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.

Beware pf ghost(writer)s of medical research, Well placed journal articles sell more pills than sales staff do

Straight Goods News
by Dr. Marc Andre Gagnon and Dr. Sergio Sismondo
June 28, 2011

The medical research world has been concerned about the problem of ghostwriting for more than a decade. The issue has been repeatedly raised in the mainstream media over the past few years, with most of the commentary focused on the ethics of academics serving as authors on papers they did not write and on some of the most egregious actions by pharmaceutical companies.

Big Pharma firms spend twice as much on promotion as on research and development (R&D).
But these efforts miss the ways in which Big Pharma has developed new forms of medical research to serve its own interests.

Big Pharma firms spend twice as much on promotion as on research and development (R&D). Worse, more and more medical R&D is organized as promotional campaigns to make physicians aware of products. The bulk of the industry's external funding for research now goes to contract research organizations to produce studies that feed into large numbers of articles submitted to medical journals. Internal documents from Pfizer, made public in litigation, showed that 85 scientific articles on its antidepressant Zoloft were produced and coordinated by a public relations company. Pfizer itself thus produced a critical mass of the favourable articles placed among the 211 scientific papers on Zoloft in the same period. Internal documents tell similar stories for Merck's Vioxx, GlaxoSmithKline's Paxil, Astra-Zeneca's Seroquel, and Wyeth's hormone-replacement drugs.

To promote the now-notorious Vioxx, Merck organized a ghostwriting campaign that involved some 96 scientific articles. Key articles did not mention the death of some patients during clinical trials. Through a class action lawsuit against Vioxx in Australia, it was discovered that Elsevier had created a fake medical journal for Merck — the Australasian Journal of Joint and Bone Medicine — and perhaps 10 other fake journals for Merck and other Big Pharma companies.
In another example, GlaxoSmithKline organized a ghostwriting program to promote its antidepressant Paxil. According to internal documents made public in 2009, the program was called "Case Study Publication for Peer-Review", or CASPPER, a playful reference to the "friendly ghost". Such strategies are not exceptions; they are now the norm in the industry.

Most new drugs with blockbuster potential are introduced accompanied by 50, 60, or even 100 medical journal articles. Any firm that refused to play this game in the name of ethics would likely lose market share. Profits in the pharmaceutical industry depend on companies' capacity to influence medical knowledge and create market share and market niches for their products.
In 2008, research showed that pharmaceutical companies systematically failed to publish negative studies on their SSRIs, the Prozac generation of antidepressants. Of 74 clinical trials, 38 produced positive results and 36 did not: 94 per cent of the positive studies were published, but only 23 per cent of the negative ones were, and two-thirds of those were spun to make them look more positive. Physicians reading the scientific literature got a biased view of the benefits of SSRIs. This helps to explain the huge number of antidepressant prescriptions, in spite of the fact that, according to a meta-analysis in JAMA in January 2010, for 70 per cent of people taking SSRIs, the drug did not bring more benefits than a placebo. Compared to placebos, however, SSRI antidepressants can result in serious adverse drug reactions.

There we see one of the problems with the ghost management of medical research and publication. Pharmaceutical companies want upbeat reports on their drugs. They design, write, and publish studies that are likely to show their drugs in positive lights — and there are myriad ways to do so. Ghosts sometimes bend the truth, and sometimes even commit fraud, with grave results.

Why do academics serve as authors on scientific articles they did not write, using research they did not perform? Because they are rewarded, both by their universities and by their colleagues for how much they publish and for its prominence. Pharmaceutical companies and their agents are very good at placing articles in prestigious journals, and then make them even more prominent by having their armies of sales reps circulate them and talk them up.
Researchers who serve as authors on studies and analyses (perhaps scientifically correct) that are favourable to the industry can expect to see these articles increase their prestige and influence, and possibly even funding.

