Research and Marketing of Drugs: a Challenge-Part II
See Part I of this article: Prescription Drugs and the
Cost of Advertising Them-Part I
Also to see about the new proposal from the FDA about off-label drug and medical equipment usage please see our article: The Food and Drug Administration-FDA .
(11/7/13)- Johnson & Johnson has agreed to pay more than $2.2 billion in criminal and civil fines to settle accusations that it improperly promoted the antipsychotic drug Risperdal to older adults, children and people with developmental disabilities, according to an announcement from the Justice Department. For more information on this case please refer to our earlier items dated5/16/13, 9/2/12 and 7/24/12.
Last year, GlaxoSmithKline PLC agreed to plead guilty to criminal charges involving the antidepressant Paxil, the diabetes drug Avandia and Wellbutrin. Pfizer Inc. agreed to pay $2.3 billion in 2009, to resolve a drug promotion investigation.
This settlement is the 3rd largest pharmaceutical settlement in United States history, but since no individual in the company is being punished, it is not too far-fetched to say that even bigger settlements will lie down the road.
The settlement will require the approval of a federal judge before the matter can be resolved. As we noted in our items below, there were two other J&J drugs involved in this case, namely the heart-failure drug Natrecor and Invega, an antipsychotic drug.
As part of the settlement J&J has agreed to plead guilty to a criminal misdemeanor, acknowledging that it improperly marketed Risperdal to older adults for unapproved uses. It did not admit to wrongdoing for the civil portion of the settlement which involves claims that the company promoted the drug’s use in children and the developmentally disabled, as well as accusations that it paid kickbacks to doctors and pharmacists in exchange for writing more prescriptions.
The company will pay criminal fines and forfeitures of $480 million and civil penalties of $1.72 billion. The civil settlement resolves similar accusations brought by 45 states. The company also agreed to upgrade its compliance practices and submit to five years monitoring by the Department of Health and Human Services’ Office of the Inspector General.
In 2004 Risperdal had about $3.1 billion in sales, which accounted for almost 5% of J&J’s total revenue that year, according to the company’s filing. In 2007, Risperdal accounted for sales of about $2.2 billion, the year before it lost patent protection.
(8/1/13)- The Justice Department announced that it had settled its illegal marketing of a drug case, with Pfizer Inc. being the culprit. Pfizer agreed to pay $491 million to settle criminal and civil charges over its illegal marketing of its kidney-transplant drug Rapamune.
The case centered on the sales practices of Wyeth Pharmaceuticals, which Pfizer acquired in 2009.
Rapamune was approved by the Food and Drug Administration in 1999 for use in patients receiving a kidney transplant. Pfizer was accused of aggressively promoting the drug for use in patients receiving other organ transplants.
The illegal sales practices became public in 2010 as a result of the unsealing of the papers in a whistle-blower suit filed by two former employees of Wyeth.
The settlement also resolves a second whistle blower suit and includes a criminal fine and forfeiture of $233.5 million, and a civil settlement of $257.4 million with the federal government, all 50 states and the District of Columbia
(5/16/13)- In our item dated 9/12/12 below, we wrote about the fact that Johnson & Johnson and the government were close to settling the Justice Department's allegation that the company had illegally promoted drugs, including Risperdal, for off-label usage.
The Wall Street Journal reported that the settlement agreement is now in doubt because J & J objects to the part of the settlement that deals with the drug's usage for children and adolescents.
(2/16/13)- Merck & Co. announced that it had agreed to settle lawsuits for a total of $688 million that claimed it had delayed releasing the results of an unfavorable study of its cholesterol drug Vytorin. Vytorin had been co-marketed by Merck and Schering Plough. Merck and Schering merged in 2009. Investors had filed 2 lawsuits in which the plaintiffs alleged that the companies had concealed the data from the study from investors for over a 2 year period of time.
Under the terms of the settlement Merck will pay $215 million to resolve the class action suit against it, and $473 million to resolve the suit against Schering. The attorneys for the plaintiffs asserted that the settlement with Schering was the largest ever in a securities class action against a drug company.
Vytorin, which is also known as Zetia garnered $5 billion in sales in 2007, while the 2 drugs brought in a total of $4.4 billion in 2012. A jury trial was scheduled to begin in March. The drug study in question was known as the Enhance study. The companies paid $41.5 million to settle class-action lawsuits from consumers and insurers in 2009, over the same issue. They also paid $5.4 million to state attorneys general investigating consumer protection cases involving Vytorin and Zetia. Please see our item dated 7/21/09 below.
