Fwd: Is the Pfizer-DOJ settlement-- a gift or punishment?

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ALLIANCE FOR HUMAN RESEARCH PROTECTION A Catalyst for Public Debate: Promoting Openness, Full Disclosure, andAccountability http://www.ahrp.org FYIMost of the media has focused on the $2.3 billion Department of Justicesettlement with Pfizer for criminal marketing practices without noticing afar greater financial give-away by the government to Pfizer in a sweetheartsettlement.In 2004, Pfizer pled guilty to criminal off-label marketing of Neurontin.The company settled with the Department of Justice for $430 million ANDaccepted a Certificate of Integrity Agreement (CIA) with the Office of theInspector General of the US Department of Health and Human Services. The CIAincluded a potent financial penalty if Pfizer violated the agreement whichrequired compliance with ALL federal healthcare laws, namely; Pfizer wouldrisk exclusion from federal healthcare programs--i.e, loss of revenues fromMedicare, Medicaid, VA. See:http://oig.hhs.gov/fraud/cia/agreements/pfizer_5_11_2004.pdfThe Certificate of Integrity Agreement (2004) stipulated (among otherthings) that Pfizer would institute a compliance procedure with writtenannual reports, to ensure that Pfizer is in compliance with all FDA andfederal healthcare requirement programs. The CIA specified the circumstancesleading to Exclusion from participation if federal healthcare programs andthe scope of the exclusion: "Exclusion shall have national effect and shall apply to all Federalprocurement and non-procurement programs." p. 35:Pfizer would have 30 days to take corrective measures or be excluded fromfederal healthcare programs.Although the exclusion provision was not enforced, the settlement providedthe legal basis for enforcement.What's more, The 2004 CIA shall be binding on the successors, assigns, andtransferees of Pfizer. p... 37The 2009 DOJ-Pfizer settlement stands in sharp contrast to the settlementunder the Bush Administration: the Obama DOJ settlement absolves Pfizer fromcompliance with the 2004 settlement, specifically absolving Pfizer from theCivil Monetary Penalties Law (42 U.S.C. sec. 1320a-7a), and from complianceunder ( 42 US.C. sec 1320-7(b)(7), "the permissive exclusion [from federalhealthcare programs] for fraud, kickbacks, and other prohibitedactivities..." The DOJ-Pfizer settlement (2009) states:"The Office of Inspector General of HHS agrees to release and refrain frominstituting, directing, or maintaining any administrative action seekingexclusion from Medicare, Medicaid and other Federal healthcare programsagainst Pfizer.OPM [Office of Policy and Management] agrees to release and refrain frominstituting, directing, or maintaining any administrative action againstPfizer under 5 U.S.C... sec. 8902a or 5CFR pt. 970....See: p. 10-12,http://www.usdoj.gov/usao/ma/Press%20Office%20-%20Press%20Release%20Files/Pfizer/Pfizer%20Settlement%20Agreement.pdfIt is difficult to comprehend, why the Obama administration, which has madecost-cutting a legislative centerpiece of healthcare reform, would removethe most potent, financial penalty in its existing legal arsenal from itssettlement with Pfizer. Do DOJ officials pretend that $2.3 billion is apunishment for a company that stands to make tens of billions of dollarsfrom unaffected federal healthcare reimbursement??? The settlement is adisincentive to compliance with federal law....Contact: Vera Hassner Sharavveracare212-595-8974ASSOCIATED PRESSDOJ-Pfizer $2.3 Billion settlement Removes Sting of 2004 ComplianceAgreementFines unlikely to end off-label drug marketingUpside is too great for pharmaceutical firms to worry about penaltyFri., Sept . 4, 2009INDIANAPOLIS - Pfizer Inc. was slapped this week with a record $2.3 billionin fines for illegally marketing some drugs, but critics say even thateye-popping total is unlikely to end the sometimes-dangerous practice ofpromoting drugs for unapproved uses.The penalty pales compared to the billion dollars or more in annual revenuethat blockbuster drugs generate, and new government guidelines stir worrythat the marketing of medicines for unapproved uses will become easier."Drug companies will continue to market off-label unless the financialdownside makes it unprofitable," said Dr. Adriane Fugh-Berman, a GeorgetownUniversity associate medical professor.Off-label marketing is a tricky issue. Doctors say prescriptions for usesnot noted on a drug's package label - the fine-print insert that comes withthe prescription - play a crucial role in treating patients, especiallythose with deadly illnesses and few treatment options.However, the Food and Drug Administration prohibits companies from promotingtheir drugs for uses it has not approved.Slap on the wristHuge fines for those caught violating these rules usually just nibble atdrug company sales totals.Pfizer's fine is the largest health care fraud settlement in U.S. JusticeDepartment history. But that $2.3 billion total stands small compared to the$44.2 billion in pharmaceutical sales the world's largest drugmaker rang uplast year."