Pharma marketing got another black eye yesterday when the Department of Justice announced a $600 million settlement with Allergan. The drugmaker agreed to plead guilty to a misdemeanor and pay a $375 million fine and $225 million in civil penalties, all for pushing Botox for off-label uses such as headache, pain and cerebral palsy treatment.

It’s far from the biggest off-label marketing settlement we’ve seen; Pfizer owns that crown with its $2.3 billion deal to resolve charges that it mismarketed the now-withdrawn pain killer Bextra and several other drugs. Eli Lilly’s Zyprexa settlement, at $1.41 billion, also outranks the Allergan deal. But the Botox settlement beats out AstraZeneca’s $520 million resolution to Seroquel mismarketing claims.

But the details of the Allergan investigation set it apart. The company didn’t just tout Botox for off-label uses, DOJ says; it actually paid doctors $1,500 to sit through presentations about the wrinkle drug’s versatility. The drugmaker deployed a host of sales reps to help physicians with the paperwork required to get Botox covered for unapproved use, investigators say. Indeed, Allergan made off-label sales of Botox “a top corporate priority,” DOJ says in a statement.

Meanwhile, federal prosecutors say they’re continuing to probe pharma’s marketing practices. ”This is part of a departmentwide and administrationwide effort to really crack down on health care fraud,” assistant AG Tony West tells the New York Times.

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A union pension fund is suing Pfizer and its board, alleging that directors ignored signs that the drugmaker was playing fast and loose with off-label marketing. The fund blames the board, in part, for that record-setting $2.3 billion marketing settlement with the Justice Department.

“The fact that Pfizer has been operated with a systematic disregard for the laws governing its fundamental business was not hidden from the board,” the suit claims (as quoted by Bloomberg), “which repeatedly and knowingly disregarded red flags that clearly demonstrated the company’s wrongdoing.” The lawsuit asks the court to hold Pfizer’s directors liable for the company’s misdeeds and aims to collect “all profits, benefits and other compensation” they received as board members. Pfizer spokesman Chris Loder didn’t return Bloomberg’s calls or e-mail for comment on the suit.

Pfizer is hardly alone in settling claims of off-label marketing, nor is it alone in paying a criminal fine as part of a settlement (through subsidiary Pharmacia & Upjohn, in Pfizer’s case). And that’s just the problem, some pharma observers are saying. A U.S. attorney in Philadelphia went so far as to write a newspaper op-ed scolding drugmakers for their marketing infractions–and promising more enforcement if they don’t change their ways.

But with the settlements amounting to a small fraction of a blockbuster drug’s sales, some say that government fines and restitution isn’t enough of a deterrent. Executives themselves should be on the hook for rule-breaking, or so the theory goes. And some Blue Cross Blue Shield organizations have taken that strategy, naming Pfizer executives personally in a recent suit over off-label Bextra marketing. Will this new personal approach become a trend?

Source: FiercePharma

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In the second off-label marketing settlement this week, two Johnson & Johnson subsidiaries have agreed to pay $81 million to wrap up a probe of their Topamax promotions. The deal involves a $6.1 million criminal fine for Ortho-McNeil Pharmaceutical, stemming form a single misdemeanor violation, NPR reports.

The settlement stems from whistleblower lawsuits that alleged J&J had promoted Topamax–approved for treatment of epilepsy and migraine prevention–for a variety of psychiatric uses. According to the government, Ortho-McNeil paid doctors to come with sales reps on detailing calls and suggest unapproved uses for the drug. Doctors also were allegedly hired to speak at meetings and dinners about off-label Topamax use.

There has been a string of off-label marketing settlements over the last couple of years. Given the huge size of some of them–think Eli Lilly’s $1.4 billion Zyprexa settlement or Pfizer’s $2 billion-plus Bextra deal–this $81 million payment seems fairly small. But it does emphasize the government’s drive to combat off-label marketing, and there’s no sign that drive will end any time soon.