What happens, however, when a researcher produces studies and analyses (also scientifically correct) showing that some products are dangerous or inefficient, as some did about Vioxx before the scandal broke? Reading Merck's internal e-mails, revealed during the class lawsuit, it was exposed that the company drew up a hit list of "rogue" researchers who needed to be "discredited" or "neutralized" — "seek them out and destroy them where they live," reads one e-mail. Eight Stanford researchers say they received threats from Merck after publishing unfavourable results.

In the ghost management of research and publication by drug companies we have a new model of science. This is corporate science, done by many unseen workers, performed for marketing purposes, and drawing its authority from traditional academic science. The high commercial stakes mean that all of the parties connected with this new corporate science can find reasons or be induced to participate, support, and steadily normalize it. It also biases the available science by pushing favourable results and downplaying negative ones — and sometimes through outright fraud. As long as pharmaceutical companies hold the purse strings of medical research, medical knowledge will serve to market drugs, not to promote health. And as long as universities grovel for more partnerships with these companies, the door will remain wide open to proceed with the corruption of scientific research.

Dr Marc-André Gagnon is assistant professor with the School of Public Policy and Administration at Carleton University. He is also an expert advisor with EvidenceNetwork.ca, a comprehensive and non-partisan online resource designed to help journalists covering health policy issues in Canada. Dr Sergio Sismondo is professor of Philosophy and Sociology at Queen's University. His current research is on the pharmaceutical industry's relationships with academic medicine and practicing physicians.

This article previously appeared in Troy Media.

Drug Company to Pay Half a Billion Dollar Fine for ILLEGAL Marketing

Mercola.com
The World's #1 Free Natural Health Newsletter
May 20, 2010

Drugmaker AstraZeneca has agreed to pay $520 million to settle federal investigations into marketing practices for its schizophrenia drug Seroquel. This makes AstraZeneca the fourth big drug company in the last three years to admit to federal charges of illegal marketing of antipsychotic drugs.

The company was accused of misleading doctors and patients by spotlighting favorable research while failing to adequately disclose studies showing that Seroquel increases the risk of diabetes.

The New York Times reports that:

"AstraZeneca still faces more than 25,000 civil lawsuits filed on behalf of patients contending that the company did not disclose the drug's risks. "

Sources:
New York Times April 26, 2010
The United States Department of Justice April 27, 2010


Dr. Mercola's Comments:

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The illegal and unsafe actions of drug companies make headlines yet again as AstraZeneca agrees to pay a $502 million fine to settle the federal charges of using illegal marketing tactics to drive up sales of its blockbuster drug Seroquel.

Although this sounds like a lot of money, it's little more than a symbolic slap on the wrist when you consider how much money they've made from the drug already. According to the New York Times, the antipsychotic drug Seroquel pulled in $4.9 BILLION in sales last year!

You see from the company's perspective it's merely another cost of doing business. For every dollar they are fined they are making ten. While not all of their profit was due to their illegal marketing practices, the fine was only a one-time fine, while revenues have poured in over many years and will continue to do so in the future, as a result of these illegal activities.

How Did Potent Antipsychotics Become the Top Selling Drug Category in US?

Amazingly, and something that not even I had realized until this article was being written, is that this class of antipsychotics has now surpassed cholesterol-lowering drugs as the top-selling category of drugs in the US!

This fact, in and of itself, should be a red flag that something has gone seriously awry, because no nation could possibly have that many psychotic residents.

And that's just... We don't.

Using illegal marketing tactics to promote the use of Seroquel and other drugs like it has greatly expanded the sale of these types of drugs for far less serious, and at times completely unrelated, ailments.

Making matters even worse, they've also been heavily promoted for seniors and children - groups in which this drug can be far more dangerous.

Seroquel has been found to cause rapid weight gain and diabetes, for example. And seniors with dementia are at a higher risk of death when taking this drug. These are just a couple of reasons why Seroquel has been unable to gain FDA approval for certain uses. And yet, AstraZeneca, like so many other drug companies, chose to put profits before safety and health once again.

