disorder at extremely young ages.

He is credited with spearheading a more than 40-fold increase in the number of children diagnosed with bipolar disorder over the past decade.

Biederman was accused in 2008 by Republican U.S. Senator Charles Grassley of failing to fully disclose payments by drug companies, including some that produced medication for bipolar disorder. Biederman declined to be interviewed about the latest study.

"The psychiatric diagnosis of very young children is anything but an exact science," said Harry Tracy, a psychologist and publisher of NeuroInvestment, a monthly publication specializing in central nervous system disorders.

"Such disparate causes as ADHD, depression, bipolar disorder, sexual abuse, and family dysfunction can produce very similar symptoms in a toddler."

The report's author, Mark Olfson, professor of clinical psychiatry at Columbia University, said about 1.5 percent of all privately insured children between the ages of 2 and 5, or one in 70 children, received some sort of psychotropic drug -- whether an antipsychotic, a mood stabilizer, a stimulant or an antidepressant -- in 2007.

If a child is diagnosed with bipolar disorder between the ages of 2 and 5, about half are prescribed an antipsychotic, such as Eli Lilly & Co's Zyprexa, AstraZeneca Plc's Seroquel, and Johnson & Johnson's Risperdal. They are prescribed to about one in 3,000 2-year-olds, according to his report.

"There might be a role for these drugs but only after you've tried other interventions, with the parents, or with the parents and child together, but that is not happening when you examine the billing records," Olfson said.

(Additional reporting by Toni Clarke; Editing by Peter Cooney)

Pfizer Broke the Law by Promoting Drugs for Unapproved Uses

Bloomberg News
November 9, 2009
By David Evans

Nov. 9 (Bloomberg) -- Prosecutor Michael Loucks remembers clearly when lawyers for Pfizer Inc., the world’s largest drug company, looked across the table and promised it wouldn’t break the law again.

It was January 2004, and the attorneys were negotiating in a conference room on the ninth floor of the federal courthouse in Boston, where Loucks was head of the health-care fraud unit of the U.S. Attorney’s Office. One of Pfizer’s units had been pushing doctors to prescribe an epilepsy drug called Neurontin for uses the Food and Drug Administration had never approved.

In the agreement the lawyers eventually hammered out, the Pfizer unit, Warner-Lambert, pleaded guilty to two felony counts of marketing a drug for unapproved uses.

New York-based Pfizer agreed to pay $430 million in criminal fines and civil penalties, and the company’s lawyers assured Loucks and three other prosecutors that Pfizer and its units would stop promoting drugs for unauthorized purposes.

What Loucks, who’s now acting U.S. attorney in Boston, didn’t know until years later was that Pfizer managers were breaking that pledge not to practice so-called off-label marketing even before the ink was dry on their plea.

On the morning of Sept. 2, 2009, another Pfizer unit, Pharmacia & Upjohn, agreed to plead guilty to the same crime. This time, Pfizer executives had been instructing more than 100 salespeople to promote Bextra, a drug approved only for the relief of arthritis and menstrual discomfort, for treatment of acute pains of all kinds.

Record High Fine

For this new felony, Pfizer paid the largest criminal fine in U.S. history: $1.19 billion. On the same day, it paid $1 billion to settle civil cases involving the off-label promotion of Bextra and three other drugs with the U.S. and 49 states.

“At the very same time Pfizer was in our office negotiating and resolving the allegations of criminal conduct in 2004, Pfizer was itself in its other operations violating those very same laws,” Loucks, 54, says. “They’ve repeatedly marketed drugs for things they knew they couldn’t demonstrate efficacy for. That’s clearly criminal.”

The penalties Pfizer paid this year for promoting Bextra off-label were the latest chapter in the drug’s benighted history. The FDA found Bextra to be so dangerous that Pfizer took it off the market for all uses in 2005.

Across the U.S., pharmaceutical companies have been pleading guilty to criminal charges or paying penalties in civil cases when the U.S. Department of Justice finds that they deceptively marketed drugs for unapproved uses, putting millions of people at risk of chest infections, heart attacks, suicidal impulses or death.

$7 Billion in Penalties

Since May 2004, Pfizer, Eli Lilly & Co., Bristol-Myers Squibb Co. and four other drug companies have paid a total of $7 billion in fines and penalties. Six of the companies admitted in court that they marketed medicines for unapproved uses.

In September 2007, New York-based Bristol-Myers paid $515 million -- without admitting or denying wrongdoing -- to federal and state governments in a civil lawsuit brought by the Justice Department. The six other companies pleaded guilty in criminal cases.

In January 2009, Indianapolis-based Lilly, the largest U.S. psychiatric drug maker, pleaded guilty and paid $1.42 billion in fines and penalties to settle charges that it had for at least four years illegally marketed Zyprexa, a drug approved for the treatment of schizophrenia, as a remedy for dementia in elderly patients.

In five company-sponsored clinical trials, 31 people out of 1,184 participants died after taking the drug for dementia -- twice the death rate for those taking a placebo. Those findings were reported in an October 2005 article in the Journal of the American Medical Association.

‘Don’t Respect the Law’

“Marketing departments of many drug companies don’t respect any boundaries of professionalism or the law,” says Jerry Avorn, a professor at Harvard Medical School in Boston and author of “Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs” (Random House, 2004). “The Pfizer and Lilly cases involved the illegal promotion of drugs that have been shown to cause substantial harm and death to patients.”

The widespread off-label promotion of drugs is yet another manifestation of a health-care system that has become dysfunctional.

“It’s an unbearable cost to a system that’s going broke,” says Avorn, who heads the pharmacology economics unit of Brigham and Women’s Hospital in Boston. “We can’t even afford to pay for effective, safe therapies.”

10 Million Prescriptions

About 15 percent of all drug sales in the U.S. are for unapproved uses without adequate evidence the medicines work, according to a study by Randall Stafford, a medical professor at Stanford University in Palo Alto, California.

He estimates that doctors write more than 10 million such prescriptions each year.

As large as the penalties are for drug companies caught breaking the off-label law, the fines are tiny compared with the firms’ annual revenues.

The $2.3 billion in fines and penalties Pfizer paid for marketing Bextra and three other drugs cited in the Sept. 2 plea agreement for off-label uses amount to just 14 percent of its $16.8 billion in revenue from selling those medicines from 2001 to 2008.

The total of $2.75 billion Pfizer has paid in off-label penalties since 2004 is a little more than 1 percent of the company’s revenue of $245 billion from 2004 to 2008.

$36 Billion in Revenue

Lilly already had a criminal conviction for misbranding a drug when it broke the law again in promoting schizophrenia drug Zyprexa for off-label uses starting in 1999. The medication provided Lilly with $36 billion in revenue from 2000 to 2008.

That’s more than 25 times as much as the total penalties Lilly paid in January.

Companies regard the risk of multimillion-dollar penalties as just another cost of doing business, says Lon Schneider, a professor at the University of Southern California’s Keck School of Medicine in Los Angeles.

In 2006, he led a study for the National Institute of Mental Health of off-label use of drugs, including Zyprexa, for the treatment of Alzheimer’s disease.

“There’s an unwritten business plan,” he says. “They’re drivers that knowingly speed. If stopped, they pay the fine, and then they do it again.”