“Working with our federal and state partners, we will take action against pharmaceutical companies that promote their drugs for off-label uses,” Assistant AG Tony West promises in a statement. “This type of unlawful marketing undermines the FDA’s important role in deciding which drugs are safe and effective for consumers and costs the taxpayers billions of dollars each year.”

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It looks like Scott Reuben, the Massachusetts anesthesiologist said to have used phony research data in 21 published papers, has reached a plea deal with the feds.

Federal prosecutors accused Reuben of health-care fraud for allegedly faking data that suggested after-surgery benefits from painkillers including Merck’s Vioxx and Pfizer’s Bextra and Celebrex, the Justice Department said yesterday. The Justice announcement said he faces as much as a 10-year sentence and a $250,000 fine.

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But the Associated Press said Reuben, the former chief of acute pain at Baystate Medical Center in Springfield, has agreed to plead guilty in exchange for prosecutors recommending a more lenient sentence. The sentence would also reportedly include forfeiting assets of at least $50,000 that Reuben received for the allegedly phony research. The Republican, a Springfield newspaper, said Reuben has signed a plea agreement under which he must pay $420,000 in restitution to pharmaceutical companies.

Reuben is accused with taking pharma money for doing research, then fabricating results and getting studies published in anesthesiology journals.The tale began to unravel last year as Baystate said it found Reuben had faked data and the Boston U.S. attorney began looking into the case.

Reuben’s attorney has said in the past his client cooperated with the hospital review and expressed regret. The lawyer didn’t immediately return a call for comment after Thursday’s federal complaint, the AP said.

Source: The Wall Street Journal

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AstraZeneca posted strong third-quarter numbers and boosted its full-year forecast by a whopping 40 cents per share. But one of the biggest pieces of news to come out of the company’s Q3 report is a $520 million tentative agreement with the U.S. Attorney’s Office in Philadelphia. Like several other drugmakers who’ve announced big settlements this year, AstraZeneca was facing a probe into alleged off-label marketing of a drug. In this case, the antipsychotic Seroquel.

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AstraZeneca says it has agreed in principle to pay $520 million to end the probes, with negotiations ongoing to finalize the civil settlements and a corporate integrity agreement. Company executives declined to provide more details about the investigation, beyond the fact that off-label Seroquel marketing allegations were part of it.

Now, $520 million pales next to Eli Lilly’s $1.4 billion settlement related to mismarketing of Zyprexa, one of Seroquel’s direct rivals in the antipsychotic realm. And it really seems to shrink compared with Pfizer’s record-setting $2.3 billion settlement of claims that it mismarketed a handful of meds, including the now-withdrawn painkiller Bextra. Still, the AZ deal involves a big chunk of change, and the company had to increase its legal set-aside to $538 million.

In other Q3 news, pandemic flu was kind to the drugmaker, helping to propel profits upward by 22 percent to $2.12 billion. Plus, the company anticipates the kindness to continue, so it raised its full-year earnings forecast to a maximum of $6.40 from its previous top of $6. And during a quarter when some other Big Pharmas posted profits growth despite sales stagnation, AZ revenues grew by 5.5 percent, helped by strong Crestor sales and forestalled generic competition.

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Pharmacia & Upjohn Co., a subsidiary of drug giant Pfizer Inc., has agreed to pay fines totaling $1.3 billion for felony violations for advertising its anti-inflammatory drug Bextra for uses that were not approved by the U.S. Food and Drug Administration (FDA). According to the U.S. Attorney for the District of Massachusetts, it was the largest fined ever levied in the U.S. for any matter.

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According to the Justice Department, Pharmacia & Upjohn Co. persisted in marketing Bextra for treatment of acute pain, surgical pain, and other unapproved uses and at dosages specifically not approved by the FDA due to safety concerns about the drug.

Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – any use not specified in its application for FDA approval.