Puny Fines after Making Massive Illegal Profits Seem to Be the Norm

Just last month I discussed the case of Pfizer, the world's largest pharmaceutical company, that was "punished" with a fine that amounted to three month's worth of profit for the illegal marketing of the painkiller Bextra.

In 2005, when Bextra was pulled from the market due to its increased risks of heart attack and stroke, about half of its $1.7 billion in profits that year were due to unapproved off-label uses.

There's no doubt that Seroquel's blockbuster status and massive sales are in large part due to dangerous off-label uses as well.

Seroquel was approved by the FDA in September 1997 for "the treatment of manifestations of psychotic disorders."

Three years, later, the FDA actually considered NARROWING its approval to the short term treatment of schizophrenia only. However, by January, 2004, the drug was approved for the short term treatment of acute manic episodes associated with bipolar disorder (bipolar mania), and two years later, they also approved it for bipolar depression.

Schizophrenia and bipolar disorder are serious mental disorders that in many cases may warrant drug treatment, at least short term. However, AstraZeneca also pushed Seroquel for things like anger management, ADHD, Alzheimer's disease, and even difficulty sleeping!

No federal criminal charges have been filed against the company, but I wonder if that wouldn't be justified. After all, they're promoting a potent drug for diseases that they were never formally studied or approved for.Without this important proof of safety and effectiveness, they have put countless human lives at risk for serious side effects, including premature death.

How is this NOT a crime?

But wait, of course no criminal charges will be filed because, just like Wall Street bankers, these companies are "too big to fail". What a load of horse manure, pardon my language. Nevertheless, that is what happens when your profits are so large you can afford to lobby and payoff the right people in government, to effectively insulate you from any prosecution.

Yes these companies are VERY clever.

Off-Label Use of Drugs Increase Your Risk of Harmful Side Effects

While doctors can legally prescribe FDA-approved medications off-label for any use, drugmakers are not allowed to market them for anything other than approved uses.

Many physicians, however, for all intents and purposes rely nearly exclusively on drug reps to educate them about the indications for drugs and what other leading physicians are using them for, and drug companies are not shy about suggesting off-label uses.

As demonstrated by this recent rash of lawsuits, drugmakers actually go several steps further, by fraudulently manipulating doctors into prescribing their drugs for ailments that they could not gain approval for in the first place.

Complicating matters further is the fact that it can be difficult for physicians to determine what certain medications are approved for, based on the Summary of Product Characteristics (SPC) -- the information given to physicians about drugs.

In fact, according to a 2009 study, it was impossible for physicians to determine the licensing status for about 20 percent of drug... which means it's even more likely they'll rely on drug reps' opinions and suggestions.

Off-label drug use is actually extremely common, for drugs of all kinds.

According to studies conducted in Britain, when a "suitable alternative" did not exist, doctors used unlicensed or "off label" medicine in:

* 90 percent of babies in neonatal intensive care units
* 70 percent of children in pediatric intensive care units
* Two-thirds of children on general medical and surgical pediatric wards in the UK

According to two of the studies, children taking these medicines face a higher risk of side effects, with one estimate suggesting they suffer up to three times more side effects as a result.

This is why it's so important that drug companies refrain from these illegal marketing tactics, because doctors mislead by their pharmaceutical reps are literally putting their patients' lives at risk!

As Michael L. Levy, U.S. Attorney for the Eastern District of Pennsylvania stated:

"People have a legal right to know that pharmaceutical companies are marketing their drugs only for uses approved by the FDA and that their doctors' judgment has not been affected by misinformation from a pharmaceutical company trying to boost revenues."

In the end that's all it is... Promoting drugs for off-label uses has nothing to do with trying to help more people. It's all about making more money off a drug that has a limited market.

The Dangerous Side Effects of Seroquel

It's hard to believe that anyone would agree to take such a potent antipsychotic unless they were suffering from a serious mental illness, but the numbers prove that plenty of people do.