Shareholders Unmoved

Schneider has been paid both by Lilly as a consultant and by plaintiffs suing the company.

Big Pharma’s off-label transgressions didn’t trigger a rush for the doors by shareholders. From Jan. 26, when Pfizer announced that it would pay billions in penalties, to Oct. 12, Pfizer’s share price increased 9.3 percent, just shy of the 11.2 percent rise in the Standard & Poor’s 500 Health Care Index.

From Oct. 21, 2008, when Lilly said it would pay its penalties, to Oct. 12, the company’s stock value went up 0.6 percent; the S&P index gained 6.9 percent in that time.

In pushing off-label use of drugs, companies find ready and willing partners in physicians. Under the fragmented system of medical regulation in the U.S., it’s legal for doctors to prescribe FDA-approved drugs for any use.

The FDA has no authority over doctors, only over drug companies, regarding off-label practices. It’s up to the 50 states to oversee physicians.

“I think the physician community has to take some ownership responsibility and do their own due diligence beyond the sales and marketing person,” says Boston’s former U.S. Attorney Michael Sullivan.

Off-Label Benefits

Loucks says prosecutors realize that patients can benefit when doctors use drugs for off-label purposes based on science and not on false marketing claims.

Doctors generally don’t tell people that they’re prescribing drugs pitched to them by pharmaceutical salespeople for unapproved treatments, says Peter Lurie, deputy medical director of Public Citizen, a Washington-based public interest group.

Most physicians don’t keep track of FDA-approved uses of drugs, says Lurie, a physician who has published articles in “The Lancet” and the “Journal of the American Medical Association.”

“The great majority of doctors have no idea; they don’t even understand the distinction between on- and off-labeling,” Lurie says.

Pharmaceutical companies have showered doctors with cash to persuade them to use drugs off-label, according to their guilty pleas.

‘Buying Access’

Pfizer’s marketing program offered doctors up to $1,000 a day to allow a Pfizer salesperson to spend time with the physician and his patients, according to a whistle-blower lawsuit filed by John Kopchinski, who worked as a salesman at Pfizer from 1992 to 2003.

“By ‘pairing up’ with a physician, the sales representative was able to promote over a period of many hours, without the usual problems of gaining access to prescribing physicians,” Kopchinski says. “In essence, this amounted to Pfizer buying access to physicians.”

Pfizer spokesman Chris Loder says the company stopped what it calls “mentorships” in 2005. He says Pfizer paid doctors $250 per visit.

It used to be legal for companies to promote drugs for any use in the U.S. Congress banned the practice in 1962. The catalyst was Thalidomide, a morning sickness drug taken by pregnant women outside the U.S. that caused severe birth defects.

Recouping Investments

The 1962 law required pharmaceutical companies to prove their drugs were safe and effective for specific uses. Before that, a drug company could market an approved medicine for any illness.

If the law is clear, why do drug companies keep breaking it? The answer lies in economics. Pharmaceutical companies spend about $1 billion to develop and test a new drug. To recoup their investment, the companies want doctors to prescribe their drugs as widely as possible.

Pfizer’s Neurontin is a case in point. The FDA approved the drug as a supplemental medication in treating epilepsy in 1993. Pfizer took in $2.27 billion from sales of Neurontin in 2002. A full 94 percent -- $2.12 billion -- of that revenue came from off-label use, according to the prosecutors’ 2004 Pfizer sentencing memo.

Pfizer, which bought Wyeth on Oct. 15 for $68 billion, put itself at the center of illegal off-label drug marketing with an acquisition frenzy a decade earlier. From 1995 to 2005, Pfizer purchased more than 20 companies.

Guilty Pleas

Since 2004, companies that are now Pfizer divisions have pleaded guilty to off-label marketing of two drugs. Pfizer continued off-label promotions for these medications after buying the firms, according to Pfizer’s Sept. 2 guilty plea and FDA correspondence with Pfizer.

Pfizer first stepped into an off-label scheme in 1999, when it offered to buy Morris Plains, New Jersey-based Warner-Lambert Co. Prosecutors charged that Warner-Lambert marketed Neurontin off-label between 1995 and 1999.

Warner-Lambert admitted doing so for one year in a May 2004 guilty plea for which Pfizer paid $430 million in fines and penalties.

Neurontin, which was invented by Warner-Lambert, was first tested in humans in 1987. When the FDA approved it in 1993 to be used only along with other epilepsy drugs, the agency wrote that a side effect of the drug can be that it induces depression and suicidal thoughts in patients.

Whistle-Blower

Much of what prosecutors learned about Warner-Lambert’s marketing of Neurontin comes from a former employee.

David Franklin, who holds a Ph.D. in microbiology from the University of Rhode Island, left his job as a pediatric researcher at Harvard University’s Dana-Farber Cancer Institute in 1996 to work for the Parke-Davis unit of Warner-Lambert in Boston.

He says he hoped the salary boost -- to $55,000 annually from $18,000 -- would help him pay off student loans and better support his family.

Franklin’s title at Warner-Lambert was medical liaison. He says he soon realized his new employer viewed his doctorate as a badge that would allow him to strike up conversations with physicians.

Franklin, 48, says his job involved more salesmanship than science. He told doctors that Neurontin was the best drug for a dozen off-label uses, including pain relief, bipolar disease and depression.

‘What I Did Was Wrong’

“Technically, I had responsibility for answering physician questions about all of Parke-Davis’s drugs,” Franklin says. “In practice, my real job was to promote Neurontin for off- label indications heavily -- to the exclusion of just about everything else.”

Franklin, whose wife is a lawyer, says he knew such uses of the drug had no scientific support for effectiveness and safety.

“I was actually undermining their ability to fulfill the Hippocratic oath,” Franklin says, referring to a physician’s pledge to “first, do no harm.”

Franklin says he was horrified when he learned from a doctor that a child had a behavioral outburst at school for the first time after taking Neurontin.

“Don’t we have an obligation to tell physicians about this?” Franklin says he asked his manager, Phil Magistro. His boss tried to reassure him, Franklin says.

‘Total Disregard’

“‘Don’t worry about this stuff,’” he says Magistro told him. “‘It can never get back to us.’”

Franklin was stunned.

“I realized at that moment, looking into his eyes, that there was an absolute total disregard for the patient,” he says.

Magistro, who now works at drug marketing adviser Atom Strategic Consulting LLC in Randolph, New Jersey, didn’t return calls seeking comment.

Franklin saved phone messages from Magistro to his sales team urging them to market Neurontin for off-label uses, including pain relief. During one such call, on May 23, 1996, at 5:48 p.m. in Boston, Magistro told his staff, “You’re supposed to be pushing on Neurontin,” according to a transcript of the tape filed in federal court.

“When we get out there, we want to kick some ass. We want to sell Neurontin on pain,” Magistro said. “All right?”

Quit the Job

After working for Warner-Lambert for three months, Franklin grew concerned about his own liability. He quit the job and talked with Boston attorney Thomas Greene, who helped him file a lawsuit against the company.

Franklin acted as a whistle-blower, suing on behalf of taxpayers to recover money the government paid for illegally promoted drugs. Under federal and state whistle-blower statutes, he stood to collect as much as 30 percent of any settlement the company made with the government.

