Health Care in America - Illegal "Off-Label" Conspirators

The Broken American Health Care System

Big Pharma Promotes Illegal “Off-Label” Drug Uses

When Drug Makers’ Profits Outweigh Penalties

By David Evans

Washington Post

Originally Published in Bloomberg News

Sunday, March 21, 2010; G01

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/19/AR2010031905578.html

On the morning of Sept. 2, 2009, another Pfizer unit, Pharmacia agreed to plead guilty to the same crime. This time, Pfizer executives had been instructing more than 100 salespeople to promote Bextra — a drug approved only for the relief of arthritis and menstrual discomfort — for treatment of acute pain of all kinds.

For this new felony, Pfizer paid the largest criminal fine in U.S. history: $1.19 billion. On the same day, it paid $1 billion to settle civil cases involving the off-label promotion of Bextra and three other drugs with the United States and 49 states.

“At the very same time Pfizer was in our office negotiating and resolving the allegations of criminal conduct in 2004, Pfizer was itself in its other operations violating those very same laws,” Loucks, 54, says. “They’ve repeatedly marketed drugs for things they knew they couldn’t demonstrate efficacy for. That’s clearly criminal.”    

The penalties Pfizer paid for promoting Bextra off-label were the latest chapter in the drug’s benighted history. The FDA found Bextra to be so dangerous that Pfizer took it off the market for all uses in 2005.

Across the United States, pharmaceutical companies have pleaded guilty to criminal charges or paid penalties in civil cases when the Justice Department finds that they deceptively marketed drugs for unapproved uses, putting millions of people at risk of chest infections, heart attacks, suicidal impulses or death.

It used to be legal for companies to promote drugs in the United States for any use. Congress banned the practice in 1962, requiring pharmaceutical companies to first prove their drugs were safe and effective for specific uses.

If the law is clear, why do drug companies keep breaking it? The answer lies in economics. Pharmaceutical companies spend about $1 billion to develop and test a new drug. To recoup their investment, the companies want doctors to prescribe their drugs as widely as possible.

Since May 2004, Pfizer, Eli Lilly, Bristol-Myers Squibb and four other drug companies have paid a total of $7 billion in fines and penalties. Six of the companies admitted in court that they marketed medicines for unapproved uses. In September 2007, New York-based Bristol-Myers paid $515 million — without admitting or denying wrongdoing — to federal and state governments in a civil lawsuit brought by the Justice Department. The six other companies pleaded guilty in criminal cases.

 In January 2009, Indianapolis-based Lilly, the largest U.S. psychiatric drugmaker, pleaded guilty and paid $1.42 billion in fines and penalties to settle charges that it had for at least four years illegally marketed Zyprexa, a drug approved for the treatment of schizophrenia, as a remedy for dementia in elderly patients.

In five company-sponsored clinical trials, 31 people out of 1,184 participants died after taking the drug for dementia — twice the death rate for those taking a placebo, according to an article in the Journal of the American Medical Association.

“Marketing departments of many drug companies don’t respect any boundaries of professionalism or the law,” says Jerry Avorn, a professor at Harvard Medical School. “The Pfizer and Lilly cases involved the illegal promotion of drugs that have been shown to cause substantial harm and death to patients.”

The widespread off-label promotion of drugs is yet another manifestation of a health-care system that has become dysfunctional.

“It’s an unbearable cost to a system that’s going broke,” Avorn says. “We can’t even afford to pay for effective, safe therapies.”

About 15 percent of all U.S. drug sales are for unapproved uses without adequate evidence the medicines work, according to a study by Randall Stafford, a medical professor at Stanford University.

 As large as the penalties are for drug companies caught breaking the off-label law, the fines are tiny compared with the firms’ annual revenue.

The $2.3 billion in fines and penalties Pfizer paid for marketing Bextra and three other drugs cited in the Sept. 2 plea agreement for off-label uses amount to just 14 percent of its $16.8 billion in revenue from selling those medicines from 2001 to 2008.

The total of $2.75 billion Pfizer has paid in off-label penalties since 2004 is a little more than 1 percent of the company’s revenue of $245 billion from 2004 to 2008.

Lilly already had a criminal conviction for misbranding a drug when it broke the law again in promoting schizophrenia drug Zyprexa for off-label uses beginning in 1999. The medication provided Lilly with $36 billion in revenue from 2000 to 2008. That’s more than 25 times as much as the total penalties Lilly paid in January.

Companies regard the risk of multimillion-dollar penalties as just another cost of doing business, says Lon Schneider, a professor at the University of Southern California’s Keck School of Medicine in Los Angeles. In 2006, he led a study for the National Institute of Mental Health of off-label use of drugs, including Zyprexa.

“There’s an unwritten business plan,” he says. “They’re drivers that knowingly speed. If stopped, they pay the fine, and then they do it again.”

Paying the doctors

In pushing off-label use of drugs, companies find ready and willing partners in physicians. Under the fragmented system of U.S. medical regulation, it’s legal for doctors to prescribe FDA-approved drugs for any use. The FDA has no authority over doctors, only over drug companies, regarding off-label practices. It’s up to the states to oversee physicians.

“I think the physician community has to take some ownership responsibility and do their own due diligence beyond the sales and marketing person,” says Boston’s former U.S. Attorney Michael Sullivan.