This choice can be a devastating one. (And remember, it IS a choice. Your doctor cannot force you to take any drug, and in many cases, people see an ad on TV and voluntarily ask for the drug.)

The potential side effects of taking Seroquel are numerous, and some of them can be fatal.

For example, elderly patients who have lost touch with reality as a result of dementia are at an increased risk of death, which is why Seroquel is not approved for this use.

Seroquel can also increase your risk of suicidal thoughts and actions, especially in children, teens and young adults.

It's worth noting that the list of serious side effects is far longer - and these reactions are FAR MORE COMMON - than the list of the non-life threatening adverse reactions.

For example, some of the most common side effects of Seroquel include:

* High triglycerides in 23 percent of patients
* Weight gain in 23 percent of patients
* Agitation in 20 percent of patients
* High cholesterol in 17 percent of patients

Meanwhile, mild side effects like nausea, congestion and stomach pain are far less common, occurring in only two to ten percent of patients.

Be One Less Victim

Fortunately, you can avoid becoming the next victim by taking control of your health. This means educating yourself about your condition, any symptoms you may have, the drugs your doctor recommends, and other alternatives.

I can't stress this enough: You are NOT REQUIRED to take a drug recommended by your doctor.

You ARE allowed to demand detailed answers to any questions you have about the drug prescribed to you, and if you decide that the risks are greater than the potential benefit, you can "just say no," and seek out alternatives.

Remember, this is your life, and your health, so take an active role in it!. If your doctor pressures you to take it, remember that there are other doctors out there and it is probably best to find someone else who will actually LISTEN to you.

Leading a healthy lifestyle and staying educated about drug-free and non-invasive treatment options are the keys to your long-term well-being.

It's unfortunate, but many are still completely unaware of the pervasive corruption that exists within the field of pharmaceuticals. You need to understand that any corporation's primary and essential responsibility is to their shareholders -- NOT to you.

Drug companies have accumulated so much wealth, power and political influence that they're able to escape any serious consequences linking them to profiting from permanently disabling, crippling or even killing consumers. This is why it's so imperative you make your own informed decisions rather than blindly trusting the system.

Physicians must also, en masse, come to the realization that drug reps cannot be trusted. This may be one of the most difficult areas to change, as the pharmaceutical industry has devised a highly effective system of indoctrination and very specific psychological techniques to manipulate physicians.

Doctors usually believe they are immune to persuasion tactics, and drug reps know just how important it is to maintain that illusion -- which is why it works so well. However, the idea that reps provide a valuable, informative service to physicians is total fiction, created and perpetuated by the drug industry, to keep this deadly, but profitable, scheme going.

Until real change takes place, I urge you to not risk your money or your life on a paradigm designed to profit from your ill health.

Instead, take control by adopting natural lifestyle strategies that will promote your body's natural healing abilities without the need for the drug companies' latest creations.

Feds found Pfizer too big to nail

CNN Special Investigations Unit
By Drew Griffin and Andy Segal,
April 2, 2010

CNN's Special Investigations Unit reveals internal company documents on Bextra and Pfizer's health care fraud. Watch at 3 p.m. ET Saturday on CNN.

VIEW VIDEO OF THIS STORY HERE:
www.youtube.com/watch?v=7ehUWAsSvFw

(CNN) -- Imagine being charged with a crime, but an imaginary friend takes the rap for you.

That is essentially what happened when Pfizer, the world's largest pharmaceutical company, was caught illegally marketing Bextra, a painkiller that was taken off the market in 2005 because of safety concerns.

When the criminal case was announced last fall, federal officials touted their prosecution as a model for tough, effective enforcement. "It sends a clear message" to the pharmaceutical industry, said Kevin Perkins, assistant director of the FBI's Criminal Investigative Division.

But beyond the fanfare, a CNN Special Investigation found another story, one that officials downplayed when they declared victory. It's a story about the power major pharmaceutical companies have even when they break the laws intended to protect patients.