Franklin had to wait four years -- until 2000 -- before the Justice Department began a criminal investigation. In November 1999, Pfizer made its public offer to buy Warner-Lambert. In January 2000, a federal grand jury in Boston issued subpoenas to Warner-Lambert employees to testify about the marketing of Neurontin.

That March, Warner-Lambert’s annual report disclosed that prosecutors were building a criminal case. Undeterred, Pfizer bought Warner-Lambert in June for $87 billion. It was the third- largest merger in U.S. history.

‘Misleading and in Violation’

A year after the acquisition, the FDA discovered that Neurontin was still being marketed off-label. In a letter to the company on June 29, 2001, the agency wrote that Pfizer’s promotion of the drug “is misleading and in violation of the Federal Food, Drug and Cosmetics Act.”

The agency asked Pfizer to stop such promotions of Neurontin. The FDA said Pfizer had distributed brochures -- known as “slim jims” because they’re small enough to put in a jacket pocket -- improperly claiming that the drug could improve energy levels and memory.

“Immediately discontinue the use of this slim jim and any other promotional material or practices with the same or similar messages,” the FDA wrote.

Pfizer marketed Neurontin off-label after receiving that letter, agency records show. For 2001, Pfizer reported revenue of $1.75 billion from Neurontin sales, making it the company’s fourth-largest-selling drug that year, ahead of impotence pill Viagra, which Neurontin topped for four years.

Marketing Violated Rules

As Neurontin sales soared to $2.27 billion in 2002, the FDA found that Pfizer was improperly claiming that the drug was useful for a broader range of brain disorders than scientific evidence had established.

The agency sent a letter dated July 1, 2002, that said the company’s marketing practices were in violation of FDA rules. It asked Pfizer to stop using misleading promotions. Pfizer reported $2.7 billion in revenue from Neurontin in 2003. Overall, the drug has provided Pfizer with $12 billion in revenue.

In a response to Bloomberg News, Pfizer spokesman Chris Loder said, “Regarding the 2001 and 2002 FDA letters, we do not believe that they were suggestive of any continuing off-label promotion.”

For blowing the whistle on his employer, Franklin collected $24.6 million under the False Claims Act.

Prosecutors Loucks and Sullivan got involved in the case after Franklin filed his suit, relying on information from Franklin and their own investigation. Before 2004, prosecutions for off-label marketing were rare.

‘Everybody Does It’

“Until a couple of these cases became public, companies were probably saying, ‘Everybody does it this way,’” Sullivan says.

Loucks had a track record in off-label prosecutions. He gave up private practice at Choate Hall & Stewart LLP in Boston in 1985 to join the U.S. Attorney’s Office.

In 1994, he negotiated a $61 million settlement with Murray Hill, New Jersey-based C.R. Bard Inc., which pleaded guilty to promoting off-label use of a heart catheter that led to patient deaths.

In 2002, he co-authored, with Carol Lam, “Prosecuting and Defending Health Care Fraud Cases” (BNA Books).

In the January 2004 settlement negotiations with Loucks, Sullivan and two other prosecutors, Pfizer’s lawyers assured the U.S. Attorney’s Office that the company wouldn’t market drugs off-label.

‘Those Promises’

“They asserted that the company understood the rules and had taken steps to assure corporate compliance with the law,” Loucks says. “We remember those promises.”

What Pfizer’s lawyers didn’t tell the prosecutors was that Pfizer was at that moment running an off-label marketing promotion using more than 100 of its salespeople. They were pitching Bextra, a Pfizer sales manager admitted when she pleaded guilty to misbranding a drug on March 30, 2009.

Jeff Kindler, who became Pfizer’s general counsel in 2002, supervised the lawyers who made the promises to prosecutors. By 2004, Kindler increased the compliance budget 12-fold. He became chief executive officer in 2006. In Pfizer’s ethics guide, he says stories about misbehaving companies and executives abound.

“Pfizer truly stands apart,” he says. “I am proud of our record.” On Oct. 1, Kindler was elected to the board of the Federal Reserve Bank of New York. Kindler declined to comment.

Peapack, New Jersey-based Pharmacia & Upjohn Inc. developed Bextra, which was approved by the FDA only for the treatment of arthritis and menstrual discomfort in 2001.

Sales Manager Pleads Guilty

P&U and Pfizer had by then already crafted a joint marketing agreement to sell the drug. In November 2001, Mary Holloway, a Pfizer regional manager for the Northeastern U.S., began illegally training and directing her sales team to market Bextra for the relief of acute pain, Holloway admitted in a March 2009 guilty plea.

On Dec. 4, 2001, Pfizer executives sent Holloway a copy of a nonpublic letter from the FDA to the company. The agency had denied Pfizer’s application to market Bextra for acute pain. Clinical trials had shown Bextra could cause heart damage and death.

Pfizer bought Pharmacia & Upjohn in April 2003. From 2001 to the end of 2003, P&U, first as an independent company and then as a unit of Pfizer, paid physicians more than $5 million in cash to lure them to resorts, where salespeople illegally pitched off-label uses for Bextra, P&U admitted in its Sept. 2 guilty plea.

‘Golf, Massages’

“Pharmacia paid targeted physicians both airfare and two to three days’ accommodations at lavish resorts in the Bahamas, Virgin Islands and across the United States and further entertained these physicians with golf, massages and other recreation activities,” according to prosecutors’ findings.

In her guilty plea, Holloway said her team had solicited hospitals to create protocols to buy Bextra for the unapproved purpose of acute pain relief. Her representatives didn’t mention the increased risk of heart attacks in their marketing.

They told doctors that side effects were no worse than those of a sugar pill, Holloway admitted in her guilty plea.

In 2003, Holloway reported her unit’s off-label promotions of Bextra up the corporate ladder at Pfizer, according to a pre- sentencing memo to the judge written by Robert Ullmann, Holloway’s attorney. Top managers didn’t attempt to halt the illegal conduct, the memo said.

“Corporate tracked this information, and at no time did it inform Ms. Holloway that any of the reported protocols were inappropriate,” he wrote. “Instead, the instruction was to get more protocols.”

Blockbuster Status

By the end of 2004, Bextra reached blockbuster status, with annual sales of $1.29 billion. Holloway promoted Bextra until the FDA asked Pfizer in April 2005 to pull it from the market for all uses, evidence in her case shows.

The agency concluded that the drug increased the risk of heart attacks, chest infections and strokes in cardiac surgery patients. In June 2009, Holloway, 47, was sentenced to two years on probation and fined $75,000. She didn’t return phone calls seeking comment.

Ronald Rainero, a Pfizer district sales manager and employee for more than 20 years, says he was responsible for promoting Bextra in New York from 2001 to 2005. In September 2007, Rainero, 47, began cooperating with federal prosecutors on the Bextra case.

Hotel Meetings

He says he met monthly with his fellow managers at a Hilton hotel in Staten Island, New York, to discuss sales methods of promoting Bextra off-label. As a whistle-blower, Rainero was awarded $9.3 million as part of the September settlement.

In the same time period that Pfizer was marketing Bextra off-label, the company’s sales force was promoting another drug, Zyvox, improperly, Pfizer admitted at the time of its September plea agreement.

Zyvox was approved in 2000 by the FDA for treating MRSA- caused pneumonia and skin infections. Raniero told federal prosecutors that Pfizer began the Zyvox campaign in 2001. The company admitted to falsely claiming that the drug was better than other medications for treating MRSA pneumonia.

