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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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September 3, 2009

A 2.3 Billion Dollar Attention-Getter

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Posted by Derek

No sooner do I write another post about pharma marketing than Pfizer finds itself paying 3.2 2.3 billion dollars in fines for doing it improperly. 1.2 billion of that is a criminal penalty, and needless to say, they've set the current record.

The issues were off-label promotion of Bexxtra, Geodon, Zyvox, and Lyrica, with the largest penalties coming from the first two. Pfizer's had three other settlements of this kind in the last few years, and that record was definitely a factor this time, as the Justice Department looked for a figure that might get the company's attention. Also supposed to get the company's attention is a five-year "integrity agreement" with the Department of Health and Human Services, but it's worth noting that the company was already supposedly operating under an earlier such agreement when it was promoting Bexxtra. I think the money has a better chance of being noticed, myself.

I think that these kinds of penalties should be levied, in case anyone's wondering. Our current system almost makes sure that it will happen over and over, but that's because we're splitting the difference between two competing principles. The first one is that physicians should have the freedom to practice medicine as they best see fit, which means that they can write prescriptions for drug uses that have not (yet) been approved by the FDA. The second principle, though, is that drug companies should not be free to promote such uses. And I agree with both of those, but sticking to both of them simultaneously leaves open a constant temptation to break the law.

But there are a lot of industries that operate under such conditions, and in each case, they're supposed to control themselves (and get hammered on when they don't). Perhaps this latest fine will be enough of an example to keep the marketing people thinking ahead a bit. If that won't do it, then the way this whole case came up might - it's another example of whistleblower laws at work. John Kopchinski, a sales rep who left Pfizer in 2003, looks to get around $50 million of the settlement for bringing key information to the government's attention, and others are involved as well. I think that's a good thing, too, a useful counterbalance to the financial incentives on the other side.

But for now, we're left with another huge black mark on the industry's reputation. Thank you, Pfizer.

Comments (16) + TrackBacks (0) | Category: Business and Markets | Regulatory Affairs | The Dark Side


1. darwin on September 3, 2009 7:29 AM writes...

Not that I defend it, but I find it curious that behavior so clear-cut egregious by Pharma is the buisness model for nutriceutical and supplement marketing.

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2. Nick K on September 3, 2009 7:30 AM writes...

What a calamitous miscalculation by Pfizer. The money they have to pay in fines could have funded the discovery and development to the clinic of three or four new drugs.

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3. TOSG on September 3, 2009 7:45 AM writes...

Nick K: Nah, it's Pfizer - you mean that it could have funded another couple of acquisitions.

(okay, okay, cheap shot)

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4. retread on September 3, 2009 8:23 AM writes...

Off label (and even anti-label) use by MDs can and has benefited patients.

Two early examples. In the 60s the label for diazepam (Valium) said it was contraindicated for epileptic convulsions which did not stop (status epilepticus) because of respiratory arrest -- probably due to the seizures not the diazepam. It was the go to drug for the condition from '66 to the end of my practicing years (2000). I'm not sure what it is presently.

The second example is the use of beta-adrenergic blocking agents to prevent migraine headaches (but only in people who are having them at least weekly -- there are plenty of such people around). This was pointed out to physicians by patients receiving them for another indication. I used them a lot for this purpose, long before the label said so and thought they worked pretty well.

Amusingly, beta blockers initially were thought to be CONTRAINDICATED in patients with heart failure -- I think it said so on the label back then (not sure). Subsequently, they became part of the treatment.

You guys wouldn't exist without organic chemistry. For why I think medical students should be required to take (and pass) it, see the latest Chemiotics II post.

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5. KB on September 3, 2009 9:06 AM writes...

I feel for John Kopchinski. Back in 2003 he probably found that many of his friends disowned him. Now with 50 million everybody(!) wants to be his friend. As for Pfizer. They just make it too easy to dislike them.

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6. barry on September 3, 2009 9:26 AM writes...

I do hope this gets Pfizer's attention There's enough and more than enough spent on legal sales and marketing without breaking the law.
Because the FDA still defines cancers by tissue-of-origin, rather than by the driving biochemical derangement, off-label use is huge in oncology. A new drug's first approval will be in cancers of the tissue chosen for the first Phase-III trial. We will then look to oncologists in the field--who will immediately try it on all sorts of cancers--to tell us which Phase-II to run next.

