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Ursus:
Bloomberg.com
Pfizer Faces Class Action in Canada Over Neurontin (Update2)

By Cary O'Reilly

 Feb. 19 (Bloomberg) -- Pfizer Inc., the world's largest drugmaker, faces a national class-action lawsuit in most of Canada over claims it failed to warn consumers about the risks of its Neurontin epilepsy drug.

The suit was certified yesterday by Justice Paul Perell of Ontario Superior Court in Toronto in every province except Quebec, according to court records. He declined to certify claims the drugmaker promoted Neurontin for unapproved uses or that it might be liable for generic versions of the medicine.

The suit alleges that use of Neurontin, a prescription anticonvulsant, causes an increased risk of suicidal behavior in patients, and that Pfizer didn't warn consumers about it. The company faces about 1,200 similar lawsuits in the U.S. Pfizer disputes any connection between suicide and Neurontin use.

"We are very pleased that Canadians who experienced suicidal behavior from using Neurontin, and their family members, will be allowed to go forward with their claims," Michael J. Peerless, an attorney with Siskinds LLP who is representing the class, said in a statement today.

Chris Loder, a spokesman for Pfizer, said the company is "disappointed" at the judge's ruling, though it welcomed his decision to strike the claims on improper marketing and generic liability.

'Widely Studied'

Perell also refused to allow a claim for punitive damages to remain a common issue, Loder said in an e-mailed statement.

"Neurontin is an important medicine that has been widely studied for more than two decades," Loder said. "There is an extensive body of science on the use of Neurontin and physicians have prescribed it to treat millions of patients safely and effectively."

Pfizer rose 26 cents to $17.99 on the New York Stock Exchange. The shares are little changed this year.

The case is Goodridge v. Pfizer Canada Inc., 06-cv- 307728CP, Ontario Superior Court of Justice (Toronto).

To contact the reporter on this story: Cary O'Reilly in Washington at caryoreilly@bloomberg.net.

Last Updated: February 19, 2010 16:21 EST


©2010 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Ursus:
Bloomberg.com
Pfizer Found Liable in Fraud Trial Over Neurontin Drug

By Bob Van Voris

March 25 (Bloomberg) -- Pfizer Inc. was found liable for violating civil racketeering law in a trial over its Neurontin epilepsy drug.

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

Last Updated: March 25, 2010 16:08 EDT


©2010 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Ursus:
Bloomberg.com
Drug Busts on the Cheap Lack Power to Deter: Michael K. Loucks

Commentary by Michael K. Loucks

March 9 (Bloomberg) -- Since 1990, drug companies have paid more than $11 billion to resolve federal criminal and civil health-care fraud investigations. Most of the money was paid in the past 10 years as a consequence of aggressive enforcement, coupled with the potential for mandatory exclusion from federal health-care programs.

This deterrent will dwindle to nothing if the funding for health-care fraud prosecutors isn't increased substantially. That's a real risk under Congress's current funding plans.

In 1997, Congress decreed that anyone convicted of a health-care fraud felony would be excluded from further participation in federally funded health-care programs. The premise was that a company or person convicted of ripping off these programs shouldn't remain a vendor.

This potential death penalty has acted as a deterrent to companies under investigation for criminal conduct involving the fleecing of Medicare and Medicaid. The possibility of debarment has forced many to come clean, plead guilty, pay significant fines and agree to substantial corporate reforms.

Last October, a federal judge ordered Pfizer Inc. to pay $2.3 billion in criminal and civil penalties and restitution following its admission that it had engaged in unapproved so- called off-label promotion of the pain medication Bextra, among other misdeeds.

This was Pfizer's second bite at the criminal apple. Five years earlier, Pfizer admitted that a company it had acquired cheated in the off-label promotion of Neurontin, an epilepsy drug.

Hard Bargaining

Nonetheless, as a part of the settlement that I helped negotiate, Pfizer wasn't excluded. This decision was the result of hard bargaining. On the government side, we had the certainty of the immediate cash payment. We had to balance that against the risk of seeking an indictment and going to trial, as well as the human cost of exclusion to those working for Pfizer who had no involvement in wrongdoing, or on those who depended on Pfizer's products. Pfizer considered its own litigation risk in reaching a conclusion to settle rather than fight.

Not excluding Pfizer was the right choice. The $1.3 billion criminal portion of the penalty was huge and is an effective deterrent, especially when coupled with a new corporate integrity program.