Pfizer told doctors to use Zyvox rather than vancomycin, a generic antibiotic that cost $18 a day. Pfizer sold Zyvox for about $150 a day. A table on page 30 of a 35-page fact book produced by Pfizer for Zyvox says the drug is less effective than vancomycin for MRSA pneumonia.

‘Misleading Promotion’

On July 20, 2005, the FDA sent a letter to Hank McKinnell, then Pfizer’s CEO, saying, “Your misleading promotion of Zyvox, and in particular your unsubstantiated implied claims regarding its superiority to vancomycin, poses serious health and safety concerns.”

The agency ordered the company to stop the promotion. In response, Pfizer told the FDA it would stop saying Zyvox was more effective against MRSA pneumonia than vancomycin.

Despite its 2005 pledge to the FDA, Pfizer continued to tell hospitals and doctors that Zyvox would save more lives than vancomycin, the company admitted in the September settlement.

By 2007, the criminal and civil cases against Pfizer, its employees and its subsidiaries had started to mount. The tally of drugs cited by federal prosecutors for off-label promotion reached six by 2009. In April 2007, P&U pleaded guilty to a felony charge of offering a $12 million kickback to a pharmacy benefit manager.

$2.2 Billion in Penalties

Pfizer paid a criminal fine of $19.7 million. Thomas Farina, a Pfizer district sales manager, was convicted in federal court in March 2009 for destroying records during the Bextra investigation. Farina, 42, was sentenced to three years on probation, including six months of home confinement. He didn’t return calls seeking comment.

Pfizer itself was called to account on Sept. 2, when it agreed to pay the $2.2 billion in fines and penalties. P&U pleaded guilty to a felony charge of misbranding Bextra with the intent to defraud. After the settlement, Pfizer general counsel Amy Schulman said the company had learned its lesson.

“We regret certain actions we’ve taken in the past,” she said. “Corporate integrity is an absolute priority for Pfizer.”

One reason drug companies keep breaking the law may be because prosecutors and judges have been unwilling to use the ultimate sanction -- a felony conviction that would render a company’s drugs ineligible for reimbursement by state health programs and federal Medicare.

“It’s potentially a death sentence for a drug company,” prosecutor Sullivan says.

Fig Leaf

A legal fig leaf allows a parent company to continue to participate in government programs even after its subsidiary has pleaded guilty.

Pfizer maintains its good standing with such agencies because its subsidiaries, Warner-Lambert and P&U, and not the corporation itself, entered the guilty pleas to felony charges.

A felony conviction of a pharmaceutical giant could lead to disaster for shareholders, Loucks says, adding that’s a step that may have to be taken for repeat offenders.

“I think it’s something the trigger will get pulled on,” he says from his ninth-floor office in the federal courthouse, with a sweeping view of Boston Harbor. “It’s just a question of when.”

At Pfizer’s Pharmacia sentencing on Oct. 16., U.S. District Court Judge Douglas Woodlock said companies don’t appear to take the law seriously.

“It has become something of a cost of doing business for some of these corporations, to shed their skin like certain animals and leave the skin and move on,” he said.

Eli Lilly

Lilly’s rap sheet goes back to 1985. That’s when the company pleaded guilty to 25 federal misdemeanor charges related to its misbranding of Oraflex, an arthritis drug.

Lilly stopped selling the drug four months after U.S. sales began in 1982, following the company’s failure to tell the FDA about illnesses and deaths tied to the medication. Lilly paid a $25,000 fine.

Twenty years later, in 2005, Lilly paid $36 million in a guilty plea to one federal misdemeanor for off-label marketing of Evista, a drug the FDA had approved for bone strengthening.

In 1997, the agency had rejected Lilly’s application to market the drug to reduce the risk of breast cancer. Yet beginning the next year, Lilly adopted an Evista marketing plan that included a seminar with doctors designed to appeal to women’s breast cancer concerns, Lilly admitted in its 2005 guilty plea.

In 2007, the FDA approved Evista for preventing breast cancer in two limited groups.

Back in Court

In January 2009, Lilly was back in federal court. Prosecutors in Philadelphia accused the company of earning hundreds of millions of dollars by illegally promoting its schizophrenia drug Zyprexa for the unapproved treatment of dementia from 1999 to at least 2003.

In 2001, Lilly’s senior management decided not to seek FDA approval for Zyprexa to treat dementia because of what they viewed as mixed results in clinical trials and safety risks, according to admissions by Lilly in its 2009 guilty plea. In its marketing, Lilly promoted the drug as effective.

Zyprexa has been Lilly’s best-selling drug for the past decade.

“Eli Lilly undertook this illegal off-label promotion for its own financial gain despite the potential risk to patients’ health and lives,” prosecutors wrote in their sentencing memo.

Lilly Chairman and CEO John Lechleiter said after the settlement that the company was devoted to acting responsibly.

‘Deeply Regret’

“We deeply regret the past actions covered by the misdemeanor plea,” he said. “Doing the right thing is nonnegotiable at Lilly.”

In a written response to questions from Bloomberg News, Lilly said, “Lilly entered into a very narrow guilty plea. Even though the company disagrees with and does not admit to the allegations, Lilly agreed to settle the dispute.”

Lilly paid $1.42 billion for a fine and penalties in the January settlement with federal and state governments. That included the largest criminal fine in U.S. history -- until Pfizer pleaded guilty in September.

The Justice Department could have charged Lilly with a felony. Prosecutors decided that it wouldn’t be fair to innocent Lilly employees, shareholders and pensioners to potentially shut down the company, according to the sentencing memo.

‘All the Factors’

“The government considered all the factors in its decision,” prosecutors wrote. “Those factors included other persons not proven personally culpable.”

Federal regulators have detected a similar pattern of dishonesty by other pharmaceutical firms. Schering-Plough Corp. drug salesmen pitched off-label uses of a cancer drug called Temodar at the American Society of Clinical Oncology’s annual conference in San Francisco in May 2001.

Schering-Plough representatives said Temodar compared favorably to a placebo in clinical trials for the off-label uses and was approved by the FDA for first-line use in treating brain tumors.

An FDA employee attending the conference took note. The next month, the FDA accused Schering of lying.

There had been no such clinical trials and the agency had not approved Temodar as the salespeople had claimed, the FDA said in a June 28, 2001, letter to Mary Jane Nehring, Schering’s senior director of marketed products. The agency ordered the company to immediately cease illegal promotion of Temodar.

Kenilworth, New Jersey-based Schering-Plough was quick to respond. On July 12, 2001, it wrote back to the FDA, assuring regulators that the San Francisco activity was an isolated incident.

‘Certainly Inconsistent’

“It was certainly inconsistent with the direction provided by the home office,” the drug company wrote, according to prosecutor’s records.

The FDA told Schering-Plough three weeks later that it had closed its investigation.

Schering-Plough didn’t stop pitching the drug for unapproved uses. At the direction of top management, Schering ordered widespread off-label marketing of Temodar and Intron A, another cancer drug, until December 2003, the company admitted in an August 2006 guilty plea.

Schering, which agreed in March to be acquired by Merck & Co., earned a pre-tax profit of $124.2 million from the illegal sales after promising the FDA in 2001 it would stop marketing for off-label uses, the company admitted.