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7. Hap on September 3, 2009 12:19 PM writes...

1: I thamk Senator Hatch every time I hear one of those ads. I do wonder when snakes will become an endangered species, considering how many of them have to be used up to provide the substrates for the ads.

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8. RTW on September 3, 2009 7:53 PM writes...

Ya - Sure made a big impression. Only hit the stock 10 cents a share. Investors still think the synergies with the Wyeth purchase is going to turn into platnum..... As the old lady use to say "Wheres the Beef?" What they should be saying are "Where the drug candidates?"

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9. ex-Pfizerite on September 3, 2009 8:59 PM writes...

3.2 billion would be enough to keep my buddies employed while they look for work elsewhere

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10. LFree on September 3, 2009 9:34 PM writes...

What a dull bore. It's almost the end of summer, and DL has finally thrown his chemist's flask of boiling water and solvents on the current #1 company. Why focus on this positive NY Times article (and admittingly partial spin) ( ) for some forward thinking in contrast to other failing dinosaurs, when you can concentrate one's clever prose on old marketing malfeasance? Might as well slam the Wyeth thing while you're at it, indeed. So how about it, eh.

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11. londonlad on September 4, 2009 4:35 AM writes...

Most other sites are reporting the fine as $2.3Bn, not 3.2

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12. Hap on September 4, 2009 10:05 AM writes...

10: Maybe because the continued ability of drug companies to oversell their products has frittered away any trust people have in them, thus negatively influencing their ability to sell drugs (at least when they don't have a one-of-a-kind drugs or something really effective, which hasn't been happening so much lately, or else Pfizer wouldn't have turned into The Blob) and making it easier for health care reform (or, more reliably, regulators) to impinge on drug company profits, thus diminishing their ability to make money from any drug in the future. It also limits their ability to come up with new drugs, by making regulators less likely to approve them and leading to a higher data standard for doing so. Since drug companies see the US as the profit center (two posts on), decreasing their ability to sell drugs in the US impacts them worldwide, and probably other drug companies, as well.

Everybody says they have a full pipeline, but not all that many of their claims actually come to fruition. On the other hand, the boatload of money Pfizer just lost is real, as well as the loss of trust (and goodwill) it represents.

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13. Tok on September 4, 2009 12:53 PM writes...

Yeah, with gas prices out of the news and health care in focus, people may just start turning their rage against big pharma again. This was like handing them a Lusitania to rally behind.

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14. Matt on September 5, 2009 12:11 AM writes...

The off-label prescription by doctors serves a valuable role. Wearing their "we provide valuable information" hat, pharmaceuticals could help doctors pioneer the approval of new uses for existing medicine. That's good. But when marketing gets involved, there's a huge conflict of interest and no accountability to scientific data.

Perhaps there could be a neutral (industry-group-run or government-run) clearinghouse message board/forum/wiki for off-label uses, where doctors could discuss practice/results, the pharmaceutical could publish information, and the FDA could monitor. Ideally, slices of the site for each drug could be run by each company, and the whole thing would be funded by the pharmaceuticals with part of their marketing budgets.

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15. Steven Jens on September 5, 2009 9:17 AM writes...

" But there are a lot of industries that operate under such conditions, and in each case, they're supposed to control themselves (and get hammered on when they don't). "

Are there a lot of industries in which all marketing claims have to be backed by randomized trials? I've thought of this as something that makes pharma unique -- Ford can't get away with saying something blatantly false about their trucks, but they can claim their trucks are "tough" without convincing a regulatory agency that their data shows that their trucks are tougher than the preexisting standard of care.

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16. Sili on September 5, 2009 2:54 PM writes...

To what extent does off-label prescription get collated?

I think Ben Goldacre was on about this at some point - as well as other issues.

What guarantee is there that a GP isn't just prescriping according to his prejudices and confirmation bias? Does his treatments and their results get collected and analysed anywhere but in his head? Is there a problem with systematically registering off-label use, making it a "trial" that will have to pass ethics review?

As I recall Goldacre was interested in the issue of on-label use where there is little or no evidence for one treatment being better than another - that too is of course worth investigating.

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