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Context of 'May 13, 2004: Pfizer Pleads Guilty to Charges that it Illegally Marketed Drug'

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Warner-Lambert launches a new campaign to aggressively promote its epilepsy drug Neurontin. To boost the drug’s sales, the company begins marketing the drug for uses that have not been approved by the FDA. (While it is legal for doctors to write prescriptions for “off-label” uses, drug companies are prohibited from promoting such uses.) The company’s discreet campaign claims the drug can be used to treat pain, headaches, Lou Gehrig’s disease, attention deficit disorder, restless leg syndrome, drug and alcohol withdrawal seizures, bi-polar disorder, and other psychiatric illnesses. [New York Times, 5/15/2002; Associated Press, 8/8/2003] One marketing executive is recorded on tape telling a sales representative, “If we are going to market Neurontin effectively, we have to do it for monotherapy, for epilepsy, also for pain and bipolar and other psychiatric uses.” (Neurontin is only approved for use in conjunction with other drugs—it is not supposed to be used monotherapeutically.) Independent studies later suggest that the drug is not an effective treatment for some of those unapproved uses, and in some cases, Neurontin may even make a patient’s condition worse. Furthermore, patients may suffer if a doctor takes them off an effective medication so they can take Neurontin instead. [New York Times, 5/15/2002] The company’s marketing campaign is so effective that by 2003, 90 percent of the drug’s $2.7 billion in sales is for uses not approved by the FDA. [New York Times, 5/14/2004] In addition to the promotion of off-label use, the Warner-Lambert sale representatives are instructed to press doctors to prescribe the drug at levels higher than the FDA-approved dosage. [New York Times, 5/15/2002]
Marketing tactics -
bullet Paying doctors to write favorably about the drug. In one case the company reportedly pays $303,764 to publish a textbook on epilepsy written by Ilo Leppik, a professor at the University of Minnesota. Leppik later denies that the book was a marketing tool and says the book discussed other drugs beside Neurontin. [New York Times, 3/30/2003; Associated Press, 8/8/2003]
bullet Hiring marketing firms to help write articles favorable of Neurontin. Doctors are paid to claim authorship for the articles, which are vetted by Warner-Lambert before being submitted to a journal for publication. In one case, Warner-Lambert agrees to pay a company $12,000 per article and $1,000 to any doctor agreeing to accept authorship. [New York Times, 5/15/2002]
bullet Rewarding dozens of doctors who write a high-volume of Neurontin prescriptions with consulting or speaking contracts worth tens of thousands of dollars. By 1997, Dr. B. J. Wilder, a former professor of neurology at the University of Florida, receives almost $308,000 for speeches he gives. Six other doctors get paid more than $100,000 each. And Dr. Steven C. Schachter, a neurologist at Beth Israel Deaconess Medical Center, earns $71,477 for speaking on the drug’s off-label uses. [New York Times, 3/30/2003]
bullet Paying doctors $350 a day or more to admit sales representatives into examining rooms to meet with patients, review their medical charts, and recommend treatment. This tactic, known as “shadowing,” involves approximately 75 to 100 doctors in several Northeast states. [New York Times, 5/15/2002]
bullet Instructing sales representatives to pressure doctors to write Neurontin prescriptions for unapproved uses (see April 1996-July 1996).

Entity Tags: Parke-Davis

Timeline Tags: US Health Care

David Franklin later accuses drug company Parke-Davis of instructing its sales representatives to pressure doctors to prescribe the drug Neurontin for off-label uses. This marketing tactic is part of a larger effort aimed at increasing Neurontin prescriptions for uses not approved by the FDA (see 1996-2000). “I was trained to do things and did things that were blatantly illegal,” he says. “I knew my job was to falsely gain physicians’ trust and trade on my graduate degree.… I’d tell them we had physicians across the county, some involved in clinical trials, and others who had hundreds of patients on Neurontin, all getting an extraordinary response rate. We’d make them think everyone was using it but them.… [W]e were taking people who were moderately controlled on another drug and experimenting with Neurontin. We were gambling with people’s lives.” Franklin quits after two executives pressure him to get with the program. When Franklin tells one of them that he’s leaving, the executive warns, “I can’t guarantee what is going to happen to you or your career.” [Boston Globe, 3/12/2003]

