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| AIG of drugmakers, Pfizer is too big to be guilty |
| Ann Woolner / Sep 06, 2009, 00:58 IST |
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Pfizer Inc sales folks had one tough customer in psychiatrist Stefan Kruszewski. He didn’t buy their pitch to prescribe the anti-psychotic drug Geodon to children, a use that hadn’t been approved by federal regulators. Nor did he go for the so-called off-label uses, such as treating dementia in the elderly, they suggested.
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 about 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.
But the worst for Pfizer was that Kruszewski didn’t keep it to himself. He found a lawyer, Kenney, who specialises in whistleblower cases, and they took what they had 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 US Food and Drug Administration (FDA), 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.
BEXTRA BANNED
Bextra, by the way, was yanked from the market in 2005 because it increased the risk of heart attacks. Thousands of users have sued, and Pfizer settled.
Now Pfizer, while denying almost all of the charges, is paying a record sum of $2.3 billion to settle criminal and civil government allegations. The Justice Department says the company marketed off-label uses for Bextra, Geodon, Zyvox and Lyrica and paid kickbacks to doctors for pitching and prescribing those and other drugs. We are talking everything from Aricept to Zyrtec.
“We regret certain actions taken in the past, but are proud of the action we’ve taken to strengthen our internal controls,” Amy W. Schulman, senior vice president and general counsel of Pfizer said in a statement.
VALUE OF INFORMATION
The Pfizer case shows the value of inside information, and how federal law rewards those who provide it. For blowing the whistle on the world’s largest drug company and, in some cases, for putting their livelihoods at risk, the six Pfizer whistleblowers are getting anywhere from $2.3 million to $51.5 million each, taken from the $2.3 billion settlement.
Kopchinski gets the top reward. Kruszewski, a Harvard-trained psychiatrist, is next with $29 million.
Federal and state medical programmes will get a chunk of the settlement to reimburse them for having made payments based on false claims.
However hefty the settlement, Pfizer is fortunate to avoid criminal prosecution. Given the scope of the alleged misconduct, potential for harm to the public, mistreatment of employees who insisted on following the law and its history as a repeat- offender (excuse me, make that a repeat-settler), it got off lightly.
Four times before the drug giant or its subsidiaries have been slammed by the government for the same kind of conduct.
GROWTH HORMONE
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. So, how does Pfizer get away with civil settlements given its history? The penalties have ranged from hand slaps to a light punch in the gut, none of which have hurt the company enough for things to change.
JUST LIKE AIG
But Pfizer is the pharmaceutical equivalent of insurance giant American International Group Inc (AIG), which was too interwoven into the global economy to be allowed to fail. Likewise, if Pfizer were convicted of a crime, it would face debarment from federal programmes. And that would mean that Medicaid and Medicare patients would have to either somehow pay for vital medicines the company produces or go without.
“You have to balance the desire, an appropriate desire, to punish the company against the harm to patients,” says attorney Kelton. Pfizer is again pledging to beefing up its compliance programme, and there is a way to make it credible. This time, it should put Kruszewski and Kopchinski in charge of it, assuming they still want to work.
(Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.)
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