Doctors generally don’t tell people they’re prescribing drugs pitched to them by pharmaceutical salespeople for unapproved treatments, says Peter Lurie, former deputy medical director of Public Citizen, a Washington-based public interest group. Most doctors don’t keep track of FDA-approved uses of drugs, he says.

“The great majority of doctors have no idea; they don’t even understand the distinction between on- and off-labeling,” he says.

Pfizer’s marketing program offered doctors up to $1,000 a day to allow a Pfizer salesperson to spend time with the physician and his patients, according to a whistle-blower lawsuit filed by John Kopchinski, who worked as a salesman at Pfizer from 1992 to 2003.

“By ‘pairing up’ with a physician, the sales representative was able to promote over a period of many hours, without the usual problems of gaining access to prescribing physicians,” Kopchinski says. “In essence, this amounted to Pfizer buying access to physicians.”

Pfizer spokesman Chris Loder says the company stopped what it calls “mentorships” in 2005. He says Pfizer paid doctors $250 a visit. The goal was clear: Get doctors to prescribe a new drug as widely as possible.

Pfizer’s Neurontin is a case in point. The FDA approved the drug as a supplemental medication to treat epilepsy in 1993. Pfizer took in $2.27 billion from sales of Neurontin in 2002. A full 94 percent — $2.12 billion — of that revenue came from off-label use, according to the prosecutors’ 2004 Pfizer sentencing memo.

Since 2004, companies that are now Pfizer divisions have pleaded guilty to off-label marketing of two drugs. Pfizer continued off-label promotions for these medications after buying the firms, according to documents.

Pfizer first stepped into an off-label scheme in 1999, when it offered to buy Warner-Lambert, based in New Jersey. Prosecutors charged that Warner-Lambert marketed Neurontin off-label between 1995 and 1999.

Warner-Lambert admitted doing so for one year in a May 2004 guilty plea for which Pfizer paid $430 million in fines and penalties.

When the FDA approved Neurontin in 1993 to be used only along with other epilepsy drugs, the agency wrote that as a side effect, the drug can induce depression and suicidal thoughts in patients.
The whistle-blower

Much of what prosecutors learned about Warner-Lambert’s marketing of Neurontin comes from a former employee, David Franklin, who holds a Ph.D. in microbiology.

Franklin, 48, whose title at Warner-Lambert was medical liaison, says his job involved more salesmanship than science. He told doctors that Neurontin was the best drug for a dozen off-label uses, including pain relief, bipolar disease and depression.

“Technically, I had responsibility for answering physician questions about all of Parke-Davis’s drugs,” Franklin says. “In practice, my real job was to promote Neurontin for off-label indications heavily — to the exclusion of just about everything else.”

Franklin says he knew such uses of the drug had no scientific support for effectiveness and safety.

 “I was actually undermining their ability to fulfill the Hippocratic oath,” Franklin says, referring to a physician’s pledge to “First, do no harm.”

After working for Warner-Lambert for three months, Franklin quit and filed a whistle-blower lawsuit on behalf of taxpayers to recover money the government paid for illegally promoted drugs. He stood to collect as much as 30 percent of any settlement the company made with the government.

Franklin had to wait four years — until 2000 — before the Justice Department began a criminal investigation. In November 1999, Pfizer made its public offer to buy Warner-Lambert. In January 2000, a federal grand jury in Boston issued subpoenas to Warner-Lambert employees to testify about the marketing of Neurontin.

That March, Warner-Lambert’s annual report disclosed that prosecutors were building a criminal case. Undeterred, Pfizer bought Warner-Lambert in June for $87 billion — the third-largest merger in U.S. history.

More sales than Viagra

A year after the acquisition, the FDA discovered that Neurontin was still being marketed off-label. In a June, 2001 letter to the company, the agency wrote that Pfizer’s promotion of the drug “is misleading and in violation of the Federal Food, Drug and Cosmetics Act.”

Pfizer marketed Neurontin off-label after receiving that letter, agency records show. For 2001, Pfizer reported revenue of $1.75 billion from Neurontin sales, making it the company’s fourth-largest-selling drug that year, ahead of impotence pill Viagra, which Neurontin topped for four years.

As Neurontin sales soared to $2.27 billion in 2002, the FDA found that Pfizer was improperly claiming that the drug was useful for a broader range of brain disorders than scientific evidence had established.

The agency sent a letter dated July 1, 2002, that said the company’s marketing practices were in violation of FDA rules. It asked Pfizer to stop using misleading promotions. Pfizer reported $2.7 billion in revenue from Neurontin in 2003. Overall, the drug has provided Pfizer with $12 billion in revenue.

Pfizer spokesman Chris Loder says, “Regarding the 2001 and 2002 FDA letters, we do not believe that they were suggestive of any continuing off-label promotion.”

For blowing the whistle on his employer, Franklin collected $24.6 million under the False Claims Act.

Prosecutors Loucks and Sullivan got involved in the case after Franklin filed his suit, relying on information from Franklin and their own investigation. Before 2004, prosecutions for off-label marketing were rare.

“Until a couple of these cases became public, companies were probably saying, ‘Everybody does it this way,’ ” Sullivan says.

Loucks had a track record in off-label prosecutions. In 1994, he negotiated a $61 million settlement with C.R. Bard of New Jersey, which pleaded guilty to promoting off-label use of a heart catheter that led to patient deaths.