Entity Tags: Pfizer, David Franklin, Parke-Davis

Timeline Tags: US Health Care

David Franklin, a former salesman for Warner-Lambert drug company, files a lawsuit alleging that Warner-Lambert is illegally marketing its drug Neurontin for non-approved uses (see 1996-2000 and April 1996-July 1996). Franklin also says that the company’s illegal promotion of the drug is resulting in state Medicaid programs spending millions of dollars on Neurontin for non-approved uses. [New York Times, 5/15/2002]

Entity Tags: David Franklin, Parke-Davis

Timeline Tags: US Health Care

HCA Inc., the largest for-profit hospital chain in the US, reaches a settlement with the Justice Department over allegations of having defrauded the government. HCA is owned by the family of Senate majority leader Bill Frist. As part of the agreement, the company pleads guilty to 14 criminal counts and agrees to pay more than $840 million in criminal fines, civil penalties, and damages. It is the largest fraud settlement in US history. The Justice Department’s investigation found that the company had employed a variety of schemes to falsely charge or overcharge for services provided to patients covered by federal health plans. HCA billed Medicare, Medicaid, and other federal health care programs for lab tests that were not medically necessary or ordered by physicians. It billed the government for non-reimbursable expenses by disguising them as reimbursable “community education” expenses or as “management fees.” Other violations included using incorrect diagnostic codes when billing the government in order to increase its revenue, billing for services rendered to patients who did not qualify to receive them, and billing for services that were never performed. Of the total amount settled upon, $95 million is for violations committed by two HCA subsidiaries, Columbia Homecare Group Inc. and Columbia Management Companies Inc. The two companies had engaged in cost report fraud, fraudulent billing, paying kickbacks to doctors for referrals, and paying kickbacks in connection with the purchase and sale of home health agencies. [CBS News, 12/14/2000; US Department of Justice, 12/14/2002] Not all of the Justice Department’s allegations are resolved in the settlement. In spring 2003, HCA will reach another settlement over allegations of fraudulent cost reporting and kickbacks to physicians for referrals (see June 26, 2003).

Entity Tags: US Department of Justice, HCA, Inc.

Timeline Tags: US Health Care

Pfizer pleads guilty and agrees to pay $430 million to settle criminal and civil charges that Warner-Lambert, a company it acquired in 2000, marketed its epilepsy drug, Neurontin, for non-approved uses (see 1996-2000, August 1996, and April 1996-July 1996). [New York Times, 5/14/2004]

Entity Tags: Pfizer, US Department of Justice

Timeline Tags: US Health Care

An expert panel convened by the US Food and Drug Administration unanimously agrees that Celebrex, Bextra, and Vioxx “significantly increase the risk of cardiovascular events” such as heart attacks. However the panel does not believe that the risk is so great that these drugs should be banned from the market. (Vioxx was withdrawn from the market voluntarily by its manufacturer in September (see September 30, 2004).) The sales of these drugs should be permitted to continue, but only under strict conditions, the panel says. It also recommends a prohibition on direct marketing to consumers, a patient’s guide for the drug, and a black box warning—the most severe possible—detailing the drug’s cardiovascular side effects. [CNN, 2/18/2005; Washington Times, 2/19/2005] After the vote, the New York Times reveals that 10 of the panel’s 32 members had at one time been paid-consultants to the makers of the drugs in question. In analyzing the votes, the Times discovers that neither Bextra nor Vioxx would have survived the vote if the scientists with connections to the company had not voted. For both Bextra and Vioxx, the industry-connected panelists voted 9 to 1 in favor, while the experts with no ties voted 14 to 8 and 17 to 15 to ban Bextra and Vioxx, respectively. The Times notes in its article that “these votes were deeply important” for the makers of those drugs. After the votes, the shares of Merck and Pfizer increase substantially. In e-mails to the Times, eight of the panelists, responding to questions from the newspaper, say their votes were not influenced by their ties to the companies. Two of the panelists do not respond. One of the panel members, Dr. John Farrar, who has received research support from Pfizer, says, “I think FDA would have a hard time finding people who are good at what they do who never spoke to a pharmaceutical company.” But another panel member, Dr. Curt Furberg, who has no ties, says he was “uncomfortable with the Pfizer-friendly undertone” at the meeting and he felt the industry ties might have contributed to that tone. Furberg adds that it has never been proven that Celebrex, Bextra, or Vioxx offer better pain relief than ibuprofen or more than a dozen other over-the-counter drugs. Daniel E. Troy, the FDA’s former chief counsel and a longtime advocate of drug-maker interests, plays down the importance of the ties, saying that any suggestion that experts’ votes were influenced by industry connections “buys into an overly conspiratorial view of the world.” [New York Times, 2/25/2005]

