Two False Claims Act whistleblower lawsuits are being resolved as part of a $491 million settlement between Wyeth Pharmaceuticals, now a division of Pfizer, Inc., and the U.S. DOJ. This time around, Wyeth’s misconduct was based on off-label sales tactics for Rapamune®, an immunosuppressive drug that FDA approved for use in renal (kidney) transplant patients. Unfortunately for the pharmaceutical industry, Pfizer’s latest compliance woes are a stark reminder that off-label cases are anything but passé.
According to a DOJ press release, Wyeth incentivized sales reps to promote Rapamune® for non-renal transplant patients. The Government charged that Wyeth’s off-label promotional activities occurred from 1998 through 2009 and included the use of sales training materials that reps were encouraged to use in detailing a wide variety of transplant physicians. Encouraging physicians to switch patients to Rapamune® from another immunosuppressive drug and to combine drug therapies were further ways Wyeth purportedly attempted to boost Rapamune® drug sales.
The settlement agreement resolves one whistleblower case brought by former Rapamune® sales representative Marlene Sandler and pharmacist Scott Paris. A second qui tam lawsuit filed by Mark Campbell, another former member of the Rapamune® sales force, was also settled. Both suits were brought in federal court in the Western District of Oklahoma. Whistleblower rewards for the relators are still being finalized, according to the Government, and were not disclosed. Pfizer will pay civil penalties of $257.4 million, of which the federal government will collect $230 million, and the various states will receive $27.3 million. Additionally, because Wyeth pleaded guilty to a criminal Information alleging FDCA violations, Pfizer will also pay criminal fines set at $157.6 million, plus $76 million in forfeiture penalties.
Observations — Another Setback For Pfizer . . . And the Industry
Pharmarisc readers may recall that earlier this year the First Circuit ordered Pfizer to pay a $142 million jury verdict to Kaiser Foundation Health Plan, Inc. for “damages” related to the off-label promotion of Neurontin®. (See our April post titled, “First Circuit Slams Pfizer in Three Neurontin RICO Suits; Affirms $142 Million Verdict.”) As we predicted then, companies that have pleaded guilty to misbranding violations based on off-label promotion may face more trouble based on the First Circuit’s ruling — and that includes Pfizer, which is continuing to do battle in a New Jersey federal court with most of the leading drug store chains (CVS, Rite-Aid and Walgreens) and a “direct purchaser class” that are claiming that Pfizer’s Warner-Lambert unit violated the antitrust laws and overcharged them for Neurontin® through off-label marketing and sham patents. (See In Re Neurontin Antitrust Litigation, MDL No. 1479, D.N.J. No. 02-1390 (FSH)).
While $491 million in fines and penalties related to Wyeth’s off-label promotion of Rapamune® is a heavy hit even for a company the size of Pfizer — which is already operating under a 2009 corporate integrity agreement with the Department of Health and Human Services (“HHS”) (click on the link to read the 2009 Pfizer Corporate Integrity Agreement with HHS) — this latest prosecution and settlement is yet more proof that Caronia is shrinking by the day in the Government’s rear-view mirror and that pharmaceutical and medical device companies will continue to get battered for off-label promotion. As I noted in a recent Law 360 article looking back on the impact of the Supreme Court’s decision in Sorrell v IMS Health, which the Caronia majority cited extensively in vacating the former Orphan Medical sales rep’s off-label criminal conviction on First Amendment grounds (click “High Court’s Sorrell Ruling Yet To Transform Drug Marketing“ if you have a Law 360 subscription), for big, publicly traded pharmaceutical companies there is no free speech right when it comes to off-label use; only big fines. In short, it’s business as usual for the Feds.