Pfizer’s Whistleblowers

The problems at Pfizer which led to the record $2.3 billion settlement were revealed by whistleblowers. Unfortunately, it was not just individual sales representatives who were pushing for sales based on off label uses. Sales managers, who have the responsibility of noticing and preventing these abuses, were the ones pushing for these sales to earn bigger bonuses.

One of the sales reps was Stefan Kruszewski, a psychiatrist. He did not merely disagree with the promotion of unapproved off-label usage of Geodon (an anti-psychotic drug), but actively went and researched it.

Kruszewski didn’t just say no. He went and checked the research and saw Geodon could have serious cardiac side effects not mentioned by the salesmen, who boasted of its relative safety, according to his lawyer, Brian Kenney. And he noticed that Pfizer was paying his peers to promote the drug to other psychiatrists.

He got a lawyer who specializes in these kinds of cases, and they presented their information to the government. Several years earlier, John Kopchinski (also a sales rep) did not fare as well. He joined with Kruszewski and also presented his information to the government.

So did John Kopchinski, who sold Pfizer’s arthritis drug Bextra but not as aggressively as the bosses wanted. They told the sales force to pitch it for post-surgical pain, acute pain, migraines and a host of other conditions for which the drug had been rejected by the U.S. Food and Drug Administration, says Kopchinski’s lawyer, Erika Kelton.

Nor would he advise doctors to boost the recommended dosage to two, four, even eight times the amount approved, though other salespeople did.

“The sales managers were having us do what was blatantly illegal,” Kopchinski told the BBC. Those who did were rewarded financially. He refused, was fired and spent the next six years depleting his retirement funds.

There are a total of 6 whistleblowers, and the awards they are getting range from $2.3 million to $51 million.

Pfizer may really be working hard behind the scenes to make sure all their divisions, subsidiaries, and related sales teams comply with the law, but this is not the first time something like this has happened.

To resolve claims it promoted off-label uses of Neurontin, an anti-seizure drug, Warner-Lambert, owned by Pfizer, paid $430 million in 2004, and Pfizer said it would institute a compliance program.

There’s a systemic problem going on, because the Pharmacia & Upjohn Co. division involved in this most recent case were involved in the same type of off-label promotion nonsense before.

Three years later, Pfizer’s Pharmacia & Upjohn Co. divisions agreed to pay almost $35 million to settle charges related to the human-growth hormone Genotropin. Among the allegations was that the drug was being promoted as an anti- aging treatment.

That same subsidiary has again pleaded guilty, this time as part of the overall settlement with Pfizer for its promotion of Bextra.

Part of Pfizer’s growth strategy involves acquiring other companies. These companies may bring with them an ingrained corrupt corporate culture which takes some time to purge. It is important to note the difference between a company promoting a safe off-label use for a drug, versus an off-label use specifically prohibited by the FDA because of the problems it causes.

We are still hesitant to label Pfizer as evil because killing customers is not a good corporate strategy, what with the big fines and bad publicity eating into profits. Big Tobacco is not a good counter example because none of their products are safe for use, on-label, off-label, or otherwise. They do a lot of good, and huge companies like it will run into the “left hand doesn’t know what the right hand is doing” problems at one point or another. However, although Pfizer can technically blame the Parmacia & Upjohn subsidiary here, it is imperative they have a thorough internal review and toughened compliance system put in place before they even consider any new acquisitions.

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Pfizer Pleads Guilty, Pays $2.3 Billion For Off-Label Use of Bextra, Zyvox, Geodon and Lyrica

UPDATE: A warm welcome to all our guests from Little Green Footballs. Enjoy your stay, have a look around, and come back often – there’s always more cool stuff in the pipeline.

Pfizer has plead guilty and settled with the federal government for $2.3 billion. In addition, they have settled with 42 states (and D.C.) individually for a total of $33 million.

They got in trouble for promoting off label uses for the various drugs in a shady manner. By creating fake requests for information from doctors, Pfizer sales representatives sent out unsolicited details to various doctors explaining off-label uses and dosages. Those off-label uses and dosages were not approved by the FDA because they were considered unsafe.

Here’s how the fine breaks down:

• $1.195 billion, criminal fine
• $105 million, forfeited
• $1 billion, compensation to Medicaid, Medicare, and other federal healthcare programs

The actual guilty plea comes from the Pharmacia & Upjohn unit within Pfizer.

In this case it was overzealous sales reps without sufficient oversight who caused the problem, and you can be certain Pfizer will implement better controls to keep it from happening again.

All too many people have this notion that big pharmaceutical companies are evil and working against the interests of the common man. The settlement will do nothing to deter that view, but it is far from the truth. Those misconceptions derive from a lack of understanding of the drug discovery process and the high costs associated with it.