Of course, no human governance system will stop all cheating; the best example of this is the corporate integrity program we imposed on Pfizer for the Neurontin cheating. That didn't stop the Bextra cheating.

Personal Obligations

Mindful of that, the new program imposes significant personal obligations on business-unit managers across Pfizer's sales and marketing operations. Midlevel managers must sign periodic statements asserting lawful behavior. That won't stop all deception, but it should deter many and, in the event it doesn't, the certifications should simplify future prosecutions of individuals.

A strong investigation, coupled with the credible threat of mandatory exclusion, produced the correct result.

What does the future hold in terms of enforcement? I see two conflicting forces, one of which should trouble would-be drug-company cheaters, and one that should trouble the public.

As regards the former, political and public patience is wearing thin. Since 1990, there have been 54 civil and criminal settlements with drug companies, with 44 of those after 2000, and 17 in just the past three years. A total of $23 billion has been recovered in all health-care fraud cases since 1990.

$1 Billion

Investigations of kickbacks, off-label promotion and price cheating in the drug industry are now in their 13th year. Several companies, such as Schering-Plough Corp., Pfizer and Eli Lilly & Co., have had two or more criminal or civil bouts in federal court since 1998, with gross recoveries from each company exceeding $1 billion.

After the Pfizer settlement, several U.S. senators proposed legislation to increase jail time for individual health-care fraud offenders. This will increase political pressure to pull the exclusion trigger on one of the next major corporate criminals.

But Congress has failed to put its money where its mouth is. New laws increasing penalties on health-care cheats are useless weapons if there aren't enough soldiers to wield them. U.S. attorneys offices haven't had an increase in funding for health-care fraud since 2003. The Department of Justice's inspector general reported in November 2008 that the number of federal prosecutors spending time on health-care fraud declined nationwide from 2004 to 2007 by 20, a decrease of 12 percent.

Inadequate Support

The stalled health-care reform legislation included $100 million for all federal agencies involved in health-care fraud enforcement. That sounds like a lot, but the increase for the prosecutors would have amounted to just $8.9 million, nowhere near enough to get staffing back to where it was six years ago. Nor do the proposed budgets for the Justice Department and Human Services provide enough money for health-care fraud prosecutors and agents.

We had more than a dozen agents and federal prosecutors working in several different offices for five years on the Pfizer matter; had the case gone to trial, that team would have spent another five years on the case. It will be increasingly hard for the threat of exclusion to remain credible and thus serve as a deterrent to bad corporate behavior unless Congress supports health-care fraud prosecutions with more money.

(Michael Loucks, co-author of "Prosecuting and Defending Health Care Fraud Cases," supervised health-care prosecutions in the Massachusetts U.S. attorney's office for 17 years. The opinions expressed are his own.)

Click on "Send Comment" in the sidebar display to send a letter to the editor.

To contact the writer of this column: loucks_michael@hotmail.com

Last Updated: March 8, 2010 21:00 EST


©2010 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Ursus:
Bloomberg.com
Pfizer Told to Pay $142.1 Million for Neurontin Marketing Fraud

By Bob Van Voris and Janelle Lawrence

 March 26 (Bloomberg) -- Pfizer Inc. violated U.S. racketeering law in the marketing of its epilepsy drug Neurontin and should pay $142.1 million in damages, a jury decided.

Kaiser Foundation Health Plan Inc. and Kaiser Foundation Hospitals claimed in a monthlong trial in federal court in Boston that Pfizer illegally promoted Neurontin for unapproved uses. The insurer said it was misled into believing migraines and bipolar disorder were among the conditions that could be treated effectively with Neurontin, approved in 1993 by the U.S. Food and Drug Administration for epilepsy.

"The jury found Pfizer engaged in a racketeering conspiracy over a 10-year period," Tom Sobol, a lawyer for Kaiser, said after yesterday's verdict. "That bodes well for future cases."

U.S. District Judge Patti Saris, who presided over the trial, is overseeing federal lawsuits from throughout the U.S. targeting Pfizer with injury claims and allegations of fraudulent sales and marketing of the drug. In a ruling last year, Saris said that fraud findings against Pfizer in the case decided yesterday could be binding against it in future trials.

Oakland, California-based Kaiser, the first insurer to try a Neurontin case against the world's biggest drugmaker, claimed it was forced to pay $90 million more than it should have for Neurontin.

