Crime does pay for drug companies

August 18, 2004

Two things to keep in mind as you read this.

1. Temporal lobe partial seizures can look very much like bipolar

disorder. TLS will be made worse by many bipolar meds but might be

controlled by anticonvulsants, which Neurontin is.

2. Neurontin is known to cause sever behavioral side effects in

children who take it for seizure control (and bipolar disorder).

http://www.usatoday.com/money/industries/health/drugs/2004-08-16-neuro

ntin-cover_x.htm

Drugmaker admitted fraud, but sales flourish

By Schmit, USA TODAY

What happens to drug companies that commit federal crimes? For the

nation's No. 1 drug company, the answer is: some pain, more gain.

In mid-May, Pfizer's (PFE) Warner-Lambert division pleaded guilty to

illegally marketing a drug called Neurontin to treat ailments for

which it was not approved. Pfizer, which did not own Warner-Lambert

when the government said the wrongdoing happened, paid a $430 million

fine to settle charges that included defrauding Medicaid.

Pfizer's confession that the success of one of its top drugs was built

partly on fraud may have been humbling, but it isn't hurting the

bottom line. Neurontin sales last quarter rose 32% from a year ago,

and 2004 sales should pass last year's $2.7 billion. With few

exceptions, state Medicaid programs pay for Neurontin just as before

and so do major insurers. (Related story: Pfizer poised to fight off

generics with new drug)

The tale of Neurontin shows how hard it is to stop the momentum of a

blockbuster drug, absent evidence that it is unsafe, and to control

health care costs.

" They (Warner-Lambert) made their money, and they got off cheap, " says

Larry Sasich, a doctor of pharmacy at the consumer-oriented Public

Citizen Health Research Group based in Washington, D.C. Without

prosecution of Warner-Lambert executives, he says, the $430 million

fine is an inexpensive " cost of doing business. " (Related story:

Whistle-blower started scrutiny)

In addition to the fine, Pfizer agreed to tighter rules to ensure

compliance with drug-marketing laws. It will also contribute millions

of dollars to states to educate doctors about Neurontin.

Approved for two conditions

Warner-Lambert's offense was marketing Neurontin to doctors for

purposes other than as a supplemental anti-seizure medication for

epileptics. That was the only use approved by the Food and Drug

Administration during Neurontin's early years, when prosecutors say

Warner-Lambert's illegal marketing took place.

In 2002, the FDA said Neurontin also could be used for nerve pain

related to shingles.

Doctors can prescribe FDA-approved drugs for other purposes, so-called

off-label uses. But federal law forbids pharmaceutical companies to

market drugs for treatments not FDA-approved.

The Justice Department says that's what Warner-Lambert did from

shortly after introducing Neurontin in 1994 until 2000. Prosecutors

alleged that Warner-Lambert lied to doctors about the drug's

effectiveness, paid doctors to allow a sales representative to sit in

on sessions with patients and paid doctors, some up to $250,000, to

unethically talk up Neurontin to other doctors.

In fact, the list of ailments that Warner-Lambert claimed Neurontin

alleviated was so long — covering pain, headaches, bipolar disorder,

attention deficit disorder, alcohol detoxification — that some

Warner-Lambert employees dubbed it the " snake oil " list, government

documents say.

The strategy worked. In 2002, 94% of Neurontin's sales were for

off-label uses, up from 40% in 1995, the government estimates, citing

company documents and independent market research. Wall Street firm

Lehman Bros. estimates that 90% of Neurontin sales are currently

off-label.

Doctors consider the drug relatively safe with few side effects. But

prosecutors said Warner-Lambert's actions caused Medicaid to pay for

prescriptions it should not have. They also said patients could have

been harmed by taking a drug not proved safe and effective for their

condition.

" The aggressive marketing campaign by Warner-Lambert resulted in real

increased costs to the states, insurers and consumers, " Vermont

Attorney General Sorrell said the day of the settlement. He

noted a 30-day supply of Neurontin at a common dose costs $205.

Angry at the company

Steve Borcherding, 42, is a former Neurontin user. The father of three

runs a home-repair business in Portland, Ore. He has bipolar disorder,

an illness often called manic depression. People who have the disorder

often cycle from euphoria to deep depression. Borcherding has hit

psychotic states. If not on medication, he says, he might do things

such as try to drive through a brick wall because he believes he'll

pass through.

In 2001, his psychiatrist suggested he try Neurontin. He knew it

wasn't FDA-approved for his illness. That didn't worry him, because

many drugs for his condition are not FDA-approved.

He says he didn't know that two studies published in 2000 — including

one sponsored partly by Warner-Lambert — had shown Neurontin was no

more effective than a placebo for his disorder.