(1/27/13)- The Food and Drug Administration (FDA) said it would not appeal the decision from the 2nd Circuit Court of Appeals in New York, as we discussed in our item dated 12/17/13 below, in the case of the U.S. v Caronia. Mr. Caronia's conviction was overturned by the Appellate Court.
Mr.Caronia was convicted in 2009, when he was a pharmaceutical salesman for Orphan Medical, a company that was later acquired by Jazz Pharmaceutical Inc. for marketing the narcolepsy drug Zyren for treating drowsiness and chronic fatigue, even though the drug was never approved by the FDA for those purposes.
The 2nd Circuit Court ruled that his actions were protected by the First Amendment and its guarantee of free speech
(1/1/03)- Hardly a week goes bye without a pharmaceutical company settling a marketing action against it for promoting the off-label usage of a drug. The fines are huge but the companies continue to go their merry way and continue to do the illegal marketing just as if nothing happened.
The latest example of this practice is Amgen paying $762 million in total fines for the promoting the use of its biotech drug Aranesp to treat anemia in cancer patients who were undergoing chemotherapy, even though it was not approved for those not undergoing therapy. A study by Amgen showed that the drug actually increased the risk of death for those taking the medication who were not undergoing chemo.
The federal charges in the case, which was helped by 11 different whistle blowers who will receive rewards based on the settlement, alleged that the company pushed larger but less frequent injections of Aranesp than stated on the label as a way of making the drug more attractive than Procrit, a rival anemia drug from Johnson & Johnson.
Amgen agreed to pay $136 million in criminal fines and forfeit $14 million, with about $612 million going to settle civil litigation. The guilty pleas was made to a misdemeanor charge, so that the company can continue to deal with Medicare.
It also agreed to sign a corporate integrity agreement that requires the executives and board members of Amgen to personally certify compliance with all regulations. The proceedings were held before Sterling Johnson Jr. of the United States District Court in Brooklyn.
(12/17/12)- The drug companies may win a second major victory when an appeals court in San Francisco rules on the conviction of a drug company official for fraudulently promoting a medication for an unapproved treatment should be overturned as a violation of the First Amendments free-speech rights.
Former InterMune Inc.Chief Executive W. Scott Harkonen had appealed a 2009 wire fraud conviction for a news release that promoted the survival benefits of Actimmune, made to treat fatal lung disease. The Ninth Circuit U.S.Court of Appeals in San Francisco is hearing this case.
In an earlier decision from the Second Circuit of Court Appeals in New York, the conviction of a drug salesman for marketing drug for uses unapproved by the FDA was reversed because of the fact that his actions were protected by the First Amendment and its guarantee of free speech.
FDA regulations forbid drug companies from marketing drugs for off-label purposes. As pointed out in this article the agency has won billions of dollars in settlements with the pharmaceutical industry for violations of this regulation.
The ruling from the 2nd Circuit, which voted 2 to 1 to reverse the conviction of Alfred Caronia, a former sales representative for Orphan Medical, which was later acquired by Jazz Pharmaceutical. Mr.Caronia was selling Xyren, a drug approved for excessive daytime sleepiness, for insomnia, fibromyalgia and other conditions. He was caught on tape selling the drug for the unapproved usage to a doctor who was a government informer. A jury convicted Mr.Caronia in 2008.
The appellate court upheld his argument that his right to free speech was violated. The court citing as precedent a Vermont case ( Sorrell vs. IMS Health) wherein the Supreme Court in 2011 overturned the state's law that restricted drug companies from using prescription data for marketing purposes.
"The government clearly prosecuted Caronia for his words-for his speech." The majority wrote that "the government cannot prosecute pharmaceutical manufacturers and their representatives under the F.D.C.A for speech promoting the lawful, off-label use of an FDA approved drug."
The lone dissenter in the case was Judge Debra Ann Livingston.
(12/15/12)- Pfizer Inc. agreed to pay a combined $42.9 million to North Carolina and 32 and other states to settle allegations that the company used unfair deceptive practices in the marketing of a antibiotic Zyvox and nerve-pain medicine Lyrica.