Schering-Plough pleaded guilty in August 2006 to conspiring to make false statements to the FDA. The company agreed to pay $435 million to settle the case.

‘Upsetting to Me’

U.S. District Court Judge Patti Saris, who had presided over the Neurontin whistle-blower case before the Pfizer probe, accepted Schering’s plea in her Boston courtroom in January 2007. She expressed dismay with the drug industry.

“It’s been upsetting to me how many of the big pharmaceutical companies have engaged in what I view as clearly illegal behavior in terms of off-label marketing,” she said. “It almost seems as if the pharmaceutical companies said ‘Yeah, yeah, yeah’ to the FDA and then went and did it anyway.”

Brent Saunders, a Schering-Plough senior vice president, said after the settlement that his company had made great progress in putting integrity at the center of its work.

“With this agreement, we are putting issues from the past behind us,” he said. Schering declined to comment further.

As prosecutors continue to uncover patterns of deceit in off-label marketing by pharmaceutical companies, millions of patients across the nation remain in the dark. Doctors often choose the medications based on dishonest marketing by drug company salesmen.

‘A Morass’

“It’s a morass of undifferentiated information out there,” Public Citizen’s Lurie says. “And the doctors, let alone patients, aren’t able to distinguish the good from the bad.”

One thing all people should do, Lurie says, is ask whether their prescriptions are for FDA-approved uses, and if not, whether strong evidence supports using the drug, particularly if it can be dangerous.

Loucks says that putting an end to the criminal off-label schemes by the pharmaceutical industry is more difficult. As drugmakers repeatedly plead guilty, they’ve shown they’re willing to pay hundreds of millions of dollars in fines as a cost of generating billions in revenue.

The best hope, Loucks says, is that drug companies actually honor the promises they keep making -- and keep breaking -- to obey the law of the land.

To contact the reporter on this story: David Evans in Los Angeles at davidevans@bloomberg.net

Lilly Paid Doctors to Prescribe Zyprexa, Notes Show

Bloomberg News
By Margaret Cronin Fisk and Jef Feeley

Sept. 8 (Bloomberg) -- Eli Lilly & Co. paid doctors in South Carolina for participating in a speakers’ program in exchange for prescribing the antipsychotic Zyprexa, and used golf bets to get more patients on the drug, according to notes by sales representatives.

During a golf game, one doctor agreed to start new patients on Zyprexa for each time a sales representative parred, or put the ball in a hole within a predetermined number of strokes, according to the notes.

“I got four pars out of nine holes,” Lilly salesman Vince Sullivan said in a February 2002 note. “I said I wanted my four new patients.”

The notes were made public for the first time in a court hearing today in South Carolina in the state’s lawsuit against Lilly over Zyprexa marketing practices. State officials contend Indianapolis-based Lilly marketed the drug for unapproved uses. A trial is set to begin Sept. 14.

South Carolina wants to recoup $200 million it contends it wrongfully spent on Zyprexa prescriptions as a result of Lilly’s push to get doctors to use the medicine, approved only for schizophrenia and bipolar disorder, for other ailments. The state also contends the drugmaker withheld information about Zyprexa’s side effects, such as weight gain.

“Call notes are jottings written by sales reps and most reps make hundreds of notes monthly. They are not literal recitations of interactions with physicians,” Marni Lemons, a Lilly spokeswoman, said in telephone interview.

‘Out Of Context’

Lemons said the state’s lawyers took the notes “out of context” and “not one physician employed by the state of South Carolina has testified Lilly promoted off-label to them.”

The notes became public at a hearing in Spartanburg, South Carolina, on Lilly’s motion to have the state’s case thrown out prior to trial.

The state also is seeking a $5,000 fine for each Zyprexa prescription dating back to 1997, according to court filings. That could result in billions of dollars in fines, South Carolina’s lawyers say.

Lilly resolved a marketing investigation over Zyprexa in January with the U.S. Justice Department, promising to pay $1.42 billion, including about $362 million to more than 30 states. South Carolina opted not to join that settlement.

Alaska Settlement

The only trial of a state’s lawsuit ended in March 2008 with an out-of-court settlement in which Lilly agreed to pay Alaska $15 million.

Zyprexa, part of a class of medications called atypical antipsychotics, has been linked to excessive weight gain and diabetes. The lawsuits also claim Lilly failed to properly warn of Zyprexa’s side effects.

Lilly officials have denied the drugmaker withheld information about Zyprexa’s side effects or improperly marketed the drug in South Carolina.

Lawyers for the state pointed to a sales note from Sullivan in which he tells another salesman to tie a doctor’s Zyprexa prescriptions to participation in a speakers’ program.

The company paid doctors and psychiatrists to address physician gatherings about the benefits of the antipsychotic. “If his numbers go up, maybe he can talk,” Sullivan said in the August 2001 note.

‘So Much Money’

A year later, Sullivan noted in sales records that he was pressing a doctor to write more Zyprexa prescriptions “because we’re paying him so much money” to participate in the speakers’ program, according to a call note made public today.

Lilly also offered other inducements to doctors who prescribed Zyprexa, such as deep-sea fishing trips and Palm- Pilot devices, said John Simmons, a Columbia, South Carolina- based lawyer representing the state.

The sales notes show that many of those prescriptions were for unapproved, or so-called off-label, uses, Simmons told Judge Roger Couch.

The U.S. Food and Drug Administration regulates what drugs can be used to treat specific ailments. Drugmakers can only promote their medicines for FDA-specified illnesses.

Faced with the loss of patent protection for its Prozac antidepressant, Lilly officials pushed salespeople to market Zyprexa for a host of ailments, including depression, agitation and anger, Simmons said. The FDA hadn’t approved the drug for any of those uses, he added.

‘Diamond’

Company officials said in a memo that they were “betting the farm on Zyprexa” to replace Prozac, Simmons said.

In internal memos, Lilly officials used the word “diamond” as a code for talking about their Zyprexa off-label marketing campaign, he said.

He cited notes from visits with doctors in 2000 and 2001 where sales reps reported talking about older patients being treated with Zyprexa for agitation and declining mental acuity.

Simmons noted the drugmaker already pleaded guilty to a criminal charge over its off-label promotion of Zyprexa for use with elderly patients.

In that plea, Lilly officials acknowledge that the company illegally pushed the drug’s off-label use by older patients from Sept. 1, 1999, to March 31, 2001.

The company also pushed primary-care physicians to use the antipsychotic medication on children, Simmons said. One of the notes indicated salespeople said the drug is ‘for kids whose parents have to shove the pills down their throat every day.”

‘In His Tea’

Another note shows that one doctor told Lilly he was prescribing Zyprexa for a 13-year-old, whose mother “puts it in his tea.”

Besides illegally marketing its drug, South Carolina officials contend Lilly violated the state’s unfair trade practices law by mishandling Zyprexa and unjustly enriched itself at the state’s expense.

Lilly’s lawyers have countered in court filings that the company didn’t engage in fraud in its handling of Zyprexa or misrepresent the drug’s strengths and weaknesses.

They contend South Carolina officials have no evidence of illegal marketing within the state, either from private doctors or those working with state agencies.

“At least 12 state officials, including state physicians who prescribe Zyprexa, testified that they were not misled by Lilly,” the lawyers said in the filings.

