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