The states had alleged that Pfizer had marketed Zyvox as superior to another antibiotic in fighting certain types of infections, though there wasn't substantial evidence to support the claim.The states alleged that Pfizer knowingly marketed Lyrica for off-label useage.
(10/9/12)- A federal court in Virginia ordered Abbott Laboratories to pay $700 million as part of a previously announced $1.6 billion for the illegal marketing of its anti-seizure medication Depakote.. We wrote about this matter in our item dated 5/9/12 below.
Abbott was ordered to pay a criminal fine of $500 million. It was also ordered to pay $1.5 million to the Virginia Medicaid Fraud Control Unit for marketing the drug for patients with dementia and schizophrenia even though the medication had not been approved for those uses.
Abbott had admitted that from January 1998 to December 2006 it marketed the drug for behavioral disturbance, and from January 2002 to December 2006, it marketed it to treat schizophrenia even though the drug had not been granted approval for those purposes.
The company will be subject to a five-year term of probation. Abbott pleaded guilty in May to a criminal misdemeanor charge for misbranding the drug.
(9/2/12)- In our item dated 7/24/12 below we wrote about the fact that Johnson & Johnson and federal officials were close to arriving at a settlement for the illegal marketing of its anti-psychotic drug Risperdal. On Friday the company announced that it Jansen pharmaceutical unit had reached a consumer fraud settlement for $181 million with 36 states and the District of Columbia over the marketing of Risperdal.
State officials said Jansen promoted the drug for uses that it did not have approval for, including dementia in elderly patients, bipolar disorder in children and adolescents, depression and anxiety.
A judge in Arkansas had ordered the company to pay more than $1.2 billion in fines in April, and last year a South Carolina judge levied civil penalties of $227 million for the illegal marketing of Risperdal.
(8/9/12)- Back in 2007, three former Purdue Pharma LP executives pleaded guilty to misleading the public about the painkiller CxyContin's safety. The executives were assessed a fine, and in addition, the Department of Health and Human Services barred them from doing business with the government for 12 years.
The Purdue executives took the matter to the courts, arguing that the HHS had no authority to impose the extra punishment on them.
The U.S. Court of Appeals for the District of Columbia Circuit ruled 2 to 1 that such a penalty was within the government's powers. The court did however send the matter back to HHS to look at the 12 year length of time as the penalty.
(7/24/12)- Johnson & Johnson and federal officials are close to arriving at a settlement of the company's illegal marketing of its anti-psychotic drug Risperdal that will total $2.2 billion and include $400 million in criminal penalties according to individuals familiar with the matter. For more information on this issue please refer to our item dated 4/15/12 below. The company will also sign a 5 -year "corporate integrity" agreement.
The settlement would allow J&J to sell its products to government health programs like Medicare, and resolve some other lingering federal investigations even though a criminal fine will also be assessed against the company. Usually, when a criminal penalty is imposed, the defendant can not do business with the government for a number of years.
The final sum will depend on which states suing J&J sign on to the agreement.
Risperdal had been J&J's top-selling drug with $2.2 billion in sales in 2007, the year before it lost patent protection in the U.S.
The settlement would also resolve investigations into the promotion of Invega, another of the company's anti-psychotic drugs, and the heart-failure drug Natrecor, as well as a probe into whether the company paid tens of millions of dollars in kickbacks to the nursing-home pharmacy operator Ominicare Inc. to boost sales of certain of its other medications to nursing home patients
(7/7/12)- In a pleasant surprise from what has gone on in the past, the British pharmaceutical company GlaxoSmithKline agreed to plead guilty to criminal charges of illegally marketing drugs and withholding safety data from U.S. regulators, and also to pay $3 billion in fines to both the federal and state governments.
The federal government and state attorney generals have been negotiating with the company for almost a year in connection with the terms of the settlement.
The deal will require approval from the federal court in Boston, Mass., and will also require the company to enter into a five-year "corporate integrity agreement". The government's case was based partially on a lawsuit brought by former Glaxo employees in the federal court in Boston in 2003 under the False Claims Act which dates back to 1863.
Four former Glaxo employees will participate as "whistle blowers" in sharing part of the settlement. Paxil, which brought in $11.6 billion in sales to the company, Wellbutrin, which brought in $5.9 billion in sales to the company and Avandia, which brought in $10.4 billion in sales during the period of time in question, are the 3 drugs that formed the basis for the complaint. Illegal marketing of 6 other drugs were involved in the case also.