Big plans for Bextra

The story begins in 2001, when Bextra was about to hit the market. The drug was part of a revolutionary class of painkillers known as Cox-2 inhibitors that were supposed to be safer than generic drugs, but at 20 times the price of ibuprofen.

Pfizer and its marketing partner, Pharmacia, planned to sell Bextra as a treatment for acute pain, the kind you have after surgery.

But in November 2001, the U.S. Food and Drug Administration said Bextra was not safe for patients at high risk of heart attacks and strokes.

The FDA approved Bextra only for arthritis and menstrual cramps. It rejected the drug in higher doses for acute, surgical pain.

Promoting drugs for unapproved uses can put patients at risk by circumventing the FDA's judgment over which products are safe and effective. For that reason, "off-label" promotion is against the law.

But with billions of dollars of profits at stake, marketing and sales managers across the country nonetheless targeted anesthesiologists, foot surgeons, orthopedic surgeons and oral surgeons. "Anyone that use[d] a scalpel for a living," one district manager advised in a document prosecutors would later cite.

A manager in Florida e-mailed his sales reps a scripted sales pitch that claimed -- falsely -- that the FDA had given Bextra "a clean bill of health" all the way up to a 40 mg dose, which is twice what the FDA actually said was safe.

Doctors as pitchmen

Internal company documents show that Pfizer and Pharmacia (which Pfizer later bought) used a multimillion-dollar medical education budget to pay hundreds of doctors as speakers and consultants to tout Bextra.

Pfizer said in court that "the company's intent was pure": to foster a legal exchange of scientific information among doctors.

But an internal marketing plan called for training physicians "to serve as public relations spokespeople."

According to Lewis Morris, chief counsel to the inspector general at the U.S. Department of Health and Human Services, "They pushed the envelope so far past any reasonable interpretation of the law that it's simply outrageous."

Pfizer's chief compliance officer, Doug Lanker, said that "in a large sales force, successful sales techniques spread quickly," but that top Pfizer executives were not aware of the "significant mis-promotion issue with Bextra" until federal prosecutors began to show them the evidence.

By April 2005, when Bextra was taken off the market, more than half of its $1.7 billion in profits had come from prescriptions written for uses the FDA had rejected.

Too big to nail

But when it came to prosecuting Pfizer for its fraudulent marketing, the pharmaceutical giant had a trump card: Just as the giant banks on Wall Street were deemed too big to fail, Pfizer was considered too big to nail.

Why? Because any company convicted of a major health care fraud is automatically excluded from Medicare and Medicaid. Convicting Pfizer on Bextra would prevent the company from billing federal health programs for any of its products. It would be a corporate death sentence.

Prosecutors said that excluding Pfizer would most likely lead to Pfizer's collapse, with collateral consequences: disrupting the flow of Pfizer products to Medicare and Medicaid recipients, causing the loss of jobs including those of Pfizer employees who were not involved in the fraud, and causing significant losses for Pfizer shareholders.

"We have to ask whether by excluding the company [from Medicare and Medicaid], are we harming our patients," said Lewis Morris of the Department of Health and Human Services.

So Pfizer and the feds cut a deal. Instead of charging Pfizer with a crime, prosecutors would charge a Pfizer subsidiary, Pharmacia & Upjohn Co. Inc.

The CNN Special Investigation found that the subsidiary is nothing more than a shell company whose only function is to plead guilty.

According to court documents, Pfizer Inc. owns (a) Pharmacia Corp., which owns (b) Pharmacia & Upjohn LLC, which owns (c) Pharmacia & Upjohn Co. LLC, which in turn owns (d) Pharmacia & Upjohn Co. Inc. It is the great-great-grandson of the parent company.

Public records show that the subsidiary was incorporated in Delaware on March 27, 2007, the same day Pfizer lawyers and federal prosecutors agreed that the company would plead guilty in a kickback case against a company Pfizer had acquired a few years earlier.