For some good perspective on this issue, lets take a look at a section from an article by Megan McArdle in The Atlantic (discussing a larger point of opposition to national healthcare):

We tend to think of innovation as a matter of a mad scientist somewhere making a Brilliant Discovery!!! but in fact, innovation is more often a matter of small steps towards perfection.  Wal-Mart’s revolution in supply chain management has been one of the most powerful factors influencing American productivity in recent decades.  Yes, it was enabled by the computer revolution–but computers, by themselves, did not give Wal-Mart the idea of treating trucks like mobile warehouses, much less the expertise to do it.

In the case of pharma, what an NIH or academic researcher does is very, very different from what a pharma researcher does.  They are no more interchangeable than theoretical physicists and civil engineers.  An academic identifies targets.  A pharma researcher finds out whether those targets can be activated with a molecule.  Then he finds out whether that molecule can be made to reach the target.  Is it small enough to be orally dosed?  (Unless the disease you’re after is fairly fatal, inability to orally dose is pretty much a drug-killer).  Can it be made reliably?  Can it be made cost-effectively?  Can you scale production?  It’s not a viable drug if it takes one guy three weeks with a bunsen burner to knock out 3 doses.

Ben Domenech, writing in the New Ledger, has this as part of a rebuttal:

The truth, as anyone knowledgeable within the system will tell you, is that private companies just don’t do basic research. They do productization research, and only for well-known medical conditions that have a lot of commercial value to solve. The government funds nearly everything else, whether it’s done by government scientists or by academic scientists whose work is funded overwhelmingly by government grants.

Derek Lowe (who actually works in the field of drug discovery) writes the following as a response to Ben in his blog, In the Pipeline:

After all, in the great majority times when we start attacking some new target, there is no drug for it, you know. We have to express the protein in an active form, work up a reliable assay using it, screen our compound collections looking for a lead structure, then work on it for a few years to make new compounds that are potent, selective, nontoxic, practical to produce, and capable of being dosed in humans. (Oh, and they really should be chemical structures that no one’s ever made or even speculated about before). All of that is “productization” research? Even when we’re the first people to actually take a given target idea into the clinic at all?

Ben continues to dig himself a hole:

So Pharma is interested in making money as their primary goal — that should surprise no one. But they’re also interested in avoiding litigation. Suppose for a moment that Pharma produces a drug to treat one non-life threatening condition, and it’s a monetary success, earning profits measured in billions of dollars. But then one of their researchers discovers it might have other applications, including life-saving ones. Instead of starting on research, Pharma will stand pat. Why? Because it doesn’t make any business sense to go through an entire FDA approval process and a round of clinical trials all over again, and at the end of the day, they could just be needlessly jeopardizing the success of a multi-billion dollar drug. It makes business sense to just stand with what works perfectly fine for the larger population, not try to cure a more focused and more deadly condition.

Derek then smacks him upside the head with some inconvenient facts:

Ummm. . .isn’t this exactly what happened with Vioxx? Merck was trying to see if Cox-2 inhibitors could be useful for colon cancer, which is certainly deadly, and certainly a lot less common than joint and muscle pains. Why didn’t Merck “stand pat”? Because they wanted to make even more money of course. They’d already spent some of the cash that would have to have been spent on developing Vioxx, and cancer trials aren’t as long and costly as they are in some other therapeutic areas. So it was actually a reasonable thing to look into. If you’re staying in the same dosing range, you’re not likely to turn up tox problems that you didn’t already see in your earlier trials. (That’s where Merck got into real trouble, actually – the accusation was that they’d seen signs of Vioxx’s cardiovascular problems before the colon cancer trial, but breezed past them). But you just might come up with a benefit that allows you to sell your drug to a whole new market.

And that might also explain why, in general, drug companies look for new therapeutic opportunities like this all the time with their existing drugs. In fact, sometimes we look for them so aggressively that we get nailed for off-label promotion. No, instead of standing pat, we get in trouble for just the opposite. Your patented drug is a wasting asset, remember, and your job is to make the absolute most of it while it’s still yours. Closing your eyes to new opportunities is not the way to do that.

Game, set, match.

People like Ben exist everywhere you go. They may actually have great intentions in mind, but they are often wrong and completely out of their element. They’re the ones who are pushing for laws to restrict your choices with a smarmy “it’s for your own good” attitude. Members of Congress are kind of like Ben, only without the benevolence and with twice the ignorance.

It is your job as a citizen to be informed of facts because merely listening to some politician run through talking points at a town hall meeting will not teach you anything. For example, take a look at this video of Barney Frank at a recent meeting, in which he discusses illegal immigrants and the proposed healthcare reform bill.

An ignorant citizen would say, “well, it is there in black and white, so I feel better about it.” The informed citizen pipes up and says, “there is nothing in the entire bill enforcing that provision, thereby making it useless and ineffective in real life.” Which citizen are you?

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