The state can’t produce a single South Carolina doctor who’ll testify they’ve received “communications from Lilly regarding off-label promotion of Zyprexa,” according to the filings.

The South Carolina case is State of South Carolina v. Eli Lilly & Co., 2007-CP-42-1855, Common Pleas Court for South Carolina’s Seventh Judicial Circuit (Spartanburg).

To contact the reporters on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Jef Feeley Spartanburg, South Carolina, at jfeeley@bloomberg.net.

Pfizer's huge fine: A disturbing trend Do the increasing penalties against drug companies really cure the problem?

Salon.com
By Vincent Rossmeier
Sep. 03, 2009 |

$2.3 billion: That's the price pharmaceutical giant Pfizer agreed to pay in a settlement Wednesday over its misleading marketing for the painkiller Bextra, the antipsychotic Geodon, the antibiotic Zyvox, and another painkiller, Lyrica. It's a record settlement that included the highest fine charged in U.S. history and came as the result of a lengthy Department of Justice investigation into healthcare fraud.

Though Pfizer voluntarily withdrew Bextra from the market in 2005, in the settlement, the company concedes that they had pushed doctors to prescribe unsafe doses of the drug prior to that point. The drug was approved by the FDA in 2001 for the treatment of pain associated with menstrual cramps and arthritis, but Pfizer encouraged its sales representatives to entice doctors to prescribe the drug in doses higher than those approved by the FDA. The escalated doses increased the chances that users of the drug would suffer a heart attack or a stroke. Pfizer also marketed Zyvox as a treatment for specific kinds of bacteria on which the drug had no effect.

A former Pfizer sales representative, John Kopchinski, whose questioning of the company's marketing tactics helped lead to the investigation, will receive over $51 million from the settlement. Kopchinski lost his job as a result of blowing the whistle on Pfizer's illegal schemes. Pfizer will have to pay settlements in 42 states and the District of Columbia.

However, the hefty cost will probably barely affect Pfizer's overall profit margins: The company purchased rival Wyeth in January for $68 billion and had revenues of over $48 billion last year. As the New York Times pointed out, "While the government said the fine was a record sum, the $2.3 billion fine amounts to less than three weeks of Pfizer’s sales." This is the fourth time Pfizer has reached a settlement over fraudulent marketing since 2002.

In the wake of Pfizer's settlement, here's a look at some of the larger Big Pharma settlements in recent history:

* Zyprexa, 2009 -- Eli Lilly was accused of selling its top-selling drug Zyprexa widely -- even to those people without bipolar disorder or schizophrenia for which the drug was supposed to be used. The drug can cause severe weight gain, as well as increasing the risk of a patient developing diabetes. In January, Eli Lilly reached a settlement with the government for $1.4 billion.
* OxyContin, 2007 -- Introduced in 1996 by Purdue Pharma, OxyContin was advertised as a softer, gentler painkiller. However, the drug is actually highly addictive, acting like heroin if taken incorrectly. OxyContin has become a scourge to communities across the U.S. and has also led to numerous overdose deaths. Perhaps the most notorious abuser of OxyContin was conservative radio talk show host Rush Limbaugh. In 2007, Purdue Pharma agreed to cough up $634.5 million in fines for its false claims about the drug.
* Vioxx, 2007 -- When 47,000 people are involved in a lawsuit against you, you know you have a problem. Thus, Merck, the maker of the painkiller Vioxx, reached a $4.85 billion settlement in 2007 to get rid of all the pending cases brought against it due to Vioxx's negative side effects. Vioxx was found to double the risk of heart attacks and strokes and thus Merck pulled the pill from pharmacies in 2004.
* Serostim, 2005 -- Serono, a Swiss technology company, had to pay $700 million in 2005 as a result of its fraudulent marketing for the AIDS drug Serostim. Serono developed a test that inflated the seriousness of the symptoms of a patient afflicted with AIDS and also sponsored junkets for doctors in order to get them to prescribe the drug.
* Neurontin, 2004 -- Pfizer reached a settlement of $430 million to end criminal and civil charges about its practice of paying doctors to prescribe Neurontin, a drug for epilepsy, to patients with bipolar disorder, for which it was not approved.
* Cipro, 2003 -- Bayer reached a $257 million settlement in 2003, the largest Medicaid fraud settlement at that time, after being charged by federal investigators with overcharging for the antibiotic Cipro. Bayer, however, didn't act alone: It received advice on how to go about the scheme from healthcare giant Kaiser Permanente.
* Paxil and Flonase, 2003 -- GlaxoSmithKline allegedly didn't want to miss out on all the fun and profits Bayer was having in overcharging for Cipro. It was accused of running a scheme with Kaiser Permanente to bilk Medicaid for the antidepressant Paxil and the allergy spray medication Flonase. GlaxoSmithKline paid $87.6 million in 2003 to settle the case.
* Lupron, 2001 -- TAP Pharmaceuticals Inc. came up with a clever way to get doctors to use its prostate cancer drug, Lupron, instead of those of rival drug companies: namely, pay them. TAP offered one doctor $25,000 to go back to prescribing Lupron after he'd switched to a competitor's drug. But the doctor alerted authorities, who conducted a massive sting resulting in TAP dishing out a $875 million settlement in 2001.
* Fen-Phen, 1999 -- Billed as a miracle diet drug by the drug company American Home Products Corp. (AHP), Fen-Phen was just as good at promoting heart valve disease as it was at helping people shed excess pounds. AHP removed Fen-Phen in 1997 after a damaging report showed that those who took the drug for more than two years increased their risk of developing heart valve disease by 17 percent. Though AHP agreed to pay $3.75 billion to the users of the drug, it did not have to admit to any wrongful actions in its marketing of Fen-Phen.

Pharma-funded CME gets the lash [CME- def. - Continuing Medical Education]

Fierce Pharma
By tracy
Created Jul 30 2009 - 10:37am

Continuing medical education (CME [1]) has been bastardized by pharma funding, an HHS inspector general told Congress, and needs a complete overhaul. Lewis Morris, chief counsel for the HHS office of inspector general, said that industry doesn't just shape the courses, it has also used CME to promote off-label uses. And Morris was just the first of several witnesses expected to criticize industry-funded CME during a Senate Committee on Aging hearing.

Pharma-backed CME has grown by leaps and bounds. Dow Jones reports that industry funding for medical education has more than tripled over the past 10 years to $1.2 billion. That's more than half the courses many doctors are required to take to stay current. "CME has become an insidious vehicle for the aggressive promotion of drugs and medical devices," said Dr. Steve Nissen (photo [2]), the Cleveland Clinic cardiologist who rarely minces his words.

But others--including PhRMA--protest that the industry can offer the best, most up-to-date info on new treatments, and that drugmakers are an important part of medical education. Dr. Thomas Stossel of Harvard Medical School--who has started an organization balking at the current backlash against pharma funding and doc payments--told the committee that companies make an important contribution to scientific understanding of disease. "I want the best information. I don't care who pays for it," Stossel said (as quoted by Dow Jones). "The nonprofit societies just can't get up to speed fast enough."