In its investigation, the government found that when marketing Bextra, Pharmacia failed to inform physicians or consumers that the FDA had denied its application for the “off-label” uses.

In addition, on Sept. 2, Pfizer agreed to pay an additional $1 billion plus interest to settle civil claims that it fraudulently promoted and marketed Bextra, as well as three other drugs in its portfolio, Geodon, an anti-psychotic drug, Zyvox, an antibiotic, and Lyrica, an anti-epileptic drug, as well as claims that it paid kickbacks for these, as well as other drugs, to induce physicians to prescribe the drugs.

Noting the record-breaking criminal fines involved, acting United States Attorney Michael K. Loucks said in a press release, “We can only hope that with this resolution, the era of pharmaceutical companies carrying on illegal marketing activities with impunity with the cost born by the patients and the health care system, has come to an end.”

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You may remember something about the $2.3 billion that Pfizer said it is paying to settle a Justice Department probe into accusations of off-label marketing of painkiller Bextra, which is now off the market. That news was buried with the announcement in January that Pfizer was buying rival drug maker Wyeth.

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Today the details of the settlement were released and they are harsh: Pfizer agreed to plead guilty to a felony violation “for misbranding Bextra with the intent to defraud or mislead.” The settlement is the largest in Justice Department history, according to the DOJ’s statement.

It will pay a criminal fine of just over $1 billion, which the DOJ says is the largest ever imposed in the U.S. for any reason. The company will also pay $1 billion to resolve civil allegations that the company illegally marketed Bextra, the psychiatric drug Geodon, antibiotic Zyvox and anti-epileptic drug Lyrica.

And, the company agreed to an “expansive corporate integrity agreement” with the Office of Inspector General of the Department of Health and Human Services to establish procedures and reviews to detect and avoid similar matters in the future, said the DOJ.

“We regret certain actions taken in the past, but are proud of the action we’ve taken to strengthen our internal controls and pioneer new procedures so that we not only comply with state and federal laws, but also meet the high standards that patients, physicians and the public expect from a leading worldwide company dedicated to healing and better health,” Pfizer’s general counsel Amy W. Schulman said in a statement.

Source: The Wall Street Journal

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An anaesthesiologist is accused of allegedly fabricating data in at least 21 studies concerning the benefits of pain drugs such as Pfizer’s Celebrex (celecoxib), Lyrica (pregabalin), Bextra (valdecoxib) and Neurontin (gabapentin); Merck & Co.’s Vioxx (rofecoxib); as well as Wyeth’s antidepressant Effexor XR (venlafaxine). The allegations involve studies published in medical journals since at least 1996, according to information from the hospital where the researcher was employed.

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The Baystate Medical Center has asked medical journals to retract the 21 studies, some of which included positive findings for Pfizer’s and Merck’s drugs. Research summaries by the doctor, Scott Reuben, also showed favourable data for Effexor XR as a pain treatment, and he is reported to have suggested to the FDA that the use of some pain drugs he studied should not be restricted, based on his own data for safety and efficacy.

The chief academic officer of the hospital, Hal Jenson, explained that during a routine review of Reuben’s research summaries last May, physicians discovered that the research conducted was not approved by an internal hospital review board. In many cases, “there was no clinical trial because there were no patients,” Jenson remarked, adding that Reuben “was solely responsible for the fabrication of data.” Reuben is on indefinite leave from his position, Baystate indicated.

Pfizer stated that it was “not involved in the conduct of any of these independent studies or in the interpretation or publication of the study results.” The drugmaker underwrote some of Reuben’s research between 2002 and 2007 for drugs that include Celebrex, Lyrica and Neurontin, and he was a member of Pfizer’s speakers bureau. Company spokesperson Sally Beatty noted that Reuben’s data were not included in clinical trials that led to the FDA approval of Celebrex and Lyrica for pain indications.