The off-label campaign

In the January 2004 settlement negotiations with Loucks, Sullivan and two other prosecutors, Pfizer’s lawyers assured the U.S. Attorney’s Office that the company wouldn’t market drugs off-label.

“They asserted that the company understood the rules and had taken steps to assure corporate compliance with the law,” Loucks says. “We remember those promises.”

What Pfizer’s lawyers didn’t tell the prosecutors was that Pfizer was at that moment running an off-label marketing promotion using more than 100 salespeople who were pitching Bextra, according to a Pfizer sales manager who pleaded guilty to misbranding a drug in March 2009.

Pharmacia; Upjohn developed Bextra, which was approved by the FDA in 2001 for only the treatment of arthritis and menstrual discomfort.

Pfizer had by then crafted a joint marketing agreement to sell the drug. In November 2001, Mary Holloway, a Pfizer Northeast regional manager, began illegally training and directing her sales team to market Bextra for the relief of acute pain, Holloway admitted in the plea.

On Dec. 4, 2001, Pfizer executives sent Holloway a copy of a nonpublic FDA letter to the company. The agency had denied Pfizer’s application to market Bextra for acute pain. Clinical trials had shown Bextra could cause heart damage and death.

Pfizer bought Pharmacia from Upjohn in April 2003. From 2001 through 2003, Pharmacia operated first as an independent company and then as a unit of Pfizer, paid doctors more than $5 million in cash to lure them to resorts, where salespeople illegally pitched off-label uses for Bextra, it was admitted.

In her guilty plea, Holloway said her team had solicited hospitals to create protocols to buy Bextra for the unapproved purpose of acute pain relief. Her representatives didn’t mention the increased risk of heart attacks in their marketing.

They told doctors that side effects were no worse than those of a sugar pill, Holloway said.

In 2003, Holloway reported her unit’s off-label promotions of Bextra up the corporate ladder at Pfizer, according to a presentencing memo to the judge written by Robert Ullmann, Holloway’s attorney. Top managers didn’t attempt to halt the illegal conduct, the memo said.

By late 2004, Bextra reached blockbuster status, with annual sales of $1.29 billion. Holloway promoted Bextra until the FDA asked Pfizer in April 2005 to pull it from the market for all uses.

The agency concluded that the drug increased the risk of heart attacks, chest infections and strokes in cardiac surgery patients. In June 2009, Holloway, 47, was sentenced to two years on probation and fined $75,000. She didn’t return phone calls seeking comment.

‘We regret . . . ‘

By 2007, the criminal and civil cases against Pfizer, its employees and its subsidiaries had begun to mount. The tally of drugs cited by federal prosecutors for off-label promotion reached six by 2009. In April 2007, Pfizer pleaded guilty to a felony charge of offering a $12 million kickback to a pharmacy benefit manager. Pfizer paid a criminal fine of $19.7 million. In September 2009, Pfizer agreed to pay $2.2 billion in fines and penalties. Pfizer pleaded guilty to a felony charge of misbranding Bextra with the intent to defraud. After the settlement, Pfizer general counsel Amy Schulman said the company had learned its lesson.

“We regret certain actions we’ve taken in the past,” she said. “Corporate integrity is an absolute priority for Pfizer.”
 
One reason drug companies keep breaking the law may be because prosecutors and judges have been unwilling to use the ultimate sanction — a felony conviction that would exclude a company from selling its drugs for reimbursement by state health programs and federal Medicare.

At Pfizer’s Pharmacia sentencing in October, U.S. District Court Judge Douglas Woodlock said companies don’t appear to take the law seriously. “It has become something of a cost of doing business for some of these corporations, to shed their skin like certain animals and leave the skin and move on,” he said.

As prosecutors continue to uncover patterns of deceit in off-label marketing, millions of patients across the nation remain in the dark. Doctors often choose the medications based on dishonest marketing by drug company salesmen.

Loucks says that putting an end to the criminal off-label schemes will be difficult. As drugmakers repeatedly plead guilty, they’ve shown they’re willing to pay hundreds of millions of dollars in fines as a cost of generating billions in revenue.

The best hope, Loucks says, is that drug companies actually honor the promises they keep making — and keep breaking — to obey the law of the land.

As much as $100 million for health-care fraud enforcement is tied up in the stalled reform legislation, according to Loucks.

“It will be increasingly hard for the threat of exclusion to seem credible and thus serve as a deterrent to bad corporate behavior,” he says, “unless Congress supports health-care fraud prosecutions with more money.”

A version of this story originally appeared in Bloomberg Markets Magazine. It was awarded a 2010 Society of American Business Editors and Writers award for enterprise reporting and general excellence.
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Health Care in America - Obama and Big Pharma - Strange Bedfellows

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The Broken American Health Care System - CPT Reprint

When he ran for office Obama pledged to get control of health care costs and the first thing he did was have his then Chief of Staff Rahm Emanuel negotiate a multi billion dollar deal with big pharmaceutical companies to get their backing for his Obamacare health program.

Details of this deal have never been made public but he did get the support and money from big pharma to lobby and pass his health care program.  As profits continue to climb and costs continue to soar for prescription drugs in America let us look at how they have fared in selling their drugs under Obamacare.

Would you like to know what contributions you are making to drug companies in America? Here are the top 15 drug sales of prescription drugs for 2010 as reported by Bloomberg News.

