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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: derekb.lowe@gmail.com Twitter: Dereklowe

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In the Pipeline

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September 4, 2009

Pharma Whistleblowing: How It Works

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Posted by Derek

Here's more detail on the case that led to Pfizer's 2.3 billion dollar fine/settlement, courtesy of Bloomberg. Here's how things got started, apparently:

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 they suggested, such as treating dementia in the elderly.

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.

But the worst for Pfizer was that Kruszewski didn’t keep it to himself. He found a lawyer, Kenney, who specializes 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 U.S. Food and Drug Administration, says Kopchinski’s lawyer, Erika Kelton.

The six whistleblowers in the case are getting anywhere from $2.3 million to $51 million now that the settlement has been announced (that upper figure is Kopchinski, who seems to have provided the most serious evidence). As I mentioned the other day, I think this is a good thing. It takes a lot of nerve to step up when your employer is doing something outside the limits of the law (and asking you to do it as well). A chance to make up for the certain loss of your job (and the near-certain loss of any future prospects in the field) goes a long way.

And there's an interesting perspective on why a settlement was reached:

. . .Pfizer is the pharmaceutical equivalent of insurance giant American International Group Inc., 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 programs. And that would mean that Medicaid and Medicare patients would have to either somehow pay pocket for vital medicines the company produces or go without.

Hadn't thought of that one. I wonder if any company will have the nerve to use this as a negotiating tactic? Perhaps Pfizer already did, come to think of it. . .

Comments (20) + TrackBacks (0) | Category: Business and Markets | The Dark Side


COMMENTS

1. SP on September 4, 2009 2:25 PM writes...

Why not make one of the penalties for illegally marketing drugs premature termination of patent protection? That solves the "too big to fail" problem and is really an incentive to follow the rules.
Yes, that sounds a bit ironic- "We're going to punish you for overmarketing a drug by making it legal for others to sell it instead!" but it makes sense for the approved indications- no one is saying these drugs shouldn't have been marketed at all.

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2. milkshake on September 4, 2009 3:00 PM writes...

When I was interviewing with Pfizer (in 2001), I was given a nice explanation that Pfizer likes to hire ex-military people for their sales reps. The rationale was that they were more clean-cut and organized than (for example) pharmacy program graduates, and once they were filled in on their sales pitch they tended to "stay on the message"

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3. Lucifer on September 4, 2009 4:24 PM writes...

Will this event stop pharma from going back to it's old snake-oil sales tactics?

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4. Anonymous on September 4, 2009 6:49 PM writes...

51 million to whistleblow...wow. That number seems a little high, and don't get me wrong...doing the right thing should be rewarded. Also, I understand compensation part, tough to get another job in the field, but wouldn't some of that money be better spent in other areas. I didn't read the settlement so I don't know where all the cash went, but I hope anyone affected by the off-label abuse was compensated...one big mess.

Genentech has made a tremendous amount of money through off-label use (just about everyone one of their Ab's)...which ultimately lead to FDA approval of there drugs for that off-label use (most of the time). I guess Pfizer Exec's thought that model should be given a try.

One big difference though...if it isn't life threatening, and there are other therapies out there...don't walk into someone else's garden after midnight because you think no else is there. Obviously some people thought they could make some cash and call the cops. Or thought they should call the cops and then get rewarded...tough to say. I hope the latter, but who knows. Don't get me wrong Pfizer was tipping the seesaw way farther on their side of unmorality, but these days the almighty dollar makes people pick up a phone...there are a ton of angles when an ambitious lawyer is on the other end.

Pfizer is just lucky there weren't a tremendous amounts of deaths from there dangerous sales practices. If there were, I probably wouldn't have wrote any of this, and the company would have been staring at new ways to punish pharmaceutical companies.

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5. hibob on September 5, 2009 9:28 AM writes...