He says he began taking Neurontin along with another drug he'd been

taking before. His wife, Karla Wolf, says Neurontin didn't seem to

make a difference for her husband at first. She recalls his mania then

increased, and he was hospitalized for five days.

Borcherding was then taken off Neurontin.

He isn't suing anyone. Since the government's settlement, the New

York-based law firm of Finkelstein & Partners has filed at least five

lawsuits alleging Neurontin caused suicides or attempted suicides.

Borcherding says there's no way to prove that Neurontin caused his

downward spiral. He'd had similar spirals before taking Neurontin and

had been hospitalized while on other drugs.

He considers drug researchers " heroes " and trusts the doctor who

prescribed Neurontin for him.

But he's angry at the company's promotion of the drug for his illness.

" They had the data that this was not an effective drug, and they

ignored that data, " he says. " I really have faith in the scientific

process and Western medicine and empirical evidence, and they hijacked

that process. They betrayed it. "

Pfizer says that the company will vigorously defend itself against all

lawsuits and that it knows of no individual harmed by Neurontin. It

also says that many drugs are used off-label, including cancer drugs,

and that the government did not allege illegal conduct after Pfizer

bought Warner-Lambert in 2000.

As part of the settlement, Warner-Lambert pleaded guilty to conduct

before Aug. 21, 1996, only, even though prosecutors alleged illegal

actions occurred later, too. The settlement made it possible for the

company to continue to participate in federal health care programs

such as Medicaid, despite an Aug. 21, 1996, health care fraud law that

might have led to its exclusion. Pfizer would not make an executive

available to be interviewed for this story.

Used by millions

Almost 12 million people have used Neurontin since 1994, Pfizer says.

Sixty countries allow it to treat pain. Even though the U.S. has

approved it for only two conditions, Neurontin's popularity has

snowballed. For the past three years, it has been the third-biggest

drug cost for Oregon's Medicaid program. That occurred despite a lack

of strong scientific support for its off-label uses.

In 2003, the Journal of Managed Care Pharmacy published a literature

review of Neurontin studies. The author, Mack, a doctor of

pharmacy, concluded Neurontin was not the " optimal " treatment for the

majority of off-label uses except nerve pain related to diabetes and

for frequent migraines.

One rigorous study published in 2002 dubbed it an expensive

anti-migraine option: $138 per migraine prevented.

Assistant U.S. Attorney Kanwit in Boston, one of the chief

prosecutors on the Neurontin case, says his biggest hope is that the

case changes drug industry marketing practices.

As far as affecting Neurontin's momentum, Kanwit acknowledges the case

may have little impact. Among the reasons:

•Insurers have a hard time controlling drug prescriptions. Insurance

companies and Medicaid programs can require doctors to get their

approval before prescribing a specific drug. But it's rarely done with

Neurontin, even though the allegations about fraudulent marketing

became public in 2000.

Only four of 50 state Medicaid programs require preapproval of

Neurontin prescriptions, USA TODAY found when it surveyed all of them

after Pfizer's government settlement. Among major health insurers,

only Aetna says it's considering preapproval.

Preapproval can hurt sales. Florida expects its July 1 decision to

require preapproval for Neurontin will save more than $7 million in

its $2.1 billion Medicaid drug program. Neurontin prescriptions in

Maine's Medicaid program dropped 19% — despite a 9% increase in

eligible Medicaid clients — after preapproval took hold in October.

Massachusetts and Oregon also started requiring preapproval last year.

Other states and insurers are wary because restricting Neurontin's

availability could hurt consumers who really need it. Preapproval

rules are also costly and time consuming to administer. What's more,

lower-cost generic competitors may become available in the USA as soon

as next year. To require preapproval for Neurontin prescriptions now

may cost more than it saves, says Seidman, chief pharmacy

officer for WellPoint Health Networks, parent of Blue Cross of

California.

" We have to make sure the payoff is worth the hassle factor, " agrees

Nesser, pharmacy director of the Oklahoma Health Care Authority.

The authority decided it wasn't in 2002 after its own study suggested

that fewer than 10% of its clients on Neurontin suffered from epilepsy

or shingles, Neurontin's two FDA-approved uses. " You don't want to put

a roadblock on an epilepsy drug, " Nesser says.

Oklahoma's Neurontin costs surpassed $5 million in 2003, up from $4.2

million the year before.

•Medicaid laws fuel off-label prescribing. To ensure that Medicaid

patients had good access to drugs, Congress in the early 1990s decreed

Medicaid should pay for a drug for a use that is FDA-approved or

supported by citations in one of three medical directories.

One directory, Drugdex Information System, owned by Canada's Thomson

Corp., says Neurontin is effective or possibly effective in treating

46 ailments. Often, that judgment is based on case studies of a small

number of patients or studies in which patients knew they were taking

the drug, which can skew results. The FDA requires more rigorous

testing for approval.