In further reactions to the news, Wyeth indicated that it was not aware of having any financial ties to Reuben; a spokesperson for the FDA was unaware of the matter; and no comment was available from Merck. Steven Shafer, editor in chief of the journal Anesthesia & Analgesia, which published ten of Reuben’s falsified papers, stated that there are “millions of patients worldwide, where postoperative pain management has been affected by the research findings of Dr. Reuben.”

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Pfizer on Monday announced new cost-cutting measures that will entail a 10-percent reduction in its workforce, or more than 8000 jobs, as well as the closure of five manufacturing sites. The company also reported that fourth-quarter earnings dropped 90 percent to $266 million compared to the prior-year period, due in part to a $2.3-billion charge to settle investigations on past marketing practices involving Bextra. The settlement, which requires the approval of a federal judge, is the largest amount paid by a drugmaker to resolve alleged off-label marketing.

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In regards to workforce reductions, company spokesperson Ray Kerins stated that the job cuts, which will affect most departments, including sales, R&D, and administration, would begin in the first quarter and be completed by 2011. The drugmaker did not specify which manufacturing sites it would shut down. Pfizer’s Chief Financial Officer Frank D’Amelio predicted the latest cost-cutting measures will “achieve anticipated incremental savings of approximately $3 billion by the end of 2011.”

In quarterly results, Pfizer said that pharmaceutical sales declined 4 percent, reaching $11.2 billion. Lipitor sales fell to $3.1 billion, down 8 percent from the year-ago period. Revenue for Lyrica gained 25 percent to $702 million, in part due to increased use of the drug in fibromyalgia, the company said. Celebrex sales rose to $664 million, up 4 percent from year-ago results, while Sutent recorded a 21-percent increase in sales to $220 million. Revenue for Chantix dropped 36 percent to $180 million because of continued negative impact of changes to the drug’s US label.

Total revenue during the quarter, which fell 4 percent to $12.3 billion, was negatively affected by the loss of patent exclusivity for Zyrtec and Camptosar in the US, as well as generic competition for Norvasc in certain Asian markets. For the full-year, Lipitor sales slipped 2 percent to $12.4 billion versus 2007, while Lyrica surged 41 percent to $2.6 billion. Overall, Pfizer reported that earnings and revenue were largely flat, compared with 2007, at $8.1 billion and $48.3 billion, respectively.

Going forward, Pfizer lowered its earnings guidance to $1.85 to $1.95 per share, falling short of consensus estimates that had predicted profit of at least $2.49 per share for 2009.

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With all the problems Pfizer has with R&D, politicians carping about prices and a rising sea of generics, we almost forgot about the mountain of litigation looming over the company from the sale of painkillers Bextra and Celebrex.

But this morning the drugmaker said it has reached agreements in principle that would settle 90% of personal injury suits that claim those medicines caused heart attacks and strokes. The tab: $745 million. That’s a couple of hundred million more than some lawyers had guessed recently that the company would end up paying to put the lawsuits behind it.

Pfizer will also fork over $60 million to Attorneys General in 33 states and the District of Columbia, who have filed suits over Pfizer’s promotion of Bextra, the son of Celebrex that was withdrawn from the market in 2005 over cardiovascular risks and some life-threatening skin reactions. At the time the FDA also said Bextra didn’t have any proven advantage over other similar painkillers.

The remaining $89 million will resolve class actions alleging fraud in connection with the promotion of Celebrex and Bextra.

It’s small change compared with Merck’s $4.85 billion settlement of lawsuits over Vioxx, the problem child in the group of painkillers knows as Cox-2 inhibitors. State and federal judges have ruled that plaintiffs have failed to present reliable scientific evidence proving that Celebrex can cause heart attacks or strokes at its most commonly prescribed dose.

Amy Schulman, Pfizer’s top lawyer (other than Jeff Kindler), told the WSJ the company is hopeful that it can resolve the remaining 8% to 10% of the Celebrex and Bextra personal injury cases that weren’t part of the settlement. None of those cases have reached the trial stage.

Source: The Wall Street Journal

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