@#4:
The way whistleblower laws go, if you are the first person to file the right kind of lawsuit against a company for doing something so blatantly wrong that state or federal government is forced to prosecute the company, you get a percentage of the fines or settlement. Most settlements aren't in the billion dollar range, and most whistleblower cases don't result in money going to the whistleblower, so it makes sense to have the percentage high.

"Pfizer is just lucky there weren't a tremendous amounts of deaths from there dangerous sales practices. If there were,"

This wasn't just about Pfizer not following the rules and then getting caught, they were specifically denied approval by the FDA for those uses since the data showed it was too dangerous, and then they went ahead and marketed for those uses anyway. Pfizer had to withdraw Bextra a few years ago because of its tendency to cause heart attack, stroke, and death (similar to Vioxx), and settled the resulting class action lawsuit for about a billion dollars. There were about 200 claimed deaths in the lawsuit, and some of them were probably related to off-label prescriptions.

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6. Sili on September 5, 2009 12:03 PM writes...

Call me naïve, but I'd think that it could be a huge PR boost for a company to hire a whistleblower for a prominent post.

Of course, that would then require them to be honest, so I can see the problem.

Dr Lowe, you've probally seen the latest Ben Goldacre Bad Science column. Patents and generics are really your field of expertice, and I feel in over my head. Do you have a chance to comment on it next week? - and do you care to?

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7. MoretoCome on September 6, 2009 11:43 PM writes...

Excellent commentary. Just this note.

As Pfizer has grown mainly thought acquisition of other companies, so it has also acquired their own moral cultures along the way.

Warner-Lambert is probably the best example. Years ago, even Sidney Wolfe called their "repeat offeding" (this was in the context of recurrent cover-ups of Dilantin manufacturing defects) the worst case of systemic pharma delinquency he'd ever seen.

Since then, there has been the Rezulin saga and, best known, the Neurontin case--in which the ghosts of Warner-Lambert live on (and some of its living representatives too) which Pfizer brought on board as it brought Lipitor as well (the whole point).

The pattern goes on. Upjohn and Panalba; Pharmacia and the infamous Celebrex JAMA article in which half the data were left out.

Stay tuned on Celebrex. That story ain't over.

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8. Jonadab the Unsightly One on September 8, 2009 5:53 AM writes...

> Medicaid and Medicare patients would have
> to either somehow pay pocket for vital
> medicines the company produces or go without.

I know this is going to sound harsh to some people, but you know what? Tough. Enforcing the law is more important.

In the first place, if the meds are as vital as all that, how did our society survive before they were developed? Two decades ago those drugs didn't exist, and *everyone* went without them. Soon enough the patent will expire, and other companies will be able to make them, and anyone will be able to buy them, hopefully at reasonable prices, at which point Medicare patients will have no trouble getting them.

There's a short window of time wherein the original company that developed them, in this case Pfizer, can charge an arm and a leg and try to make back their research money and some profit on top. But it's not society's responsibility to make sure they can succeed at that. If being convicted of a crime would make it harder for them, they should have thought of that BEFORE they committed the crime.

As for how much our society needs everyone to be able to have these drugs, I think there are two levels of need here, and the need to have rule of law is greater. As a society, we NEED to have the laws that are on the books enforced, and the kinds of laws we're talking about here are no exception. It would be very bad, for everyone, if drug companies could just ignore the FDA and do whatever they want.

I know people think we need everyone in our society to have the absolute latest drugs, but I think we're looking here at the difference between "I need air, water, and food" versus "I need a new car". A society cannot long survive without rule of law. It may be the single most basic need a society must have to survive. Giving everyone the latest drugs, on the other hand, may seem like a need, but when you stack it up against something *really* important, like rule of law, it's really a luxury, a luxury that we cannot afford if it comes at the expense of something so much more important.

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9. ol cranky on September 8, 2009 3:31 PM writes...

Too big to fail, I was wondering when I'd hear that and am really concerned about what additional liberties will be taken because they know they can get away with it.