As you will note, the drug is first, what it treats next, the annual sales in BILLIONS of dollars, and the percentage change over the previous year.  This does not include sales for livestock, fish and poultry use which can represent up to 70% of total antibody drug sales for big pharma, tens of billions more in revenues.

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Lipitor Topped Worldwide Drug Sales in 2010; Crestor Gains Most

1. Lipitor - High cholesterol - Pfizer - $10.7 - -6%

2. Plavix - Blood clot prevention - Bristol Myers - $9.43 - -4%

3. Remicade - Rheumatoid arthritis - J&J Merck & Co. - $7.99 - N/A

4. Advair - Asthma - GlaxoSmithKline - $7.94 - 2%

5. Enbrel - Rheumatoid arthritis - Amgen/Pfizer - $7.23 - N/A

6. Abilify- -Depression Bipolar Schizophrenia - Otsuka/Bristol-Myers - $6.78 - N/A

7. Humira - Rheumatoid arthritis - Abbott - $6.55 - 19%

8. Avastin - Cancer - Roche -  $6.22 - 8%

9. Rituxan - Lymphoma Leukemia - Roche/Biogen Idec - $6.11 - 9%

10. Diovan - High blood pressure - Novartis - $6.05 - 1%

11. Crestor - High cholesterol - AstraZeneca - $5.69 - 26%

12. Seroquel - Depression Bipolar Schizophrenia - AstraZeneca - $5.3 - 9%

13. Herceptin - Breast cancer - Roche - $5.22 - 7%

14. Zyprexa - Bipolar Schizophrenia - Eli Lilly - $5.03 - 2%

15. Singulair  - Asthma Allergies - Merck & Co. - $4.99 - 7%

*Estimated, Otsuka declined to provide 2010 sales. Some year-over-year sales comparisons are N/A because there isn’t comparable 2009 data.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

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Health Care in America - "Corruption at the Core of the Collapse

The Broken American Health Care System - CPT Reprint

What is the driving force behind the failure of the most expensive heath care system in the world to provide a better quality of life?  A lot of us have opinions.  So do the media, politicians and academia, but none seem to be addressing the reason behind every failure of an institution like medical care in society.

There comes a point when the institutions no longer serve the purpose they were created to address.  They evolve to a position where they believe the survival of the institution is more important than the mission of the institution.

When that happens, and inevitably it will when all good causes become their own bureaucracy, we have the seeds of corruption planted.

In America we spend about 9.9% of our disposable income on food.  Thirty years ago we spent 15% of our disposable income, meaning we spend over 5% less today on food than thirty years ago.

Now compare that to our experience with health care costs.

An article  was written June 28, 2009 by George Will titled: "Americans Will Regret Health Care Fix".  It described the cost of health care in America as follows.

The Hudson Institute's Betsy McCaughey, writing in The American Spectator, says that in 1960 the average American household spent 53 percent of its disposable income on food, housing, energy and health care. Today the portion of income consumed by those four has barely changed -- 55 percent. But the health care component has increased while the other three combined have decreased. This is partly because as societies become richer, they spend more on health care -- and symphonies, universities, museums, etc.

It is also because health care is increasingly competent. When the first baby boomers, whose aging is driving health care spending, were born in 1946, many American hospitals' principal expense was clean linen. This was long before MRIs, CAT scans and the rest of the diagnostic and therapeutic arsenal that modern medicine deploys.

In a survey released in April by NPR, the Kaiser Family Foundation and Harvard, only 6 percent of Americans said they were willing to spend more than $200 a month on health care, and the price must fall to $100 a month before a majority are willing to pay it. But according to Grace-Marie Turner of the Galen Institute, Americans already are paying an average of $400 a month.

Most Americans do not know this because the cost of their care is hidden. Only 9 percent buy health coverage individually, and $84 of every $100 spent on health care is spent by someone (an employer, insurance company or government) other than recipients of the care. Those who get insurance as untaxed compensation from employers have no occasion to compute or confront the size of that benefit. But it is part of the price their employers pay for their work.

During the past thirty years health care as a percentage of our gross domestic product has grown by more than ten times.  That does not include your taxes paid for the government expenditures on health care.  The cost now is over $2.6 trillion a year and rising, both in terms of treatment and insurance.

Make no mistake, health care, long a public service through churches, non-profit organizations, government owned facilities and other resources, has now become BIG BUSINESS.

Pharmaceutical corporations led the way into making health care a profit center, not a public service, and now virtually every aspect of our health care system is privately owned, profit centered, and financed by Wall Street.

Wall Street may be reasonably good at financing new businesses like the Internet companies and health care industry but once Wall Street takes control of the industry through controlling the financing, that company serves a new master, Wall Street profitability.

Before you get out your protest banners and decide to occupy hospitals, I mean it is fashionable to protest against anyone we think is ripping off the public, look in the mirror because you are the one embracing a system now under the control of the financial institutions.

My point is this.  Health care is more about serving Wall Street interests than the people's interest.  Of course this is America and we encourage capitalism and these health care capitalists are operating within the framework of the law.  I guess if you owned stock in enough health care companies you would be profiting from the gouging of the American public with excessive health care costs, but most of us don't own health care stocks.

Our health care industry has evolved to the point where moral and financial corruption permeate the entire system, even corrupting those in the industry who really want to help people.

