Big Pharma: A Glimpse At "The Job Creators"... With The Curtain Pulled Away

                                                                                  "Just one more and I'll be all better."

Alan: Without strict regulation and dogged enforcement, the "free market" would kill/injure even more people than its current staggering toll.

Feds Have Beaten Pharma Into Submission Over Off-Label Drug Use, But At What Cost?

John Osborn

Forbes Magazine

Johnson & Johnson announced this week that it will pay $2.2 billion to settle allegations that its subsidiary Janssen Pharmaceuticals illegally promoted the anti-psychotic treatment Risperdal, as well as allegations related to the sale and marketing of several drugs that J&J acquired when it bought Scios.

At a certain point you get numb with the numbers (billions and billions forfeited . . . ) and your eyes glaze over the details as you develop a distinct impression that those working for biopharmaceutical companies must lack any sort of ethical compass.  After all, the government says they are all too willing to abandon medical principle and risk patient safety if it might gain them a few extra prescriptions.  A casual reading of the Justice Department’ssentencing memorandum concerning Risperdal will get you to that point in a hurry.

Janssen allegedly ignored FDA warnings not to promote its treatment for use in elderly patients with symptoms of dementia unassociated with the drug’s indicated use to treat schizophrenia (it was later approved by the FDA as adjunctive therapy for those suffering from a type of bipolar disorder or episodes of acute mania).  The Janssen marketing messages, according to the government, focused on various “behavioral disturbances associated with dementia” that apparently had no relation to underlying psychosis.  Janssen also allegedly “downplayed” the risk of stroke associated with Risperdal when prescribed to an elderly patient and manipulated clinical study data that showed heightened risk of adverse events in this population.

If the government’s policy was designed to beat the industry into submission, it seems to have worked.  Although most of these big dollar settlements date back to sales and marketing excesses that occurred a decade ago or more, from what I have observed those now in charge do indeed get it.  Compliance policies are sophisticated, training programs are robust and violations are dead serious, as they should be.  Incentive compensation programs have been altered to limit rewards for off-label prescriptions.  Company sales representatives no longer meet with physicians whose practices do not include on-label patients.

But all this has been accomplished at what cost?  If you think that the industry had lost its way, were there better ways to get it back on track that might not have siphoned off billions from corporate R&D programs?  This aggressive prosecutorial approach was not the only way (and, in my opinion, probably not the best way) to enforce compliance with FDA regulations.  Moreover, there remain substantial problems with the government’s policy.  I have addressed this in detail in a 2010 article published in the Yale Journal of Health Policy, Law and Ethics.

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I took an in-house counsel job with a Merck joint venture company in 1992 after working with a large law firm and serving in government.  Back in the good old days, it was not uncommon to overhear the marketing gurus speak of their annual performance goals and comment off-handedly that “if we don’t get at least one warning letter a year from the FDA we aren’t really doing our job.”   It’s not hard to imagine that the FDA eventually grew tired of writing warning letters that were pasted on office walls like trophies.  The Justice Department’s efforts were led by the U.S. Attorneys offices in Boston and Philadelphia, who developed some very creative theories of liability that equated off-label promotion with the submission of a false claim for reimbursement in violation of a Civil War era statute.

The focus on off-label promotion as a distinct problem separate from financial impropriety was signaled when Pfizer/Warner-Lambert in 2004 settled an investigation related to the promotion of its epilepsy product Neurontin.  The government introduced into evidence a now much quoted excerpt from a sales manager’s motivational speech to the troops that laid bare the ugly business of building a blockbuster in spite of a narrow label.  It was pretty clear that at least some folks in the industry had lost their moorings:

We can’t wait for [physicians] to ask, we need [to] get out there and tell them up front. Dinner programs, CME programs, consultantships all work great but don’t forget the one-on-one. That’s where we need to be, holding their hand and whispering in their ear, Neurontin for pain, Neurontin for monotherapy, Neurontin for bipolar, Neurontin for everything.