The hearing is just the latest salvo in an ongoing battle over how much pharma funding is too much, and whether all financial ties between industry and doctors, academia, and CME should be disclosed. Medical schools and hospitals have established conflicts-of-interest policies, some of which are so strict they don't even allow reps to hand out logo notepads. Drugmakers have promised to disclose payments to doctors [3], and some have bowed out of CME funding. This particular Senate committee is considering legislation that would require companies to disclose doc payments. The debate is far from over.

Eli Lilly Ghostwrote Articles to Market Zyprexa, Files Show

Bloomberg News

By Elizabeth Lopatto, Jef Feeley and Margaret Cronin Fisk

June 12 (Bloomberg) -- Eli Lilly & Co. officials wrote medical journal studies about the antipsychotic Zyprexa and then asked doctors to put their names on the articles, a practice called “ghostwriting,” according to unsealed company files.

Lilly employees also compiled a guide to hiring scientists to write favorable articles, complained to journal editors when publication was delayed and submitted rejected articles to other outlets, according to documents filed in drug-overpricing suits against the Indianapolis-based company, the largest manufacturer of psychiatric medicines.

Drugmakers’ use of ghostwriters has created “a huge body of medical literature that society can’t trust,” said Carl Elliott, a University of Minnesota bioethicist who has written about the practice.

Lilly sought to make Zyprexa “the number one selling psychotropic in history,” according to a 2000 plan distributed to its product team. The memo was among more than 10,000 pages of internal documents unsealed last month in lawsuits by insurers and pension funds seeking to recoup money spent on the drug. They allege Lilly exaggerated Zyprexa’s effectiveness.

“Plaintiffs are releasing one-sided, cherry-picked documents obtained in discovery to selected news media in an effort to try their cases” there, said Lilly spokeswoman Marni Lemons. “Lilly remains prepared to defend ourselves against all of these allegations in the appropriate venue, a court of law.”

FDA Rules

The U.S. Food and Drug Administration doesn’t have a guidance document or regulations specific to ghostwriting, said Karen Riley, an agency spokeswoman.

Lemons declined to answer specific questions about ghostwriting. There is no evidence in the unsealed documents that doctors were paid to sign off on the ghostwritten items.

“We believe these documents describe the marketing of a widely promoted and powerfully dangerous psychotropic medication,” said Thomas Sobol, lead attorney for the insurance plans. “Transparency is critically important.”

Lilly isn’t the only drugmaker to use ghostwriters to win favorable play in medical journals. Merck & Co. and Pfizer Inc. also have faced claims they used ghostwriters as part of their marketing plans.

In May 2008, Whitehouse Station, New Jersey-based Merck agreed to pay $58 million to 29 states and to stop ghostwriting articles to resolve claims that its advertisements for the withdrawn painkiller Vioxx hid the drug’s health risks.

Improper Marketing

Employees at Merck worked alone or with publishing firms to write manuscripts on Vioxx that were published under the names of academic medical experts, according to an analysis published in the Journal of the American Medical Association in April 2008. Merck pulled Vioxx from the market in 2004.

Pfizer paid $60 million to 33 states in October to settle claims it improperly marketed its Bextra and Celebrex pain relievers. New York-based Pfizer agreed to halt off-label marketing of the medicines and stop ghostwriting about them. It withdrew Bextra in April 2005. Celebrex is still on the market.

“Every company, to some degree, has probably engaged in ghostwriting,” said Joseph Ross, an assistant professor at Mount Sinai School of Medicine in New York and the author of the JAMA paper on Merck’s ghostwriting practices. “It’s a challenging thing to discover without litigation, since it’s mutually beneficial to physicians and people within the industry to keep it under wraps.”

Untrustworthy

In 1996, Wyeth hired Excerpta Medica Inc., a New Jersey- based medical communications firm, to write 10 articles promoting drugs aimed at treating obesity, Elliott wrote in “Ghost Marketing: Pharmaceutical Companies and Ghostwritten Journal Articles,” published in 2007 in the journal Perspectives in Biology and Medicine.

Wyeth, which at the time was touting its fen-phen diet combination for weight loss, agreed to pay Excerpta $20,000 per article, according to Elliott.

“Wyeth kept each article under tight control, scrubbing drafts of any material that could damage sales,” he wrote. Pfizer is acquiring Madison, New Jersey-based Wyeth for $68 billion in cash and stock.

Doug Petkus, a spokesman for Wyeth, declined to immediately comment.

Antipsychotics have become the U.S.’s best-selling class of drugs, with 2008 sales of $14.6 billion, according to IMS Health, a health-care consulting firm.

The insurers suing Lilly contend it should pay as much as $6.8 billion in damages for downplaying Zyprexa’s health risks and marketing the drug for unapproved uses to increase profits.

Top Selling

The antipsychotic is Lilly’s top-selling drug, with $4.7 billion in sales last year, accounting for almost a quarter of the company’s revenue. Lilly officials said in 2002 they sought to boost Zyprexa sales to $6 billion within four years, according to a document unsealed in the insurers’ case. Bloomberg News obtained the documents after U.S. District Judge Jack Weinstein in Brooklyn, New York, made them public on May 1. In September, Weinstein allowed insurers and other payers to sue Lilly as a group after finding “sufficient evidence of fraud” to let the case go to trial. Lilly appealed that ruling.

Lilly agreed in January to pay $1.42 billion to the U.S. government and more than 30 states to settle off-label marketing allegations over Zyprexa. The agreement included a $615 million penalty for a federal criminal charge of illegally marketing the drug to elderly patients for off-label uses.

The company also faces suits from 12 states over its Zyprexa marketing practices. Cases brought by South Carolina and Connecticut officials are set for trial later this year.

Positive Light

The unsealed documents support the claims of the insurers suing Lilly, said Sobol, of Seattle-based Hagens Berman Sobol Shapiro LLP. His firm provided Bloomberg News with copies of the internal papers. Bloomberg News filed a letter brief asking the court to unseal the documents.

Ensuring that medical journal articles presented Zyprexa study results in a positive light was one way for Lilly to reach its sales goal, company officials said in its plan, according to the documents.

To do that, Lilly officials hired ghostwriters to prepare submissions to journals such as Progress in Neurology and Psychiatry, according to the unsealed documents.

“The paper for the Progress in Neurology and Psychiatry supplement has been completed and sent to the journal for peer review,” Kerrie Mitchell, an employee of the public relations agency Cohn & Wolfe, wrote in a Feb. 23, 2001, e-mail to Michael Sale, a Lilly marketing official. The message was among the unsealed files.

“We ‘ghost’ wrote this article and then worked with author Dr. Haddad to work up the final copy,” Mitchell said in the e- mail. Eric Litchfield, a spokesman for Cohn & Wolfe, didn’t immediately return a call seeking comment.

Draft Approved

Peter Haddad, a researcher at Greater Manchester West Mental Health NHS Foundation Trust in the U.K., was listed as the article’s lead author. Haddad didn’t respond to requests for comment.

The global Lilly team approved a draft of Haddad’s ghost- written paper in 2000, according to the unsealed documents. Lilly’s U.K. team had to give final approval to the article because Progress in Neurology and Psychiatry was based there, Mitchell said in the February 2001 e-mail.

Ghostwriter’s Guide

To ensure that ghostwritten Zyprexa articles met Lilly’s standards, company officials issued a guide to preparing them, according to the unsealed files.