The medical industry is dependent on funneling millions in campaign funds to politicians who have to vote on their funding, in bribing doctors to prescribe drugs, in bribing universities to compete on a cut throat basis for grants from private corporations for survival, and for encouraging doctors to own testing equipment which in turn has to be justified to keep.

Conflicts of interest and ethics issues dominate the health care landscape.  It has become so financially competitive that excessive and unnecessary treatment is the order of the day as a simple and nearly undetectable way to pad the revenue stream.

Why X ray a single tooth if you can X ray the whole mouth?  Why take one or two spinal X rays when you can take multiple X rays of the spine?  Why not set up follow up doctor appointments for reasons of billing for the office visits rather than transmitting test results?

If a drug company pays a doctor to prescribe their drugs, and the more drugs prescribed the more the doctor makes, don't you think more prescriptions will be written?

How can FDA employees fairly evaluate a New Drug Application (NDA) worth potentially billions of dollars in new revenue if the same employees can quit their jobs and go to work for the same drug companies for far more money?

The top five drugs in terms of sales revenue in America all make between $3 and $5 billion a year for the owners, the pharmaceutical company.  If new health research or treatment does not generate profits first and foremost, it is of little value to a profit driven health care system.

If congress or the president eliminated conflicts of interest in the industry, both in terms of the relationship between government workers and the industry and between the industry and practitioners, it would be a great start to cost reduction.

The same conflict of interest exists when doctors are convinced to own expensive equipment like CAT scan and MRI machines, blood laboratories, pharmaceutical offices and others.  If Medicare or a health insurance company allows excessive CAT scans and MRI analysis for the purpose of making sure people are diagnosed and the doctors own the machines, don't you think more screens will be prescribed?

There are a thousand and one ways to get caught in a conflict in an industry that is barely regulated.  Usually there are industry watchdogs like the Securities and Exchange Commission assigned to keep an eye on the system.  However, even they are subject to the same conflicts because the SEC failed to see the housing and banking crisis coming.  More than likely they just turned their back to it.

A comprehensive and fair conflict of interest law could be proposed by the president and approved by congress and a thorough ethics law could be adopted by the medical and health care industries and that would start to unscramble the layers of conflicts and ethics violations we face today.

Unfortunately, such leadership by our politicians and health industries is nonexistent and will be as long as the industry finances the political campaigns in Washington and through the nation.  So we also need campaign financial reform, meaningful reform, to fix that inherent problem.

Fix the conflict of interest, draw up enforceable ethics laws, and clean up the campaign finance mess and it will lead directly to reduced health care costs.  Once again, nothing has been proposed by politicians to correct this mess.

Isn't it about time to REALLY start fixing things?

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Health Care Reform - When does it start? When does the hemorrhaging end?

Here in the United States we already pay far more per capita for health care than any other country in the world yet our health care system ranks far down the list in terms of quality of care.  Doesn't that seem odd to you?

For the past six years our political system has ground to a halt because of the partisan bickering between political parties over Obamacare.

And the many candidates running for the House and Senate in this year's midterm elections are all over the place in terms of whether they support Obamacare, want to fix Obamacare or want to dump Obamacare.

Obamacare is really called the Affordable Care Act and there is nothing affordable about it.  In terms of the health care industry, the cost of nothing has gone down but the premiums, profits, bonuses and kickbacks have sure gone up.

If we were really interested in hearing the truth the story would be a whole lot different. You see, Obamacare did nothing to fix the health care system, it only extended an already broken system to the millions of Americans who are uninsured.

The truth is far more brutal than worrying about the consequences of Obamacare.  The truth consists of the following:

Nothing is being done in Washington to improve the quality of health care service.

Nothing is being done in Washington to reduce the criminally high cost of health care.

Nothing is being done in Washington to stop the unnecessary and excessive amount of patient testing to determine the cause of health problems, many of which are never confirmed.

Nothing is being done in Washington to stop the millions of dollars in kickbacks to doctors for prescribing their drugs for patient treatment.

Nothing is being done in Washington to stop the corrupt influence of hundreds of millions of dollars being spent by the current health care system to legally bribe our politicians through campaign contributions.

Nothing is being done in Washington to stop the insurance companies from denying coverage for many types of health care treatment that could drastically lower the cost through alternative health techniques.

Nothing is being done in Washington to stop the FDA, our federal regulatory agency, from favoring applications for New Drug Approval from super rich pharmaceutical companies over a host of low cost and time proven techniques to improve health that are being kept off the American market.

Nothing is being done to stop the runaway cost of court litigation relating to medical malpractice and class action health cases.

In the meantime billions of dollars are being wasted every year paying for the nonsense we call health care.  If we need more proof of the incompetence of our health care providers and corrupt nature of our health care system just look at the Veterans Administration scandal that is just beginning to unfold.

The Obama Administration claims to have done more to reform the health care system than any president since George Washington (that is a joke), at least it wants to be given such credit, yet for six long years the very people Obama sent to war have been cheated, lied to, ignored and killed by the very same saviors of health care, the Obama administration.

What is the logic in that?  We can  reduce the cost of health care by killing off those who were sent to risk their lives fighting for our country?  America needs to wake up.  Our federal government, all of it, is under the control of the White House, not just the parts that seem to work.