Many investigations and settlements have come in the wake of Neurontin.  With the widespread use of email and electronic communication, the evidentiary trail within large companies was extensive, and it was the rare firm that did not have some sales manager somewhere who was not fixated on driving off label prescribing.  This was said to establish the requisite intent on the part of the company to “misbrand” the product by introducing it into interstate commerce without adequate directions for use in violation of the Food, Drug and Cosmetic Act.

The headlines have become routine:  GlaxoSmithKline to pay $3 billion, Pfizer to pay $2.3 billion, Abbott to pay $1.6 billion, Eli Lilly to pay $1.415 billion.  This week’s J&J settlement is only the latest in a series in which large drug companies have been forced to write multi-billion dollar checks to avoid prosecution and exclusion from participation in Federal Medicare and Medicaid reimbursement programs.

I am loathe to make blanket statements about the behavior or perspective of an entire industry, but to the extent that there prevailed a sort of casual attitude about compliance with the fundamental precept of promoting a drug only for those indications approved by the FDA, this was a huge problem with foreseeable consequences.  Companies have a profound duty to act ethically, to speak truthfully, to conduct their business in compliance with laws and regulations.

That said, my ongoing concerns with the government’s enforcement policy are, more or less, as follows.  Regulatory policy should be based on rules that are clear, with a process that is transparent, and on decisions that are accountable and reviewable, and that are congruent with other public policy imperatives.  The FDA disagrees, but I do not believe the rules are clear.  It’s clear that you cannot promote Neurontin “for everything,” but there is genuine complexity and subtlety in the myriad ways in which drug companies engage in legitimate communication with physicians and the FDA has not seen fit to issue detailed, clarifying regulations that would address many of these circumstances.  J&J’s General Counsel Michael Ullmann referred to this problem, saying that the company is “committed to working with the U.S. Food and Drug Administration and others to ensure greater clarity around the guidance for pharmaceutical industry practices and standards.”

English: Logo of the U.S. Food and Drug Administration (2006) (Photo credit: Wikipedia)

It’s also a problem, a pretty big problem in fact, that there is no distinction under the regulations between truthful speech and false speech; if the FDA has not approved the indication then you are promoting off-label and you are liable regardless of the amount of medical, scientific and clinical data that supports your position.  This issue was the focus of a December 2012 decision by the 2ndCircuit U.S. Court of Appeals in United States v. Caronia.  Very few of these cases are litigated because of the severity of the penalty associated with losing.  And until last year’s Caronia decision, no court had ruled that truth was a defense in a misbranding case brought under the Food, Drug & Cosmetic Act.  The FDA declined to appeal the loss, but will this ruling finally compel the agency to issue clarifying regulations?  Don’t hold your breath.

There are some optimists out there who believe that we are coming to the end of the road.  Law 360 quotes white collar defense lawyers who say that the government is moving on to other matters, and that the J&J settlement may be the last of the big ones, if for no other reason, the tolling of the ten year statute of limitations under the False Claims Act.  We shall see.

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During dark moments I occasionally ponder the conundrum as to how an industry devoted primarily to discovering medicines that save, extend, and increase the quality of lives has come to be held in such low repute by the general public.  A recent survey by the Reputation Institute finds the pharmaceutical industry’s reputation index in the mid 60s, above that of banks, airlines, insurance and utility companies, but below automobiles, computers, consumer products and retail.

Allow me to climb out on the metaphorical limb and surmise that this relatively desultory reputation is the result of the public’s rejection of the proposition that pharmaceutical and biotech firms care about patients and strive to develop innovative new medicines.  It’s not hard to see why.  For one thing, the ubiquitous presence of tacky direct to consumer advertisements present the industry as one more concerned with sales than with having a serious discussion about medical science with a patient and their physician.  But one reason, as well, surely is the spate of government investigations and settlements based upon allegations of illegal promotion.

Until the industry can get beyond these cases, its reputation is unlikely to improve.