. . .Pfizer is the pharmaceutical equivalent of insurance giant American International Group Inc., 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 programs. And that would mean that Medicaid and Medicare patients would have to either somehow pay pocket for vital medicines the company produces or go without.

if these are the reasons for a settlement, maybe the FTC should refuse to allow Pfizer's acquisition of Wyeth (or any other sizable company) to go through. The bigger these companies get, the less of a penalty an even multi-billion dollar settlement will be.

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10. Anonymous Big Pharma Researcher on September 8, 2009 8:53 PM writes...

Too Big To Fail in any industry risks teaching corporations the North Korean Lesson: if you're gonna break the rules, do it fast and do it big so others are afraid to stop you.

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11. CRH on September 8, 2009 10:44 PM writes...

Not for nothing, but what "vital medicines" does Pfizer produce? Seriously? Any "vital medicine" that couldn't be substituted with another available medicine? Lipitor - generic real soon so won't matter. Anything else? Too big to fail is a tiresome argument; however, in this case, it's not even applicable.

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12. milkshake on September 9, 2009 5:23 AM writes...

they did not introduce Lipitor, they bought it with the company that discovered it - like always. They are the real Borg

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13. CRH on September 9, 2009 12:43 PM writes...

I'm not saying they introduced Lipitor, but rather they do produce it; but what I'm asking is what drug does Pfizer offer that is "vital medicine" that they and only they have?

Outside of many, many people losing their jobs (and maybe that's the too big to fail argument), if Pfizer went away tomorrow would patients suffer any?

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14. milkshake on September 9, 2009 2:45 PM writes...

They have Sutent, and the Agouron HIV-protease inhibitor Nelfinavir (Viracept), and Irinotecan (Camptosar)chemo drugs.
Also they market azithromycin (Zitromax) discovered by Pleva in former Yugoslavia.
Please note all these drugs were acquired. They cant develop stuff by themselves

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15. John Thacker on September 9, 2009 3:23 PM writes...

As a society, we NEED to have the laws that are on the books enforced, and the kinds of laws we're talking about here are no exception.

Not all laws, we don't. FDR's internment camps didn't need to be enforced. The rule of law is important, but so are human rights.

In this case, it seems as though Pfizer recommended its drugs for diseases that they weren't good for. Fine. But the law doesn't require that-- even if a drug has reputable, independent, peer-reviewed scientific studies for treating a specific condition, and is approved in other countries for that condition, the drug companies (and doctors) can't advertise that fact openly, though doctors can still prescribe it, if they know about it.

Consider prazosin, for example. Plenty of independent data indicates that it works extremely well on savage nightmares caused by PTSD. But it's not yet approved, so disseminating true science can cost you Medicare and Medicaid funding.

How many lives are lost and how many lives are made worse by the FDA? Does it go too far and its costs outweigh its benefits? Many economists believe so.

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16. John Thacker on September 9, 2009 3:25 PM writes...

Fraud should be illegal, and it seems (though I don't know the details) like there was some here.

But should disseminating true science be illegal, if it's not government-approved?

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17. John Thacker on September 9, 2009 3:27 PM writes...

Fraud should be illegal, and it seems (though I don't know the details) like there was some here.

But should disseminating true science be illegal, if it's not government-approved?

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18. PA Chemist on September 9, 2009 9:38 PM writes...

I agree that $51 million for blowing the whistle is excessive. Sort of taints the idea of doing the right thing for its own sake. Like #4 said, I understand the need to compensate people for probable effects on their career, but $51 million is way more than any but a few people will ever earn in a career. Perhaps there ought to be a cap on the whistleblower awards?

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19. Jake on September 10, 2009 1:46 PM writes...

A cap on the amount of money you can make for turning someone in for breaking the law only makes sense if there's a cap on how much money you can make by actually breaking the law. Otherwise Pfizer would just pay these people to keep quiet.

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20. bromine on October 30, 2010 10:23 AM writes...

@18

>>implying that people will actually sacrifice everything to do the right thing

I wouldn't want to give up my livelyhood, especially in these tough times.

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