If our federal government knew how to provide better health care then why did thousands of veterans get cheated for the past six years.  Thanks in large part to the health care and related industries Obama spent over $2 billion to get elected two times.

It seems to me the only health care insurance that works in America was the investment by the health care providers, big pharmaceutical corporations, Wall Street, big banks, the insurance industry, the trial lawyers and financial institutions of $2 billion in the Obama campaign because they are the only ones financially benefiting from the health care fraud and abuse sanctioned by the Obama Administration and Congress.

People have got to wake up, demand more from their elected officials, throw out those who protect the status quo and encourage those with no strings attached to find ways to make it work.  In short, people deserve a return on their investment in so called democracy and holding all those responsible for our broken system accountable is the first step.

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Health Care in America - Illegal "Off-Label" Conspirators - 1st Published March 21, 2010

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The Broken American Health Care System

Big Pharma Promotes Illegal “Off-Label” Drug Uses

When Drug Makers’ Profits Outweigh Penalties

By David Evans

Washington Post

Originally Published in Bloomberg News

Sunday, March 21, 2010; 

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/19/AR2010031905578.html

On the morning of Sept. 2, 2009, another Pfizer unit, Pharmacia agreed to plead guilty to the same crime. This time, Pfizer executives had been instructing more than 100 salespeople to promote Bextra — a drug approved only for the relief of arthritis and menstrual discomfort — for treatment of acute pain of all kinds.

For this new felony, Pfizer paid the largest criminal fine in U.S. history: $1.19 billion. On the same day, it paid $1 billion to settle civil cases involving the off-label promotion of Bextra and three other drugs with the United States and 49 states.


“At the very same time Pfizer was in our office negotiating and resolving the allegations of criminal conduct in 2004, Pfizer was itself in its other operations violating those very same laws,” Loucks, 54, says. “They’ve repeatedly marketed drugs for things they knew they couldn’t demonstrate efficacy for. That’s clearly criminal.”


The penalties Pfizer paid for promoting Bextra off-label were the latest chapter in the drug’s benighted history. The FDA found Bextra to be so dangerous that Pfizer took it off the market for all uses in 2005.


Across the United States, pharmaceutical companies have pleaded guilty to criminal charges or paid penalties in civil cases when the Justice Department finds that they deceptively marketed drugs for unapproved uses, putting millions of people at risk of chest infections, heart attacks, suicidal impulses or death.


It used to be legal for companies to promote drugs in the United States for any use. Congress banned the practice in 1962, requiring pharmaceutical companies to first prove their drugs were safe and effective for specific uses.


If the law is clear, why do drug companies keep breaking it? The answer lies in economics. Pharmaceutical companies spend about $1 billion to develop and test a new drug. To recoup their investment, the companies want doctors to prescribe their drugs as widely as possible.


Since May 2004, Pfizer, Eli Lilly, Bristol-Myers Squibb and four other drug companies have paid a total of $7 billion in fines and penalties. Six of the companies admitted in court that they marketed medicines for unapproved uses. In September 2007, New York-based Bristol-Myers paid $515 million — without admitting or denying wrongdoing — to federal and state governments in a civil lawsuit brought by the Justice Department. The six other companies pleaded guilty in criminal cases.

In January 2009, Indianapolis-based Lilly, the largest U.S. psychiatric drugmaker, pleaded guilty and paid $1.42 billion in fines and penalties to settle charges that it had for at least four years illegally marketed Zyprexa, a drug approved for the treatment of schizophrenia, as a remedy for dementia in elderly patients.


In five company-sponsored clinical trials, 31 people out of 1,184 participants died after taking the drug for dementia — twice the death rate for those taking a placebo, according to an article in the Journal of the American Medical Association.


“Marketing departments of many drug companies don’t respect any boundaries of professionalism or the law,” says Jerry Avorn, a professor at Harvard Medical School. “The Pfizer and Lilly cases involved the illegal promotion of drugs that have been shown to cause substantial harm and death to patients.”


The widespread off-label promotion of drugs is yet another manifestation of a health-care system that has become dysfunctional.


“It’s an unbearable cost to a system that’s going broke,” Avorn says. “We can’t even afford to pay for effective, safe therapies.”


About 15 percent of all U.S. drug sales are for unapproved uses without adequate evidence the medicines work, according to a study by Randall Stafford, a medical professor at Stanford University.


As large as the penalties are for drug companies caught breaking the off-label law, the fines are tiny compared with the firms’ annual revenue.


The $2.3 billion in fines and penalties Pfizer paid for marketing Bextra and three other drugs cited in the Sept. 2 plea agreement for off-label uses amount to just 14 percent of its $16.8 billion in revenue from selling those medicines from 2001 to 2008.


The total of $2.75 billion Pfizer has paid in off-label penalties since 2004 is a little more than 1 percent of the company’s revenue of $245 billion from 2004 to 2008.


Lilly already had a criminal conviction for misbranding a drug when it broke the law again in promoting schizophrenia drug Zyprexa for off-label uses beginning in 1999. The medication provided Lilly with $36 billion in revenue from 2000 to 2008. That’s more than 25 times as much as the total penalties Lilly paid in January.


Companies regard the risk of multimillion-dollar penalties as just another cost of doing business, says Lon Schneider, a professor at the University of Southern California’s Keck School of Medicine in Los Angeles. In 2006, he led a study for the National Institute of Mental Health of off-label use of drugs, including Zyprexa.