The guide, “Medical Press: Pre-Launch Feature Outline,” was undated. It’s unclear from the documents which teams in Lilly’s top 10 markets for the drug received it.

The primer provided a how-to for writing articles, such as instructing the author to use Zyprexa’s generic name, olanzapine, instead of its brand moniker, according to the documents. Scientists in medical research traditionally refer to a drug’s chemical name.

The guide also offered tips on how to find authors by identifying a “key opinion leader” and providing them either an outline of the article or a finished copy. Authors could include a study investigator, an advisory board member or “Lilly-friendly” doctor, according to the documents.

A sample article laid out how a Lilly employee may find a doctor to ghostwrite a submission that would “prepare the market” for the launch of an intramuscular injectable version of the drug. It also offered an outline for the contents of the article, beginning with background on another drug, droperidol, which had been withdrawn from several countries.

The Article

The article, with the suggested title “Filling the Droperidol Gap,” noted that an anti-anxiety drug could be used, before going on to say, “more advanced IM treatments may soon be available to provide a superior alternative.” The article explained that injectable Zyprexa had just received approval from the FDA, and recounted its clinical trial history.

“The anticipated forthcoming availability of atypical antipsychotics in an IM formulation could be a major step forward in the treatment of acute agitation associated with schizophrenia,” the sample article concluded.

Lilly officials e-mailed journal editors to complain about delays in publishing favorable Zyprexa articles, according to the unsealed documents.

In one instance, Lilly employees contacted the Journal of Clinical Epidemiology about delays of an article criticizing a previously published piece linking Zyprexa, as well as the class of atypical antipsychotics, to diabetes.

E-Mail Exchange

After Suraja Roychowdhury, Lilly’s senior scientific communications coordinator, wrote to the journal in November 2002, its editor, Andre Knottnerus, replied in an e-mail that it was “a bit strange to be contacted via the Lilly product team. “Dr. Buse and coauthors can contact us directly next time.”

Knottnerus was referring to the manuscript’s lead author, John Buse, a former president of the American Diabetes Association. A copy of the Nov. 22, 2002, e-mail was included in the unsealed documents.

Patrizia Cavazzoni, a Lilly staffer who co-wrote the article, e-mailed Buse on Jan. 9, 2003, seeking permission to send a separate e-mail asking to expedite publication. She also asked Buse if he would prefer “to send it in your name?”

It isn’t clear from the e-mail chain whether the e-mail was sent by Buse or Cavazzoni. On Jan. 22, 2003, Buse e-mailed Cavazzoni to say he hadn’t heard anything and to request Knottnerus’s telephone number, according to the documents.

The Zyprexa article by Buse and Cavazzoni was a review of another submission that had previously appeared in the journal, according to the documents. That article summarized previous medical literature on atypical antipsychotics, and found Zyprexa had an increased risk of causing diabetes relative to the class.

Toned Down

Buse, a professor of medicine at the University of North Carolina, Chapel Hill, e-mailed his comments on the article to Cavazzoni for her review on Jan. 26, 2003.

Buse indicated in the e-mail that he was worried he had been “unduly harsh” in his review of the earlier piece. He told Cavazzoni: “If you think I should tone it down, suggest a way,” according to the unsealed documents.

There was no response to the e-mail in the documents.

“I don’t remember anybody at Lilly ever approaching me for ghostwriting,” Buse said in a phone interview. Throughout his career, others had offered to put his name on papers, and he declined, Buse said. He said he couldn’t recall the names of anyone involved.

“Ghostwriting used to be quite common,” Buse said. “Now I think it’s uncommon. I’ve been at meetings where clinical trials are being completed and there’s a discussion of who’s going to write which papers, and it’s quite clear everyone’s sensitive to this issue.”

Long Period

Buse said in a Nov. 28, 2006, deposition that working with drugmakers over a long period of time can change the way doctors think about clinical problems.

“It’s sort of like Stockholm Syndrome,” Buse said in the deposition, referring to a psychological phenomenon in which kidnap victims begin to sympathize with their captors.

“I’m not saying that the pharmaceutical industry captures me,” Buse said. “But to the extent that the relationship has something above and beyond medicine, science, you know, it could cloud one’s judgment.”

Buse added that many researchers develop emotional attachments to drugs they’ve discovered or studied extensively.

‘Natural Tendency’

“There’s this natural tendency for people to fall in love with your drug: it’s like your child,” Buse said. “So you have a hard time accepting criticism.”

Barton Moffatt, a Mississippi State University bioethicist who has written about ghostwriting practices among drugmakers, said there’s a growing consensus that doctors who lend their names to such articles are engaging in “academic misconduct.”

“No one has been fired yet over this, but I think the trend is moving in that direction,” Moffatt said. “I think over the last 15 to 20 years, putting your name on a ghostwritten article has come to be seen as plagiarism.”

Lilly rose 47 cents, or 1.4 percent, to $34.38 in New York Stock Exchange composite trading yesterday. The shares have fallen 15 percent this year.

The case is UFCW Local 1776 and Participating Employers Health and Welfare Fund v. Eli Lilly & Co., 05-04115, U.S. District Court, Eastern District of New York (Brooklyn).

Lilly ghostwrote Zyprexa studies, documents show

Fierce Pharma

June 12, 2009

By Tracy Staton

Eli Lilly prodded doctors to prescribe Zyprexa for dementia patients even though it had data showing the drug didn't help those patients, Bloomberg reports, based on internal company documents made public as part of a lawsuit. Plus, the company "ghostwrote" journal articles supporting the atypical antipsychotic, then scouted for doctors to append their bylines, the documents show. Lilly also compiled a guide to hiring scientists to write favorable articles.

Aggrieved by the document release, Lilly defended itself: "Plaintiffs are releasing one-sided, cherry-picked documents obtained in discovery to selected news media in an effort to try their cases in the media," Lilly spokeswoman Marni Lemons told Bloomberg, adding that the company will fight the lawsuit. She wouldn't answer specific questions, however.

The unsealed documents were submitted as evidence in lawsuits against the drugmaker, filed by health insurance companies and pension plans that want to be repaid for their spending on Zyprexa. The plaintiffs are asking for as much as $6.8 billion in damages. Lilly already settled off-label marketing claims with the U.S. government and several states--for $1.42 billion, including a $615 million criminal penalty. The company has paid $1.2 billion to settle individual patient claims, Bloomberg reports. For comparison's sake, Zyprexa sales for 2008 amounted to $4.69 billion, down slightly from $4.76 billion in 2007.

Mass. Medicaid to get $22.5 million in Lilly settlement

The Boston Herald
Monday, May 18, 2009

Eli Lilly & Co. has agreed to pay nearly $22.5 million to the Massachusetts Medicaid program to resolve allegations that the company engaged in the improper marketing of its antipsychotic drug, Zyprexa, according to the Massachusetts Attorney General’s Office.

The Massachusetts payment is part of a national settlement that has returned more than $700 million to Medicaid programs nationwide and an additional $65 million to other federal health care programs. Attorney General Martha Coakley’s office served as the lead representative and negotiator for a coalition representing 36 states and the District of Columbia.

Comments (1)
KevinH
Getting money back is good but if leading executives at Eli Lilly intentionally covered up the diabetes side effect of Zyprexa, shouldn't they be criminally prosecuted for intentionally harming and even killing people?