The other directories cite Neurontin for FDA-approved conditions and

six pain conditions.

Nicotine withdrawal is one condition Drugdex says Neurontin is

" possibly effective " in treating. That is based on the 2001 case of a

54-year-old man who had also been alcohol-dependent and who was being

treated for depression. While on a daily dosage of 2,400 milligrams a

day, costing about $8 to $12 a day based on today's online prices, he

abstained from nicotine for 10 weeks. The study's author suggested

further study.

Medicaid could refuse to pay for Neurontin for nicotine withdrawal,

says Barbara Dean, head of Texas' Medicaid drug program. But it " would

be taking its chances, " she says, because drug companies can argue

that Medicaid laws stipulate it pay.

Drugdex editor Soares says Drugdex hasn't changed its criteria

for what it includes in decades. Drugdex became one of the three

directories in 1997. " I realize there's implications for (Medicaid)

reimbursements, " he says.

But Drugdex's No. 1 goal is to inform pharmacists and doctors about a

drug's use and how it works, he says. The nicotine study was published

in a reputable medical journal, and Drugdex's review board, which

includes doctors, included it because " people might be talking about

it. " Drugdex notes support for Neurontin for nicotine withdrawal is

poorly documented.

•Doctors want to help patients. They'll try drugs if they think they

might work, even if the FDA hasn't sanctioned them for a particular

treatment.

Jim Moorman, CEO of Taxpayers Against Fraud, spends his life working

on ways to reduce fraud, thus taxes. He applauds the Justice

Department's action against Pfizer.

Yet he also takes Neurontin because " it seems to work " in alleviating

his restless-leg syndrome. Neurontin is not FDA-approved to treat RLS,

in which legs inadvertently jerk. No drugs are, but there is some

evidence that Neurontin can help RLS patients.

" Let's recognize this: There are off-label uses for Neurontin that are

valid, " Moorman says. " But (Warner's) marketing department didn't care

if the uses were valid or not. "

Turek, medical director of the Oregon Health Plan, also says a

drug that may not work for many may work for an individual, even if it

has only a placebo effect.

Should onus be on doctors?

Despite Pfizer's fraud settlement, psychiatrist Suzanne Vogel-Scibilia

remains sold on Neurontin. She has 1,000 patients in her Pennsylvania

practice. A board member for the National Alliance for the Mentally

Ill, she says the bipolar studies on Neurontin are not exhaustive

enough.

She prescribes Neurontin, always with another drug, to ease anxiety

and sleep disorders in mild bipolar cases. As a bipolar patient, she

takes it, too. " As a doctor, I want the freedom to prescribe what I

think works, " she says.

She says doctors should check the validity of drug studies and decide

prescriptions case by case.

But Jerome Avorn, author of an upcoming book, Powerful Medicines, says

time-pressed doctors turn most often to drug representatives for drug

information. Avorn, a doctor with Harvard Medical School and Brigham

and Women's Hospital, also says doctors too often attempt to learn

whether a drug works for a patient by trying it. " We ought to have a

better system than that. " He advocates more studies and easier access

to data.

Even Oregon, with new preapproval rules, will continue to pay for

Neurontin for existing bipolar users. " It doesn't fit with the science

.... but people aren't machines, so we have to use some of the art (of

medicine) as well as the science, " Turek says.

Janet Marquez, 25, doesn't pay much mind to studies. She looks at her

life. Several years ago, Marquez spent four months in a psychiatric

hospital. Diagnosed as bipolar, she tried other drugs. They didn't

work, she says. About four years ago, she started Neurontin. She's now

in college, living on her own and volunteering at a local library.

When Oregon last year threatened not to pay for her Neurontin, her

doctor wrote a letter for her.

Oregon still pays for Marquez's Neurontin. " If it doesn't work, then

why do I feel better? " she says.

Contributing: Darryl Haralson, Ankner

Boxed addition to the article:

Other drug penalties

Other government civil and criminal settlements involving drug

companies:

Schering-Plough in July agreed to pay $345 million to settle charges

that it didn't give Medicaid its best price for the allergy drug

Claritin.

AstraZeneca Pharmaceuticals in 2003 paid $355 million to settle

charges that it gave doctors kickbacks by providing free samples of

its prostate drug Zoladex knowing that they would bill Medicaid and

Medicare.

Bayer in 2003 paid $257 million to settle charges that it concealed

some drug discounts to avoid paying Medicaid enough in rebates.

TAP Pharmaceuticals in 2001 paid $875 million to settle charges

similar to AstraZeneca's involving its prostate cancer drug Lupron.

By Schmit

August 18, 2004