The settlement was Glaxo's fourth within the last several years. For additional information on this matter please see our item dated 9/11/11 below
The $3 billion settlement represents a new high for the illegal marketing of drugs, but just as this article has continued to point out, it is only a matter of time before this record will also be broken.
The criminal fine was for $1 billion and the civil fine was for the other $2 billion.
(5/9/12)- Ho hum, what else is new? Continuing in the long line of drug companies settling governmental actions against a drug company for the illegal marketing of one of its drugs, Abbott Laboratories and the Justice Department, along with 49 of the states Attorney-Generals, have reached an agreement totaling $1.6 billion for the illegal marketing of its anti-seizure drug Depokote.
As we discussed in several of our items this is one more example of a drug company settling a false marketing action by paying a huge fine, and no one goes to jail for these illegal actions.
The British drug company GlaxoSmithKline, so far has the record for a settlement with the government at $3 billion for the illegal marketing of several of its drugs, with the main one in that case being the diabetes drug Avandia.
Pfizer paid $2.3 billion in 2009 to settle the government's case against it for the illegal marketing of its painkiller Bextra. Just read this article and you will see how the drug companies pay huge fines for improper marketing practices and then continue to do the same illegal selling of another of its drugs.
In the case of Abbott and Depokote, the company marketed the drug for schizophrenia and agitated dementia, especially in nursing homes, even though the drug had been approved by the FDA for the treatment of seizure disorders, or mania associated with bipolar disorder.
As part of the agreement, Abbott said it would pay $800 million to resolve civil cases brought by federal and state authorities, $700 million in criminal penalties and $100 million to states in connection with consumer protection matters.
The company will also plead guilty to one misdemeanor charge of misbranding for violating the Food, Drug and Cosmetic Act.
Meredith McCoyd, a former Abbott
sales rep, who was the lead whistle blower in the case was represented
in the case by Reuben Guttman Esq. will share $84
million in federal rewards, and $22 million for state level claims with her 3
other whistle blowing colleagues.
(4/15/12)- The saga of Johnson & Johnson and its anti-psychotic drug Risperdal continues. To see some additional information on this topic, please see our items dated 3/24/12 and 1/24/12 below. The most recent development in this matter is that an Arkansas judge has ordered the company to pay $1.2 billion, after a state court jury found that the company had violated the state's consumer protection laws, and had improperly marketed the drug.
J&J said that it would appeal the judge's ruling if its motion for a new trial is denied.
There are still several other states suing J&J for reimbursement of Medicaid payments for Risperdal prescriptions written for unapproved uses of the drug, as well as for treating its residents for adverse reactions to Risperdal.
The state of Arkansas filed the lawsuit against J&J in 2007, alleging that the company had failed to disclose information about risks associated with the drug's usage, such as treating dementia in the elderly, and for imporper marketing of the drug.
The jury found that J&J was guilty of violating the Arkansas Medicaid fraud false claims act and deceptive practices.
State Judge Tim Fox assessed the penalty based on the nearly 239,000 Medicaid prescriptions for Risperdal that were submitted for Arkansas Medicaid reimbursement between late- 2002 and mid-2006. Judge Fox assessed a $5,000 penalty for each prescription.
The rest of the penalty arose from alleged violations of the deceptive trade practice law. In 2003, J&J sent letters to about 4,570 Arkansas health-care providers regarding the risk of increased blood sugar associated with Risperdal, which the state argued was insufficient warnings of the risk. Judge Fox assessed a $2,500 penalty for each of the letters.
(3/24/12)- Federal officials in Washington have rejected a proposed settlement of almost $1 billion over the false marketing by J&J of its anti-psychotic drug Risperdal. Please note in our item dated 1/24/13 below, the company and Texas officials agreed to settle the matter, but we noted that the federal matter was still pending.
Federal prosecutors have been investigating Risperdal marketing by J&J's Jansen Pharmaceutical unit. The company and federal prosecutors in Philadelphia had reached a tentative settlement about two months ago, but officials at the Justice Department in Washington have rejected the proposed settlement saying that it was inadequate.
It is thought that the Washington officials are looking for a settlement in the neighborhood of $1.4 billion, which was the amount that Eli Lilly & Co., agreed to in 2009 to resolve allegations it had improperly promoted its anti-psychotic medication Zyprexa
(1/24/12)- Almost no month goes bye without one of the drug companies settling a "false and misleading ad "suit for a medication that has been improperly marketed. The latest culprit is Johnson & Johnson which agreed to pay $158 million to settle a Texas lawsuit alleging the company's improper marketing of the anti-psychotic drug Risperdal.