The jury, which deliberated for two days, found that New York-based Pfizer violated the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, and California's Unfair Competition Law. Under RICO, the amount of actual damages found by the jury, $47.36 million, will be tripled.

'A Triumph'

"This is a triumph for evidence-based medicine over marketing-based medicine," said Thomas Greene, a Kaiser lawyer.

Pfizer made no offer to settle the case before trial, Greene said.

"We are disappointed in this verdict," said Chris Loder, a Pfizer spokesman. Pfizer will file post-trial motions challenging the verdict and plans to appeal, he said.

Pfizer fell 22 cents to $17.39 yesterday in New York Stock Exchange composite trading.

During the trial, Pfizer argued that Kaiser doctors continued to prescribe the drug even after the health insurer sued Pfizer in 2005. The insurer's Web site also still lists Neurontin as a drug for neuropathic pain, Pfizer lawyers said in closing argument.

"We took that into consideration," said Danielle Hurley, a 22-year-old artist who sat on the jury. "Kaiser was proactive, but could have been more proactive."

Shocked by Evidence

Hurley said she was shocked by evidence that Pfizer knowingly marketed Neurontin for off-label uses without proof that it was effective.

All of the five jurors interviewed after the verdict said they agreed that Pfizer had demonstrated "a pattern of fraud" in marketing the drug.

"It was clearly a snow job," said juror Paul Anderson, a technical writer.

"The message, if there was a message, is that they acted in a fraudulent manner," said Hank Pierotti, foreman of the eight-person jury. "If you're fraudulent, you deserve to be punished."

Kaiser claimed Neurontin was wrongly prescribed for off-label uses, including treatment of neuropathic pain, and in dosages larger than the maximum approved by the FDA.

Jurors yesterday found that Pfizer violated racketeering laws with respect to four of the five off-label uses in question.

Company's Studies

The company's own studies showed that Neurontin was no more effective than a placebo in treating those conditions, though Pfizer never told doctors or patients about the findings, Kaiser said.

Several jurors said they were strongly influenced by the testimony of former FDA Commissioner David Kessler and Kay Dickerson, a Johns Hopkins epidemiologist whose article casting doubt on clinical studies of Neurontin appeared in the New England Journal of Medicine last year. Both testified on behalf of Kaiser.

"Dr. Dickerson was the lynchpin," jury foreman Pierotti said.

Pfizer argued that Kaiser didn't present testimony from any doctors claiming they wouldn't have prescribed the medication if they had known better, Pfizer's lawyer argued.

"No doctor wants to admit they were defrauded," Pierotti said.

Warner-Lambert

Warner-Lambert Co. developed and marketed Neurontin for several years before Pfizer acquired the company in 2000. Four years later, Warner-Lambert pleaded guilty and agreed to pay $430 million to resolve off-label marketing allegations by the U.S. Justice Department.

Saris permitted jurors to hear evidence of the settlement during the trial.

"That helped a lot," said juror Anderson.

The Justice Department claimed in a 2004 sentencing memorandum that Warner-Lambert's marketing increased off-label sales from 15 percent of all Neurontin prescriptions in 1994, its first year on the market, to 94 percent, or $2.12 billion, of Pfizer's Neurontin sales in 2002.

In 2002, responding to press reports of Pfizer's allegedly fraudulent Neurontin marketing, Kaiser began an information campaign that led to a 34 percent drop in Neurontin prescriptions to its members, according to Saris.

Product Liability Suits

Among the cases in Saris's court are product-liability suits claiming the drug is linked to an increased risk of suicide. The first trial in one of those, over the suicide death of a 39-year-old woman, ended when her family dropped the case. A second trial, involving the suicide of a 57-year-old Massachusetts man, is scheduled to begin next week in Boston.

In January, Saris dismissed fraud claims by Aetna Inc. and Guardian Life Insurance Co. against Pfizer. Unlike those companies, Kaiser showed it had considered Pfizer's allegedly false claims and data in deciding to pay for off-label Neurontin prescriptions, Saris ruled before the trial.

The case is In re Neurontin Marketing, Sales Practices and Products Liability Litigation, MDL 1629, U.S. District Court, District of Massachusetts (Boston).

To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net.

Last Updated: March 26, 2010 00:01 EDT


©2010 BLOOMBERG L.P. ALL RIGHTS RESERVED.

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