$2.3 billion looks like a lot of money," Fugh-Berman said. "But these arehighly profitable drugs. It will not take them very long to make up thatdeficit."The Georgetown professor has served as a paid witness in court cases overdrug marketing and founded the watchdog Web site pharmedout.org.Pfizer accounted for the settlement in last year's fourth quarter. Thecharge dragged down its quarterly profit by 90 percent to $268 million.Prosecutors said Pfizer promoted four prescription drugs, including thediscontinued pain killer Bextra and the blockbuster Lyrica, for epilepsy andnerve pain such as fibromyalgia, as treatments for medical conditions notapproved by federal regulators. Lyrica alone registered $2.6 billion insales last year.Authorities also accused the drugmaker of plying doctors with free golf,massages and resort junkets.In 2004, Pfizer also paid $430 million to settle allegations it marketed theepilepsy drug Neurontin for pain and psychiatric illnesses. A plaintiff'sattorney in a civil case over the drug has estimated that Pfizer made about$10 billion in Neurontin sales for unapproved uses from 1999 to 2004.Not just PfizerBut Pfizer by no means corners the market on off-label marketing fines.Earlier this year, Indianapolis-based Eli Lilly & Co. agreed to pay $1.42billion to settle a case over the marketing of its top seller Zyprexa, ananti-psychotic drug.Court documents say Lilly made "hundreds of millions of dollars" throughoff-label Zyprexa promotions, but it's hard to pin down the exact impact ofimproper marketing.Zyprexa's annual U.S. sales nearly doubled between 1999 and 2003, to $2.64billion. But company officials note that regulators approved some additionaluses for Zyprexa in that span, and that gave doctors more information aboutits safety and effectiveness.The drug industry - and even some doctors - downplay the frequency ofillegal promotions and their effect on off-label prescriptions, which givedoctors treatment flexibility.For example, the standard treatment for years for severe psoriatic arthritiswas methotrexate, but the drug actually was approved to treat rheumatoidarthritis, said Dr. Eric Ruderman, a rheumatologist at the NorthwesternUniversity Feinberg School of Medicine."If you had to stick to labeling, you couldn't treat people," said Ruderman,who has done some consulting work for Abbott Laboratories and receivedresearch grants from several drugmakers.Ruderman noted that common uses often are technically off-label because it'sexpensive - and often unprofitable - for companies to pursue FDA approvalfor every possible use of their drug.Still, Ruderman said off-label marketing is never appropriate and noted thatdecisions about off-label use should be left to doctors weighing "publishedevidence" supporting it.Potentially dangerous loopholeUnder new rules established this year by the FDA, salespeople may distributeto doctors copies of scientific journal articles that discuss off-labeluses. Industry critics see that as a potentially dangerous loophole.The rules come with qualifiers. For instance, the articles should come frompeer-reviewed journals, and the reports cannot be edited by the drugmaker.Despite the precautions, Fugh-Berman calls the guidance "a horrible idea.""When you go to the Volvo dealer, do you really expect an accuratecomparison of their cars with other manufacturer's cars?" she said.The drug industry says that it does a much better job policing againstoff-label marketing than it did 10 or 15 years ago and that most companieshave mandatory training.Fugh-Berman said fines alone will not end off-label marketing, but they cancurb the practice when coupled with corporate integrity agreements like onethe Justice Department imposed on Pfizer. These can force companies todisclose doctor payments or other information they'd rather keep underwraps."Our sense is that companies fear corporate integrity agreements more thanfines," Fugh-Berman said. "We don't want fines to become just another lineitem in their budget."Copyright 2009 The Associated Press. All rights reserved.~~~~~~~~~~~~~~~~~~ http://www.bloomberg.com/apps/news?pid=20601039 & sid=ahodmf54hyPABLOOMBERG NEWSAIG of Drugmakers Pfizer Is Too Big to Be GuiltyCommentary by Ann WoolnerEXCERPTFour times before the drug giant or its subsidiaries have been slammed bythe government for the same kind of conduct. To resolve claims it promoted off-label uses of Neurontin, an anti-seizuredrug, Warner-Lambert, owned by Pfizer, paid $430 million in 2004, and Pfizersaid it would institute a compliance program. Growth Hormone Three years later, Pfizer's Pharmacia & Upjohn Co. divisions agreed to payalmost $35 million to settle charges related to the human-growth hormoneGenotropin. Among the allegations was that the drug was being promoted as ananti- aging treatment. That same subsidiary has again pleaded guilty, this time as part of theoverall settlement with Pfizer for its promotion of Bextra. So how does Pfizer get away with civil settlements given its history? Thepenalties have ranged from hand slaps to a light punch in the gut, none ofwhich have hurt the company enough for things to change. Last year Pfizerearned $8.1 billion on sales of $48.3 billion. The New York-based company repeatedly winds up as the target of governmentaccusations. Its misdeeds cost federal and state programs hundreds ofmillions of dollars, says the Justice Department, not to mention the humansuffering that comes with taking the wrong drug in the wrong dosage. Just Like AIG But Pfizer is the pharmaceutical equivalent of insurance giant AmericanInternational Group Inc., which was too interwoven into the global economyto be allowed to fail. Likewise, if Pfizer were convicted of a crime, itwould face debarment from federal programs. And that would mean thatMedicaid and Medicare patients would have to either somehow pay pocket forvital medicines the company produces or go without. "You have to balance the desire, an appropriate desire, to punish thecompany against the harm to patients," says attorney Kelton. Pfizer is again pledging to beefing up its compliance program, and there isa way to make it credible. This time, it should put Kruszewski and Kopchinski in charge of it, assumingthey still want to work. (Ann Woolner is a Bloomberg News columnist. The opinions expressed are herown.) To contact the writer of this column: Ann Woolner in Atlanta atawoolner. FAIR USE NOTICE: This may contain copyrighted (C ) material the use of whichhas not always been specifically authorized by the copyright owner. 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