Pfizer Working With Federal Prosecutors in Probe of Drug MarketingMar 14, 2002 | Dow Jones
Pfizer Inc. (PFE) confirmed that the world's largest drug maker is working with federal prosecutors in the investigation into the marketing practices of epilepsy drug Neurontin of its acquired company Warner-Lambert Co .
"We are working with the government," said spokeswoman Mariann Caprino. However, "we are not aware of any credible evidence that Warner-Lambert made any false claims about Neurontin."
The New York drug giant's stance rebuts allegations made by a whistleblower and former Warner-Lambert employee, David Franklin, who filed a lawsuit in 1996.
According to published reports, the whistleblower lawsuit alleged Warner- Lambert aggressively promoted Neurontin to physicians for various medical conditions that the drug hadn't been approved. The Food and Drug Administration (news - web sites) approved the drug as a treatment for epilepsy, and last year, the drug maker filed for approval of Neurontin as a treatment for neuropathic pain.
Under the law, physicians can prescribe drugs for uses that the FDA hasn't approved, but a pharmaceutical company is forbidden from promoting or marketing the drug in those unapproved ways.
"The suit is six-years old ... and much of it has not come to fruition," Ms. Caprino said, adding that the original whistleblower complaint contained numerous claims, which have been either dismissed or withdrawn.
The U.S. Attorney's Office in Boston is said to be conducting a criminal and civil investigation into the marketing of Neurontin.
Federal prosecutors in Boston continues to monitor the civil case brought by Mr. Franklin, but no decision has been made to intervene in the lawsuit, said U.S. Attorney's Office spokeswoman Samantha Martin. She wouldn't confirm or deny any criminal investigation into Warner-Lambert's activities.
Mr. Franklin sued Warner-Lambert's Parke-Davis unit on behalf of the government in a qui tam action, which allows a private person to sue for a penalty that the government would receive. He had asked the federal court to seal the complaint and any written disclosures.
The federal government had 60 days to join Mr. Franklin's plight, and while it mulled over its decision to intervene in the case -- which alleged a fraudulent scheme to promote Neurontin and submission of false claims to the government -- the deadline to join was extended and the case remained sealed.
The seal was lifted in December 1999 and litigation began in earnest, but without the involvement by the federal prosecutors. The government chose to participate as friend of the court and reserved the right to intervene at a later point.
U.S. District Judge Patti Saris in June rejected some of the claims against Warner-Lambert, but didn't dismiss the case in its entirety. She let stand the allegation that a fraudulent scheme aggressively promoting Neurontin caused the submission of false claims to the government.
Mr. Franklin tried to amend his lawsuit and sue Warner-Lambert on further grounds of fraud, but the judge last month blocked the request. He alleged Warner-Lambert caused the submission of false claims by paying kickbacks to physicians who wrote prescriptions submitted for reimbursement from state and federal Medicaid agencies.
Pfizer has said it doesn't expect the lawsuit to have a significant affect on its finances. Some analysts agree, saying that even if Warner-Lambert is held liable for fraud civilly or criminally, Pfizer could withstand the hit.
"If there is a finding of something illegal, Pfizer will endure a fine, but it would not be sufficient enough to impact financials of any calendar year," said Lehman Brothers analyst Trevor Polischuk.
In 2001, the drug maker earned $7.79 billion, or $1.22 a share, on revenue of $32.26 billion. Neurontin, which is patent protected until 2017, had $1.75 billion in sales, of which analysts predict a significant portion were for off- label uses.
Mr. Polischuk admitted that if Pfizer profited egregiously from sales of Neurontin in uses that lacked any clinical benefit, the blow would affect the drug maker's performance. "I don't see that situation coming to fruition because the clinical evidence overwhelmingly supports these [off-label] indications," he added.
Pfizer has used some of that supporting evidence to file for approval of Neurontin as a treatment of neuropathic pain. The filing was made in August and the company is awaiting a FDA decision.