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For Off-Label Drug Pushers, Crime Pays

November 10, 2009

Bloomberg reporter David Evans’ frightening roundup of fraud and deception by leading drug companies, “Big Pharma’s Crime Spree” (called “Pfizer Broke the Law by Promoting Drugs for Unapproved Uses” online), should be required reading by anyone who gets any prescription drug from their doctor. In yesterday’s story, Evans outlines how $7 billion in fines and penalties has not deterred pharmaceutical companies like Pfizer, Eli Lilly and others from illegally marketing “off-label” uses of drugs to doctors, despite potentially deadly consequences for unwitting patients.

As one Harvard Medical School expert told Evans, drug makers “deceptively marketed drugs for unapproved uses, putting millions of people at risk of chest infections, heart attacks, suicidal impulses or death.” Among the examples of drug company crimes in the story:

  • Clinical trials had shown Pfizer’s Bextra could cause heart damage and death, but the company for years promoted off-label uses that exposed patients to the drug’s lethal effects until FDA pulled Bextra for all uses in 2005.
  • Pfizer promoted its drug Zyvox over other antibiotics for use in patients suffering drug-resistant pneumonia, a potentially deadly disease. Pfizer knew that evidence showed other drugs were more effective, but continued its off-label promotion even after FDA warned the company that its marketing “poses serious health and safety concerns.”
  • Drug maker Warner-Lambert was under investigation for illegal off-label promotion of Neurontin when Pfizer bought the company in June 2000. Neurontin was approved in 1993 for treating epilepsy, but FDA warned that off-label uses could lead to severe depression and suicide. Pfizer continued to promote off-label uses for years.
  • For at least four years, Eli Lilly illegally marketed the psychiatric drug Zyprexa, even though the death rate for patients on the drug in five company-sponsored drug trials was twice that of those taking a placebo.
  • InterMune promoted its drug Actimmune for treatment of chronic lung disease, despite evidence of severe respiratory failure in some patients taking the drug.

For its off-label promotion of Bextra, Pfizer paid a $1.19 billion criminal fine earlier this year, the largest such fine in U.S. history. It also paid $1 billion in civil suits by patients suffering from the effects of Bextra and three other drugs.

While Pfizer’s billion dollar lawsuit payouts made headlines, few pointed out the $16.8 billion in revenue Pfizer made from Bextra and the three other drugs it was marketing illegally for at least seven years. Sales of Neurontin show that Pfizer was more interested in revenue than patient safety: 94% of the $2.27 billion from sales of the drug in 2002 came from off-label uses. Pfizer continued off-label marketing of the drug even after receiving a second FDA warning letter in 2002. In 2003, Neurontin sales were up again, to $2.7 billion. Given its 2004-08 revenue of $245 billion, Pfizer’s total fines and penalties of $2.75 billion represents a cost of doing business of just over 1%.

Lilly pleaded guilty to illegally marketing Zyprexa and paid $1.42 billion in fines and penalties in January 2009; the drug maker brought in $36 billion in revenue on the drug from 2000 to 2008.  InterMune’s revenue from Actimmune jumped to over $100 million based on off-label uses, making up 94% of the company’s total revenue (as noted in our inaugural post, InterMune’s former CEO was recently found guilty of wire fraud in connection with his touting Actimmune).

Testing new drugs is an expensive and lengthy process, but drug makers can evade regulations and cut costs by getting a drug approved for a more simple problem and then selling the drug for another, riskier (and more lucrative) condition. In a New England Journal of Medicine (NEJM) article last year, Stanford Medical School Professor Randall Stafford noted that off-label uses are sometimes part of drug companies’ business plans. Stafford stated that the promise of off-label usage “…undermines the incentives for manufacturers to perform rigorous studies — and instead subtly encourages them to game the system by seeking approval for secondary indications for which clinical trials are less complicated and less expensive.” In 2007, the Canadian Medical Association criticized drug makers for evading the law and manipulating doctors into prescribing off-label uses “in order to evade onerous and expensive regulatory requirements and expand their market share.”

The recent lawsuits show how drug makers use cash, travel, and other incentives to bribe doctors to prescribe untested drugs. Pfizer even paid doctors up to $1,000 a day for the right to spend time with them (given that one study found that “inexpensive and even trivial gifts from pharmaceutical companies can significantly influence physician prescribing behavior,” imagine the impact of $1,000/day).

As Evans notes, Stanford’s Stafford recently conducted the first-ever national study on the extent of off-label prescribing, finding that 15% of all drug sales nationwide, about 10 million prescriptions annually, are for unapproved, off-label uses of drugs with little or no evidence that the drugs work. Stafford’s earlier NEJM piece also notes that while FDA policy forbids the direct promotion of off-label uses, drug companies have responded by taking advantage of grey areas where the policy is undefined or unenforced. For example, drug makers can “educate” physicians with studies and journal articles touting off-label benefits of drugs (Merck was so keen  on this strategy it actually created and distributed a phony medical journal). Rather than strengthening its rules in light of drug company scandals, Stafford notes that in 2008, FDA proposed even weaker oversight on the use of promotional journals.

In 2004, even as Pfizer was negotiating the deal with prosecutors that resulted in their promise to stop off-label marketing of Bextra, the company was continuing to market off-label uses of another untested drug. As Evans says, “Pfizer managers were breaking that pledge not to practice so-called off-label marketing even before the ink was dry on their plea.” Supervising the 2004 plea negotiations was Jeff Kindler, then Pfizer’s chief general counsel. Kindler is now Pfizer’s CEO, taking home $13.7 million in 2008. Kindler was also recently elected to the Federal Reserve Bank of New York.

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