Peter Rost Vs. Pfizer: The Evidence Comes In
11 CommentsBy Ed Silverman // February 4th, 2008 // 11:08 am
Last November, the controversial former Pfizer exec won a significant victory when a federal appeals court ruled that his whistleblower lawsuit against the drugmaker should proceed. A federal judge had previously dismissed the case because Rost “failed to plead his fraud claims with sufficient specificity,” a reference to rule 9b, a provision of the False Claims Act that requires particular info about false claims submitted to the government for payment. This might include amounts charged, drugs prescribed, patient diagnosis and individuals involved in billing.
Given the level of detail required, however, winning the reinstatement looked like the easy part, because the info contained in Medicaid databases may compromise patient privacy. Last week, for instance a whistleblower lawsuit filed by two former sales reps for Johnson & Johnson’s Ortho-Biotech unit was dismissed, in part, because there was a lack of such detail.
Now, though, Rost has filed documents with US District Court in Boston offering examples that may clear this high hurdle (here is the filing). And there are at least two potentially significant developments here. One is the long-term implication for Pfizer, should Rost ultimately prevail. The other is that his efforts may serve as a template for other whistleblowers who are similarly stymied by federal judges seeking details that are, otherwise, very hard to come by.
In his filing, Rost cites approximately 200 instances in Indiana which Genotropin, a human growth hormone, was marketed by Pharmacia (which was bought by Pfizer) for unapproved uses, such as combating aging in adults and treating short stature in children.
The examples come from the state’s Medicaid database, which appear to have provided dispensing and diagnosis coding and apparently substituted patient info with codes, which allows Rost to circumvent any privacy issues. (Take a look at pages 31 and 32, as well as Exhibit A). Pfizer has already paid $35 million in fines in connection with off-label marketing of Genotropin. But if Rost is able to use this new info successfully, the drugmaker may one day face much larger amounts in damages.
Here’s the math: Pfizer may face civil penalties of between $5,000 and $10,000 for each false claim (look here). Now, let’s extrapolate by multiplying that by 200 - the number of cases in Indiana - and multiplying that by 50 states and you get $50 million to $100 million in penalties. But that’s before treble damages based on sales to the government for off-label indications, which could add up tens of millions of dollars more, depending upon whether both off-label and kickback claims are proven.
ol cranky
I have a couple of questions regarding this.
#1 Even though off-label promotion of HGH to combat aging is a violation of regulations, it’s unlikely that use of the product for an aesthetic indication would have been billed to Medicaid since cosmetic use of medications is generally a cash business (the only exception to this that I can think of would be treatment with botulinum toxin using a dx of migraine/headache or bleph). It’s my understanding that this non-compliant promotional activity wouldn’t qualify as defrauding the government as necessary under the FCA. As such, is the inclusion of these violations in a qui tam suit just so these infractions are evaluated and addressed by the proper government agencies in addition to the fraud?
#2 if the relator must provide documentation of specific claims submitted to Medicaid and the DOJ has declined to become a party to the case, how are relators/qui tam attorneys supposed to access that information (especially if the relator has left the employment of the defendant)? My concern about the very strict interpretation of what must be supplied under 9(b) is that it not only helps the companies hide what they’re doing, it pretty much gives them a blueprint encouraging them to further limit who has access to what information so that those in the trenches, who can and would provide documentation proving the lack of compliance and even the intent of the non-compliant activities, would not be able to provide the documentation to clear the 9(b) hurdle. Frankly, if an employee tried to get that information, it would likely alert senior management to a potential whistleblower. Many states are bona fide “at will” states that allow for retaliation against/firing of potential whistleblowers (the only protection these people would have is under federal regulation and they would need to federal government to confirm that the whistleblower’s expressed concerns/complaints are valid attempts to prevent/correct regulatory compliance issues as opposed to raising ethical concerns).
I’m sure I’m not the only one who finally turned to qui tam attorneys because I had no faith that the FDA/DHHS would investigate and address compliance issues unless they were included in a case under FCA. As it is, the qui tam lawyers (and, I guess, DOJ) don’t have time for you unless the case is against big pharma and/or is expected to generate a huge fine. This is understandable considering the amount of work the attorneys have to do but that knowledge emboldens executives to continue non-compliant activities with a wink and a nod (written documentation and public statements are focused on compliance to lend the appearance of compliance and provide plausible deniability. All the while these execs are pushing to increase sales via shady means). I am sure I am not the only one who’s been told that I would be committing career suicide to report my company because the company can fly under the radar but my name will be out there as a “trouble-maker”.
Recent headlines remind us that even those on the clinical research side are getting pulled/pressured into support of non-compliant activities. In the past, the worst we were faced with was [Sales via] Medical Affairs pressuring us to use important customers (always called KOLs regardless of their actual status as such) as investigators on clinical trials, pay them what they request (regardless of UCR) and disregard or tip-toe around site performance issues. Now there are legitimate reasons to be concerned about investigator sponsored trial programs which are no longer about advancing science or additional knowledge about a drug’s potential in additional indications to determine if additional resources should be assigned to a new development program.
If we can’t rely on the FDA to investigate and the hurdle under FCA 9(b) is too high, who are potential whistle-blowers to turn to in order to get relief?