“There’s an unwritten business plan,” he says. “They’re drivers that knowingly speed. If stopped, they pay the fine, and then they do it again.”

Paying the doctors


In pushing off-label use of drugs, companies find ready and willing partners in physicians. Under the fragmented system of U.S. medical regulation, it’s legal for doctors to prescribe FDA-approved drugs for any use. The FDA has no authority over doctors, only over drug companies, regarding off-label practices. It’s up to the states to oversee physicians.


“I think the physician community has to take some ownership responsibility and do their own due diligence beyond the sales and marketing person,” says Boston’s former U.S. Attorney Michael Sullivan.


Doctors generally don’t tell people they’re prescribing drugs pitched to them by pharmaceutical salespeople for unapproved treatments, says Peter Lurie, former deputy medical director of Public Citizen, a Washington-based public interest group. Most doctors don’t keep track of FDA-approved uses of drugs, he says.


“The great majority of doctors have no idea; they don’t even understand the distinction between on- and off-labeling,” he says.


Pfizer’s marketing program offered doctors up to $1,000 a day to allow a Pfizer salesperson to spend time with the physician and his patients, according to a whistle-blower lawsuit filed by John Kopchinski, who worked as a salesman at Pfizer from 1992 to 2003.


“By ‘pairing up’ with a physician, the sales representative was able to promote over a period of many hours, without the usual problems of gaining access to prescribing physicians,” Kopchinski says. “In essence, this amounted to Pfizer buying access to physicians.”


Pfizer spokesman Chris Loder says the company stopped what it calls “mentorships” in 2005. He says Pfizer paid doctors $250 a visit. The goal was clear: Get doctors to prescribe a new drug as widely as possible.


Pfizer’s Neurontin is a case in point. The FDA approved the drug as a supplemental medication to treat epilepsy in 1993. Pfizer took in $2.27 billion from sales of Neurontin in 2002. A full 94 percent — $2.12 billion — of that revenue came from off-label use, according to the prosecutors’ 2004 Pfizer sentencing memo.


Since 2004, companies that are now Pfizer divisions have pleaded guilty to off-label marketing of two drugs. Pfizer continued off-label promotions for these medications after buying the firms, according to documents.


Pfizer first stepped into an off-label scheme in 1999, when it offered to buy Warner-Lambert, based in New Jersey. Prosecutors charged that Warner-Lambert marketed Neurontin off-label between 1995 and 1999.


Warner-Lambert admitted doing so for one year in a May 2004 guilty plea for which Pfizer paid $430 million in fines and penalties.


When the FDA approved Neurontin in 1993 to be used only along with other epilepsy drugs, the agency wrote that as a side effect, the drug can induce depression and suicidal thoughts in patients.
The whistle-blower


Much of what prosecutors learned about Warner-Lambert’s marketing of Neurontin comes from a former employee, David Franklin, who holds a Ph.D. in microbiology.


Franklin, 48, whose title at Warner-Lambert was medical liaison, says his job involved more salesmanship than science. He told doctors that Neurontin was the best drug for a dozen off-label uses, including pain relief, bipolar disease and depression.


“Technically, I had responsibility for answering physician questions about all of Parke-Davis’s drugs,” Franklin says. “In practice, my real job was to promote Neurontin for off-label indications heavily — to the exclusion of just about everything else.”


Franklin says he knew such uses of the drug had no scientific support for effectiveness and safety.


“I was actually undermining their ability to fulfill the Hippocratic oath,” Franklin says, referring to a physician’s pledge to “First, do no harm.”


After working for Warner-Lambert for three months, Franklin quit and filed a whistle-blower lawsuit on behalf of taxpayers to recover money the government paid for illegally promoted drugs. He stood to collect as much as 30 percent of any settlement the company made with the government.


Franklin had to wait four years — until 2000 — before the Justice Department began a criminal investigation. In November 1999, Pfizer made its public offer to buy Warner-Lambert. In January 2000, a federal grand jury in Boston issued subpoenas to Warner-Lambert employees to testify about the marketing of Neurontin.


That March, Warner-Lambert’s annual report disclosed that prosecutors were building a criminal case. Undeterred, Pfizer bought Warner-Lambert in June for $87 billion — the third-largest merger in U.S. history.

More sales than Viagra


A year after the acquisition, the FDA discovered that Neurontin was still being marketed off-label. In a June, 2001 letter to the company, the agency wrote that Pfizer’s promotion of the drug “is misleading and in violation of the Federal Food, Drug and Cosmetics Act.”


Pfizer marketed Neurontin off-label after receiving that letter, agency records show. For 2001, Pfizer reported revenue of $1.75 billion from Neurontin sales, making it the company’s fourth-largest-selling drug that year, ahead of impotence pill Viagra, which Neurontin topped for four years.


As Neurontin sales soared to $2.27 billion in 2002, the FDA found that Pfizer was improperly claiming that the drug was useful for a broader range of brain disorders than scientific evidence had established.


The agency sent a letter dated July 1, 2002, that said the company’s marketing practices were in violation of FDA rules. It asked Pfizer to stop using misleading promotions. Pfizer reported $2.7 billion in revenue from Neurontin in 2003. Overall, the drug has provided Pfizer with $12 billion in revenue.