As a result, Pharmacia & Upjohn Co. Inc., the subsidiary, was excluded from Medicare without ever having sold so much as a single pill. And Pfizer was free to sell its products to federally funded health programs.

An imaginary friend

Two years later, with Bextra, the shell company once again pleaded guilty. It was, in effect, Pfizer's imaginary friend stepping up to take the rap.

"It is true that if a company is created to take a criminal plea, but it's just a shell, the impact of an exclusion is minimal or nonexistent," Morris said.

Prosecutors say there was no viable alternative.

"If we prosecute Pfizer, they get excluded," said Mike Loucks, the federal prosecutor who oversaw the investigation. "A lot of the people who work for the company who haven't engaged in criminal activity would get hurt."

Did the punishment fit the crime? Pfizer says yes.

It paid nearly $1.2 billion in a criminal fine for Bextra, the largest fine the federal government has ever collected.

It paid a billion dollars more to settle a batch of civil suits -- although it denied wrongdoing -- on allegations that it illegally promoted 12 other drugs.

In all, Pfizer lost the equivalent of three months' profit.

It maintained its ability to do business with the federal government.

Pfizer says it takes responsibility for the illegal promotion of Bextra. "I can tell you, unequivocally, that Pfizer perceived the Bextra matter as an incredibly serious one," said Doug Lankler, Pfizer's chief compliance officer.

To prevent it from happening again, Pfizer has set up what it calls "leading-edge" systems to spot signs of illegal promotion by closely monitoring sales reps and tracking prescription sales.

It's not entirely voluntary. Pfizer had to sign a corporate integrity agreement with the Department of Health and Human Services. For the next five years, it requires Pfizer to disclose future payments to doctors and top executives to sign off personally that the company is obeying the law.

Pfizer says the company has learned its lesson.

But after years of overseeing similar cases against other major drug companies, even Loucks, isn't sure $2 billion in penalties is a deterrent when the profits from illegal promotion can be so large.

"I worry that the money is so great," he said, that dealing with the Department of Justice may be "just of a cost of doing business."

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

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.

Pfizer Pays $2.3 Billion to Settle Marketing Case

New York Times
September 3, 2009

By GARDINER HARRIS
,
WASHINGTON — The pharmaceutical giant Pfizer agreed to pay $2.3 billion to settle civil and criminal allegations that it had illegally marketed its painkiller Bextra, which has been withdrawn.

It was the largest health care fraud settlement and the largest criminal fine of any kind ever.

Although the investigation began and largely ended during the Bush administration, top Obama administration officials held a news conference on Wednesday to celebrate the settlement, thank each other for resolving it and promise more crackdowns on health fraud.

“It’s another step in the administration’s ongoing effort to prosecute any individual or organization that tries to rip off health care consumers and the federal government,” said Kathleen Sebelius, secretary of health and human services.

Republicans and Democrats on Capitol Hill have accused the Obama administration of failing to crack down adequately on health care fraud, arguing that huge savings in government health programs could be found with better enforcement. The settlement had been expected. Pfizer, which is acquiring a rival, Wyeth, reported in January that it had taken a $2.3 billion charge to resolve claims involving Bextra and other drugs. It was Pfizer’s fourth settlement over illegal marketing activities since 2002.

“Among the factors we considered in calibrating this severe punishment was Pfizer’s recidivism,” said Michael K. Loucks, acting United States attorney for the Massachusetts district.

Amy W. Schulman, Pfizer’s general counsel, said that Pfizer had reformed — again.

“The reasons to trust Pfizer are because, as I have walked the halls at Pfizer, you would see that the vast majority of our employees spend their lives dedicated to bringing truly important medications to patients and physicians in an appropriate manner,” she said.

The government charged that executives and sales representatives throughout Pfizer’s ranks planned and executed schemes to illegally market not only Bextra but also Geodon, an antipsychotic; Zyvox, an antibiotic; and Lyrica, which treats nerve pain. 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.