Ed Silverman
Hi Ol’ Cranky,
I’m afraid I don’t have the answer to your first question. As to the second question, perhaps filing a FOIA request to the appropriate state agency would be useful and, from there, cultivating helpful individuals.
ed at Pharmalot
Dan
Some thoughts about corporate whistleblowers:
1. Most, I believe, do not initiate such a case for a chunk of any settlement they may receive if they are successful in having thier case intervened by the government. Peter Rost, for example, is worth hundreds of millions of dollars, I understand, yet still chose to blow the whistle, although obviously his true motivations for filing his case can only be based on what Dr. Rost has stated frequently to others.
2. Most whistleblowers blow the whistle, I believe, because they have had enough after learning a great deal about the wrongdoing of a corporation. Most, I believe, do not blow the whistle because of any grudge they have against any particular corporation, or because of emotional instability of some nature. They possibly examined situations more deeply than others, which I believe is rare in itself.
3. I speculate that blowing the whistle against such powerful forces as large coporations and the government is a very difficult process to implement. Most people, I believe, choose to be deliberately ignorant regarding what is usually significant wrongdoing that has occured and continues to occur with corporations, for example, which may be why more whistleblowers do not exist. Why? Because ignorance is bliss, especially if one is receiving a rather large paycheck from a corporation that is conducting what may be illegal wrongdoing. It’s my understanding that a whistleblower risks quite a bit, both tangible and intangible or intrinsically, by implementing such a case.
4. It is also my understanding that the true etiology of one who chooses to blow the whistle is largely unknown. Yet I consider whistleblowers overall to have a great deal of courage and drive to do the right thing by insisting that others do the same, if there is such a strong belief by such people that some corporations are conducting activities that are damaging or corrupting others.
So I applaud Dr. Rost and those few others who have chosen to blow the whistle, pharmaceutical or any other industry, because it is my belief that thier actions are mostly for righteous and valid reasons, instead of all of the negative reasons they are accused of by others because of thier disclosures.
BP Watch
I completely agree with Dan. In order for the actions of Big Pharma to be appropriately controlled by the existing rules, regulations and laws, the American public needs to have more people like Peter Rost. He is willing to stand up for what is right rather than be bullied into submission by Big Pharma. It takes a tremendous amount of courage that I wish more people had.
Dan
BP Watch,
Thank you for the compliment,
Dan
Doc
Rost is like every other whistleblower - a hero. These people take risks that most would not dare to, in order to bring justice to greedy corporations. We all pay through our taxes, when the government overpays. I work in big pharma, these corporations are greedy, do they help people? Yes. Are they greedy? Yes. I hope Rost gets a hundred million dollars from Pfizer.
Chris
I do not know any of the whistleblowers revered by some on here, not do I know their motivations. But if I might be just a teeny bit cynical, annointing them as heroes because of their desire to ‘bring justice to greedy corporations’ is a bit rich. Of course what they do with the money is their business, and it may be used for good or otherwise, but when successful, there is rather a lot to dispose of. Let’s not get carried away by assuming altruism over opportunism.
BLD
Most individuals who ‘blow the whistle” on Big Pharma never collect a penny for their actions. Many simply become frustrated with dealing with all the commercial crooks and try to do what is right inside a company and report it through “anonymous” means. For these unfortunate souls, the “anonymity” disappears, they are labeled disloyal employees, retaliated against and terminated from their jobs. All because they cared enough about the public to raise questions about some of their company’s shady activities. These people are “black-balled” by Big Pharma and have a lot of trouble finding an equivalent job. Once the word is out in the Big Pharma mafia, no other company will touch you because you could be a “spy” or a “traitor.” Many take their issues forward, but end up buried in government bureaucracy. It could take years and years for things to be resolved as the Big Pharma lawyers try to tear you apart. I believe that an underlying commitment to ethics and morals as well as a conscience and a knowledge of right from wrong drive these people. Any money that they ever end up with is not worth the living hell they have to go through because they care enough about their fellow human beings to stand up and question unethical actions.
doris day
Are you aware that Peter Rost is not telling you the truth. He blackmailed Wyeth into paying him “go away’ money. He asked our Pfizer VP of Marketing to give him a job, when we bought Pharmacia, which was a stupid company. He told us that he would unload his shit on us if we did not give him an office. He then sat in that office, this freeloader and never did anything. Ask him. Then he cheated at Huffington Post, where Arriana Huffington fired him for writing blogs pretending to be other people.
Finally, did he tell you that he is not a Doctor. Ask him for his MD License Number. Verify yourself, before you bring yourself down by associating with this scumbag. Honest Abe
unclear
How does a Medicaid claim prove that the drug was promoted improperly? Drugs are precribed and administered for off-label use all the time, at the perogative of the physician.
Though I can see how evidence of the promotional activity, along with a pattern of higher than usual off-label prescription claims in a related geographic area could establish a case, when it comes to calculating a fine, will it be assumed that each and every off-label use was a result of unallowed marketing activity?
Bob Freeman
Unclear: good question–since a physician’s diagnosis is not linked to the prescription, It’s difficult to know whether the prescribing is off-label unless the dose prescribed is outside the bounds of approved labeling. It is possible (retrospectively) to link pharmacy claims data with physicians’ records. A number of managed care organizations that provide services to Medicaid as well as private-sector patients have “flags” for use that needs to be checked.