Pfizer spokesman Chris Loder says, “Regarding the 2001 and 2002 FDA letters, we do not believe that they were suggestive of any continuing off-label promotion.”


For blowing the whistle on his employer, Franklin collected $24.6 million under the False Claims Act.


Prosecutors Loucks and Sullivan got involved in the case after Franklin filed his suit, relying on information from Franklin and their own investigation. Before 2004, prosecutions for off-label marketing were rare.


“Until a couple of these cases became public, companies were probably saying, ‘Everybody does it this way,’ ” Sullivan says.


Loucks had a track record in off-label prosecutions. In 1994, he negotiated a $61 million settlement with C.R. Bard of New Jersey, which pleaded guilty to promoting off-label use of a heart catheter that led to patient deaths.

The off-label campaign


In the January 2004 settlement negotiations with Loucks, Sullivan and two other prosecutors, Pfizer’s lawyers assured the U.S. Attorney’s Office that the company wouldn’t market drugs off-label.


“They asserted that the company understood the rules and had taken steps to assure corporate compliance with the law,” Loucks says. “We remember those promises.”


What Pfizer’s lawyers didn’t tell the prosecutors was that Pfizer was at that moment running an off-label marketing promotion using more than 100 salespeople who were pitching Bextra, according to a Pfizer sales manager who pleaded guilty to misbranding a drug in March 2009.


Pharmacia; Upjohn developed Bextra, which was approved by the FDA in 2001 for only the treatment of arthritis and menstrual discomfort.


Pfizer had by then crafted a joint marketing agreement to sell the drug. In November 2001, Mary Holloway, a Pfizer Northeast regional manager, began illegally training and directing her sales team to market Bextra for the relief of acute pain, Holloway admitted in the plea.


On Dec. 4, 2001, Pfizer executives sent Holloway a copy of a nonpublic FDA letter to the company. The agency had denied Pfizer’s application to market Bextra for acute pain. Clinical trials had shown Bextra could cause heart damage and death.


Pfizer bought Pharmacia from Upjohn in April 2003. From 2001 through 2003, Pharmacia operated first as an independent company and then as a unit of Pfizer, paid doctors more than $5 million in cash to lure them to resorts, where salespeople illegally pitched off-label uses for Bextra, it was admitted.


In her guilty plea, Holloway said her team had solicited hospitals to create protocols to buy Bextra for the unapproved purpose of acute pain relief. Her representatives didn’t mention the increased risk of heart attacks in their marketing.


They told doctors that side effects were no worse than those of a sugar pill, Holloway said.


In 2003, Holloway reported her unit’s off-label promotions of Bextra up the corporate ladder at Pfizer, according to a presentencing memo to the judge written by Robert Ullmann, Holloway’s attorney. Top managers didn’t attempt to halt the illegal conduct, the memo said.


By late 2004, Bextra reached blockbuster status, with annual sales of $1.29 billion. Holloway promoted Bextra until the FDA asked Pfizer in April 2005 to pull it from the market for all uses.


The agency concluded that the drug increased the risk of heart attacks, chest infections and strokes in cardiac surgery patients. In June 2009, Holloway, 47, was sentenced to two years on probation and fined $75,000. She didn’t return phone calls seeking comment.


‘We regret . . . ‘


By 2007, the criminal and civil cases against Pfizer, its employees and its subsidiaries had begun to mount. The tally of drugs cited by federal prosecutors for off-label promotion reached six by 2009. In April 2007, Pfizer pleaded guilty to a felony charge of offering a $12 million kickback to a pharmacy benefit manager. Pfizer paid a criminal fine of $19.7 million. In September 2009, Pfizer agreed to pay $2.2 billion in fines and penalties. Pfizer pleaded guilty to a felony charge of misbranding Bextra with the intent to defraud. After the settlement, Pfizer general counsel Amy Schulman said the company had learned its lesson.

“We regret certain actions we’ve taken in the past,” she said. “Corporate integrity is an absolute priority for Pfizer.”

One reason drug companies keep breaking the law may be because prosecutors and judges have been unwilling to use the ultimate sanction — a felony conviction that would exclude a company from selling its drugs for reimbursement by state health programs and federal Medicare.


At Pfizer’s Pharmacia sentencing in October, U.S. District Court Judge Douglas Woodlock said companies don’t appear to take the law seriously. “It has become something of a cost of doing business for some of these corporations, to shed their skin like certain animals and leave the skin and move on,” he said.


As prosecutors continue to uncover patterns of deceit in off-label marketing, millions of patients across the nation remain in the dark. Doctors often choose the medications based on dishonest marketing by drug company salesmen.


Loucks says that putting an end to the criminal off-label schemes will be difficult. As drugmakers repeatedly plead guilty, they’ve shown they’re willing to pay hundreds of millions of dollars in fines as a cost of generating billions in revenue.


The best hope, Loucks says, is that drug companies actually honor the promises they keep making — and keep breaking — to obey the law of the land.


As much as $100 million for health-care fraud enforcement is tied up in the stalled reform legislation, according to Loucks.

“It will be increasingly hard for the threat of exclusion to seem credible and thus serve as a deterrent to bad corporate behavior,” he says, “unless Congress supports health-care fraud prosecutions with more money.”


A version of this story originally appeared in Bloomberg Markets Magazine. It was awarded a 2010 Society of American Business Editors and Writers award for enterprise reporting and general excellence.
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