Entity Tags: Daniel E. Troy, John Farrar, Curt Furberg, US Food and Drug Administration

Timeline Tags: US Health Care

Dr. Susan Molchan testifies before Congress.Dr. Susan Molchan testifies before Congress. [Source: CBS News]Dr. Susan Molchan, a former clinical researcher for the National Institutes of Health (NIH), testifies before Congress that her supervisor at NIH made a secret deal with the pharmaceutical company Pfizer that involved human tissue samples supposedly collected for the public good, but were instead used for Pfizer’s own research and garnered the company millions in profit. [CBS News, 6/14/2006] Molchan testifies before the House Energy and Commerce Subcommittee on Oversight and Investigations [The Scientist, 6/14/2006] that a collection of unused spinal fluid samples, which CBS News describes as a "a treasure trove of biological material, many painfully given up by Alzheimer’s patients" disappeared without a trace from her laboratory freezer at NIH. The samples were slated to be used for NIH studies on Alzheimer’s disease. Molchan says she was told that some of the samples were lost due to freezer malfunctions, but, "nothing solid, nothing that made sense. I never got a handle on what happened to them." [CBS News, 6/14/2006] Procuring the tissue samples alone cost the government $6.4 million, say committee staffers, who spent a year investigating the matter. "It would really be a shame if we find out that the National Institutes of Health has more control over its paper clips and trash cans than it has over its human tissue samples," says committee member Joe Barton (R-TX). [The Scientist, 6/14/2006] Molchan’s testimony, and other data gathered by Congressional investigators, prove that Molchan’s immediate supervisor, Dr. Trey Sunderland, a well-known psychiatric researcher, cut a secret deal with Pfizer at the same time Pfizer was launching and refining a new Alzheimer’s drug. "If individual scientists are making use of that tissue for their own personal gain, that’s something we need to know about it. It’s not the right thing," says House Energy subcommittee chairman Ed Whitfield (R-KY). Sunderland provided Pfizer "access" to 3,200 tubes of spinal fluid, costing the NIH and, as a result, taxpayers, an estimated $6 million. In exchange, Sunderland reportedly received $285,000 in personal compensation. Pfizer’s drug Aricept is now the top-selling drug in the world for treating Alzheimer’s, generating $1.6 billion in sales in 2004. "The more tissue samples you can collect these days and extract genetic information about risk and benefit, that’s the future of drug development around the world," says Dr. Art Caplan, a bio-ethicist at the University of Pennsylvania. The House committee finds that Pfizer itself broke no NIH rules or knew of any wrongdoing by Sunderland, who does not testify before Congress, instead invoking his Fifth Amendment right against self-incrimination. [CBS News, 6/14/2006] Sunderland himself received more than $600,000 in outside consulting and speaking fees from Pfizer from 1998 to 2004 without prior government disclosure or approval. A review by NIH’s Office of Management Assessment found that Sunderland "engaged in serious misconduct, in violation of HHS ethics rules and Federal law and regulation," the report stated. In December 2006, Sunderland will accept a plea bargain in regards to his accepting payments from Pfizer (see December 11, 2006). [The Scientist, 6/14/2006]

Entity Tags: Susan Molcher, Pfizer, Joe Barton, Pearson (“Trey”) Sunderland III, Art Capland, Ed Whitfield, United States National Institutes of Health