Much of the activities cited Wednesday occurred while Pfizer was in the midst of resolving allegations that it illegally marketed Neurontin, an epilepsy drug for which the company in 2004 paid a $430 million fine and signed a corporate integrity agreement — a companywide promise to behave.

John Kopchinski, a former Pfizer sales representative whose complaint helped prompt the government’s Bextra case, said that company managers told him and others to dismiss concerns about the Neurontin case while pushing them to undertake similar illegal efforts on behalf of Bextra.

“The whole culture of Pfizer is driven by sales, and if you didn’t sell drugs illegally, you were not seen as a team player,” said Mr. Kopchinski, whose personal share of the Pfizer settlement is expected to exceed $50 million. Mr. Kopchinski left Pfizer in 2003.

Altogether, six whistle-blowers will collect $102 million from the federal share of the settlement and more from states’ shares. Forty-nine states and the District of Columbia will collect $331 million, with New York State alone getting $66 million. Only South Carolina chose not to participate in the settlement.

As news of the riches earned by whistle-blowers spread through the industry in recent years, scores of fraud cases have been filed by former drug sales representatives using a Civil War-era law that pays a bounty for fraud alerts. The cases charge that illegal drug marketing cost the federal Medicare and Medicaid program millions.

Under the agreement with the Justice Department, Pfizer will pay a $1.3 billion criminal penalty related to Bextra and $1 billion in civil fines related to other medicines. In addition, a Pfizer subsidiary, Pharmacia and Upjohn, will plead guilty to violating the Food, Drug and Cosmetic Act for its promotion of Bextra. The company has agreed to sign another corporate integrity agreement that requires senior company executives to annually certify legal compliance and mandates that Pfizer post on its Web site many of its payments to doctors.

Consumer advocates heaped scorn on Pfizer and said that illegal marketing was still common in the drug industry.

“Consumers should ask their doctor whether the medication being prescribed is F.D.A.-approved for their condition,” advised Lisa Gill, editor of Consumer Reports Best Buy Drugs. If a drug is not approved for their condition, patients should press their doctors to explain their reasoning for the drug’s use.

Almost every major drug maker has been accused in recent years of giving kickbacks to doctors or shortchanging federal programs. Prosecutors said that they had become so alarmed by the growing criminality in the industry that they had begun increasing fines into the billions of dollars and would more vigorously prosecute doctors as well.

Dr. Scott Gottlieb, a top F.D.A. official in the Bush administration who now consults for drug makers, said that government prosecutors were increasingly criminalizing “what reasonable people might argue is a reasonable exchange of important clinical information between drug companies and doctors.”

Bextra was approved in 2001 by the Food and Drug Administration to treat arthritis and menstrual cramps. The drug was not approved for the treatment of acute pain, nor was it shown to be any more powerful than ibuprofen. But Pfizer instructed its sales representatives to tell doctors that the drug could be used to treat acute and surgical pain and at doses well above those approved, even though the drug’s dangers — which included kidney, skin and heart risks — increased with the dose, the government charged. The drug was withdrawn in 2005 because of its risks to the heart and skin.

Mr. Loucks, the prosecutor, accused Pfizer of aggressive marketing tactics.

“Among other things, Pfizer did the following: Pfizer invited doctors to consultant meetings, many in resort locations. Attendees expenses were paid; they received a fee just for being there,” he said. Such weekend getaways for doctors are still common throughout the drug and medical device industries.

Top Republican officials rarely publicized drug marketing cases or appeared during news conferences about them. Eli Lilly agreed to pay $1.4 billion over its marketing of Zyprexa, an antipsychotic, in January, before President Obama took office. The announcement was made by prosecutors in Philadelphia.

Ms. Sebelius’s decision to make the Pfizer announcement in Washington suggests that the political environment for the pharmaceutical industry has become more treacherous despite the industry’s commitment to save the government $80 billion as part of efforts to change the health care system.

Copyright 2009 The New York Times Company

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).