Tuesday, September 8, 2009


You Be the Feds....

Vera Shavner has sent out an interesting post on the recent Pfizer/DOJ settlement that can be accessed at:


In essence, Vera suggests that Pfizer got off the hook in the recent settlement because they were not banned from future federal contracts, at least for a period of time, which they were threatened with in the "Corporate Integrity Agreement" regarding Neurontin.

Personally, I disagree with Vera's analysis. I will post my response to her. But what do you all think?


  1. This was my comment to Vera:

    Disagree, Vera. The Bush DOJ would _never_ have excluded Pfizer, even if they proved
    they were responsible for 9/11.

    The Obama DOJ text is a formal rescinding of the Neurontin language which would be part
    of any agreement. And the reality is that refusing to do further federal business with
    Pfizer would hurt Medicare/Medicaid/Tricor pts far more than it would hurt Pfizer. Like
    taking people off Lipitor in favor of Baycol, as happened in the "good old days."

    Pfizer makes a few genuinely necessary drugs for at least a subset of this large group of
    pts. A better tack, in my view, would have been exercising the criminal penalties more
    aggressively and sending a few senior people--who are disposable--to the clink.

  2. Pfizer’s fines aren’t even slowing them down.

    From link:

    “Pfizer's fine is the largest health care fraud settlement in U.S. Justice Department history. But that $2.3 billion total stands small compared to the $44.2 billion in pharmaceutical sales the world's largest drugmaker rang up last year.”

    People charged with crimes should be tried and if found guilty sent to jail. Until that happens, nothing is going to change.

  3. The individuals responsible for promoting off-label drugs:

    “The government said the company promoted four prescription drugs, including the pain killer Bextra, as treatments for medical conditions different from those the drugs had been approved for by federal regulators. Authorities said Pfizer's salesmen and women created phony doctor requests for medical information in order to send unsolicited information to doctors about unapproved uses and dosages.” http://finance.yahoo.com/news/Pfizer-to-pay-record-23B-apf-1176280604.html?x=0

    People like Mary Holloway:

    “An example of what specifically Pfizer has been accused of and what it had done wrong can be seen in the case against Mary Holloway, one of its regional managers, who pleaded guilty to one count of distributing a misbranded drug. She and her sale staff of about 100 sold ‘Bextra for precisely the uses that the FDA refused to approve.’ As Holloway's case shows, while doctors can prescribe medicines for off-label conditions and uses that are not approved by the FDA, the drugmakers themselves aren't allowed to promote such uses.” http://www.dailyfinance.com/2009/09/02/pfizer-settles-off-label-uses-promotion-and-kickback-charges-for/

    And others:

    “Pfizer had a sales team in Florida that called themselves ‘the Sharks’ as they promoted Bextra off-label ...

    South Florida district sales manager Matthew Lustig addressed his team as ‘the Sharks’…

    It was not the only Pfizer sales team with a cute nickname. BNET previously noted the existence of ‘the Highlanders,’ a team that sold Bextra in Brooklyn, N.Y.

    Lustig also rewarded sales reps who persuaded doctors to use Bextra off-label in surgical protocols with ‘Ace Points,’ that were worth money.” http://industry.bnet.com/pharma/10004061/pfizers-west-side-story-how-the-sharks-sold-bextra-off-label/

    And the folks at the top who made it all possible:

    “Mary Holloway, the Pfizer regional manager who was sentenced last week for her role in a rogue operation that promoted Bextra for off-label uses such as post-operative pain, had the support of her superiors, she told Massachusetts federal district court. In fact, Pfizer’s off-label Bextra promotion was widespread within the company, approved of by the company, and generally ‘part of the Pfizer culture,’ Holloway’s lawyer said.” http://industry.bnet.com/pharma/10002808/pfizer-exec-company-approved-of-off-label-bextra-promotion/

  4. Thanks for this, Eliot.

    I'm not disagreeing per se--as I wrote in my own post, I think using the clink more aggressively would have been a better option than the Feds refusing to "deal with" Pfizer for whatever period of time.

    But the example shows us that we are probably talking about many hundreds of people when you include regional managers, the sales staff, and relevant "superiors." Each one would have to be prosecuted invidually, which would probably take several years. And, of course, each would claim they were "following orders." Indeed, the essence of these kinds of scams, as with Neurontin, is that they are "systemic," to use the DOJ's word. As you quote from BNET, "In fact, Pfizer’s off-label Bextra promotion was widespread within the company, approved of by the company, and generally ‘part of the Pfizer culture,’ "

    So it tells us something about why "white collar" crime of this sort is so rarely prosecuted. And particularly if there are no identifiable victims beyond the government itself (for overcharging). That is, if you say that the illicit promotion of Bextra caused injuries and deaths, which is almost certainly the case, you would have to come up with the particular victims or corpus delecti in order to make the case.

    So the gov spends many thousands, perhaps even millions, of our tax dollars to prosecute cases that they probably would not win.

    My personal preference, therefore, would be to jail the CEO or some senior marketing folks. There are companies (I kid you not) who literally have people with the unofficial job title, "Vice President in Charge of Going to Jail." They are prepared.

    But, as noted up thread, there are precedents for jailing CEOs whether or not there is any certain evidence they were aware of the scam.

  5. CEO's and Wall Street Executives only go to jail when they rob from the rich( Ken Lay, Bernie Madoff).

  6. Two items related to the relative deterrence, and possibility, of large fines vs. criminal prosecution/jailing of individuals:



  7. Justice, I agree with your take on the precluding Pfizer from govt programs. However, if the DOJ were truly serious about this acting as a deterrent, they would make future Pfizer violations have a substantial associated penalty, not the '$1,000 a day' penalty specified in the CIA.

    Also, how about a employee hotline to a DOJ enforcement agent to report any additional violations?

  8. Good ideas, anon. On further reflection, one could also imagine a limiting boycott for some period of time. No govt contracts with Pfizer with the exception of pts with a demonstrable need for a Pfizer drug where no viable alternative is available. As I looked through the list of Pfizer products, there are very few that I thought would be in that category.

    Re: a hotline, or tipline, I wonder how many would risk it, even if anonymous. Whistleblowers using the False Claims Act are pretty much kissing their pharma industry careers good-bye--and, often enough, any industry career whatsoever. Of course, a small number will get enough of an award to set them up for life. But most won't anything but shunning and grief.

  9. I disagree.

    $2.3 billion is 2.5 weeks of sales for Pfizer and less than 30% of 1 year's profits and these things were going on for years.

    This is the cost of doing business.

    It will be written off on taxes and there will be ways found to make up as much of the income as possible, even the way international profits are set up to avoid paying taxes.

    There are other sources of fenofibrate than Pfizer and even if there weren't then as a public health issue a generic could be made or could be readily approved for importation in a matter of days. (A straight forward generic application is only a couple of very simple studies and should only take a couple of hours to for a single person to go through each one (the real problem with generic approvals is number of total applicaitons).

    Criminal penalities are needed. A regional sales manager is a low level person and upper management won't care. You need CEO's going to jail and there are too many layers of protection and there's never any documentation. I've even heard upper management say "if it isn't in writing it didn't happen".


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