Timeline Tags: US Health Care

Dr. Pearson “Trey” Sunderland.Dr. Pearson “Trey” Sunderland. [Source: CreativityFound (.org)]Dr. Pearson “Trey” Sunderland III, a National Institute of Health (NIH) senior researcher on Alzheimer’s disease, pleads guilty to a federal charge that he committed a criminal conflict of interest. The charges stem from Sunderland’s contract with the pharmaceutical firm Pfizer as a paid consultant for work that overlapped his duties as a public servant. Sunderland is the first official in 14 years to be prosecuted for conflict of interest at NIH, an agency rocked in recent years by revelations of widespread financial ties to the drug industry. According to the original court filing, in early 1998, “Sunderland initiated negotiations with Pfizer, the pharmaceutical giant, to be paid as a consultant for his work on the same project” that he headed for NIH, a research project into Alzheimer’s disease. In June 2006, Sunderland was revealed to have engaged in a secret contract with Pfizer to supply thousands of samples of spinal fluid collected from Alzheimer’s patients at taxpayer expense and slated to be used in NIH research. Sunderland turned those samples over to Pfizer, which in turn used them to refine and market its drug Aricept, a leading prescription drug for treating the disease (see June 14, 2006). According to the original charging document filed with the court, in 1998 Sunderland approached Pfizer with a proposal that he be paid $25,000 a year for “consulting” with the firm, plus $2,500 every time he attended a one-day meeting with company representatives. Pfizer agreed. Later that same year, Sunderland set up another deal with Pfizer to be paid another $25,000 a year, according to prosecutors. The House Energy and Commerce Committee received little cooperation from NIH—Sunderland himself invoked his Fifth Amendment right against self-incrimination when called to testify before the committee in June 2006—but subpoeaned 21 drug manufacturers known to have paid NIH researchers. Sunderland’s history of payments from Pfizer, which he did not reveal to the NIH as required by law, were some of those discovered. After that information was revealed in 2004, NIH director Elias Zerhouni requested that the inspector general of the Department of Health and Human Services investigate the matter. Government researchers found that 44 researchers, including Sunderland, had off-the-books relationships with drug and biotech companies; many of those researchers were reprimanded and/or took early retirement. At the time of Sunderland’s contracts with Pfizer, NIH restrictions against public-private collaborations were far more lax than they are today. [Associated Press, 12/4/2006; Associated Press, 12/5/2006; Los Angeles Times, 12/5/2006; Washington Post, 12/5/2006]
'Public Trust Has Been Violated' - Congressman John Dingell (D-MI) asks, “Will a criminal conviction for conflict of interest be enough to get someone fired from NIH?” Bart Stupak (D-MI) adds, “If the National Institutes of Health and Commissioned Corps fail to discipline Dr. Sunderland, even after criminal charges have been brought, we can only conclude that no one is being held accountable, the system is broken, and the public trust has been violated.” [Associated Press, 12/5/2006; Los Angeles Times, 12/5/2006] Committee member Tammy Baldwin (D-WI) says: “I found this story incredibly distressing because it is so important that people have confidence in the NIH. It is a pretty big move for people to donate human tissue to further scientific discovery. People have to have confidence that that decision… is treated with the utmost respect.” [Washington Post, 12/5/2006]
Guilty Plea Avoids Jail Time - Sunderland pleads guilty to the charge under a plea agreement in which he admits to taking some $285,000 in “unauthorized” consulting fees from Pfizer as well as $15,000 in travel expense payments between 1998 and 2003. During the same period, he provided Pfizer with spinal-tap samples collected from hundreds of patients as part of a research collaboration approved by the NIH. He agrees to pay the government $300,000, perform 400 hours of community service, and serve two years’ probation. Sunderland faced up to a year in prison and a $100,000 fine, but avoided those penalties through his plea agreement. After the hearing, US Attorney Rod Rosenstein tells reporters that Sunderland’s actions constitute a breach of the public trust. [Los Angeles Times, 12/5/2006; Washington Post, 12/5/2006] According to NIH spokesman Don Ralbovsky, Sunderland remains an employee, working as a “special assistant and senior adviser” in a division that gives out grants; Rabolvsky refuses to comment on whether Sunderland faces termination procedures. The branch of NIH that Sunderland once headed, the Geriatric Psychiatry Branch, no longer exists, according to Ralbovsky. [Washington Post, 12/5/2006] One media report says Sunderland is planning to retire. [Associated Press, 12/4/2006] Sunderland will later become a doctor and director of the Alzheimer Research Center at the Albert Einstein College of Medicine in New York. [Lundbeck Institute, 12/11/2008]
Pfizer Denies Wrongdoing - For its part, Pfizer maintains that it broke no laws and breached no ethics, saying in a statement: “We believe our actions complied with applicable laws and ethical standards. We are not aware of any allegation that we violated any law or regulation.” [Los Angeles Times, 12/5/2006; Washington Post, 12/5/2006; Los Angeles Times, 12/11/2006]

Entity Tags: Pfizer, Pearson (“Trey”) Sunderland III, Rod Rosenstein, John Dingell, Bart Stupak, Don Ralbovsky, Elias Zerhouni, United States National Institutes of Health, Tammy Baldwin

Timeline Tags: US Health Care

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