Last year, a South Carolina judge ordered J&J to pay $327.1 million after a jury found that the Jansen unit of the company violated the state's unfair trade-practice law in the marketing of Risiperdal. In 2010 a Louisiana jury ordered J&J to pay $257.7 in a Risperdal case. The company is appealing both these rulings.
J&J also has an agreement in principle to plead guilty to a misdemeanor violation of a federal law in connection with a Justice Department investigation of its Risperdal marketing practices. It is in talks to settle civil allegations in connection with the federal case, which could result in additional payouts.
(11/30/11)- GlaxoSmithKline PLC still holds the record for the biggest fine to settle a criminal and civil lawsuit against it for the marketing and sales of a drug, but in agreeing to pay a total of $950 million in fines for illegal practices involving its best selling pain-killing medication Vioxx, Merck showed that it is a force to be reckoned with in this area of illegality also.
Merck voluntarily withdrew the drug from the market in 2004, but it has paid a total of nearly $6 billion in litigation settlements so far, not including legal defense costs and possible payments from pending litigation.
By the time Merck withdrew the drug from the market over 25 million Americans had used the drug. The company had taken a $950 million charge against earnings in October 2010 against the possibility of settling the seven-year investigation by the U.S. attorney's office in Massachusetts.
The company agreed to pay a $321 million criminal fine and plead guilty to one misdemeanor count of illegally introducing a drug in interstate commerce. This charge arose from Merck's promotion of Vioxx to treat rheumatoid arthritis before the FDA had approved it for the purpose in 2002.
Merck is also paying $426 million to the federal government and $202 million to 43 states and the District of Columbia Medicaid agencies to settle civil claims that its illegal marketing caused doctors to prescribe and bill the government for Vioxx that they otherwise would not have prescribed. Several states did not participate in the settlement and litigation remains outstanding.
In 2007, Merck agreed to pay $4.85 billion to settle 27,000 lawsuits by people who had claimed they or their relatives had suffered injury or death after having taken Vioxx. The company also signed a corporate integrity agreement in connection with the settlement, promising to monitor future promotional activity and report back regularly to the government.
The drug was initially approved in 1999 to treat certain types of pain.
No individual was held responsible for Merck's illegal activities.
(11/9/11)- As has often been stated by many observers of the financial scene, a billion dollars here and a billion dollars there is liable to add up to a lot of money. Maybe that is true for the rest of us, but it seems to not be true for the drug industry. Back on January of 2009 Eli Lilly & Co. paid $1.4 billion to settle a Justice Department suit against it for the illegal marketing of its drug Zyprexia, as we noted in our item dated 1/27/09 below.
Then along came Pfizer & Co. in February 2009 in paying $2.3 billion to settle a lawsuit brought against it by the Justice Department for the illegal marketing of its painkiller medication Bextra, as we noted in our item dated 2/9/09 below.
Now along comes GlaxoSmithKline PLC, the British drug company which agreed to settle a Justice Department criminal and a civil suit against it for $3 billion for the illegal marketing of several of its drugs and also for Medicaid and Medicare fraud.
The company had already set aside $4.6 billion to cover this settlement and several other pending matters. The final terms of the settlement have not been completed yet, but the fine will be paid sometime next year.
Glaxo said the settlement relates in part to an eight-year-old probe of its marketing of the antidepressants Paxil and Wellbutrin that began in the U.S. attorney's office in Colorado before being moved to the U.S. attorney's office in Massachusetts.
The company had also been subpoenaed in connection with the marketing of Avandia, a diabetes drug that was once the company's best selling drug. The FDA had required the company to put tight restrictions on the drug's usage last year, while European regulators ordered Avandia withdrawn from the market.
A Senate Finance Committee report last year accused the company of knowing of the increased risk of cardiovascular problems, which the company suppressed.
A spokesperson for Glaxo said the company was still negotiating with the government over whether to include a corporate integrity agreement in the deal that settled a separate case last year. That deal included the payment of a $150 million criminal penalty in addition to a $600 million penalty to resolve federal complaints about manufacturing quality at a plant in Cidra, P.R., since closed.
(8/27/11)- eMarketer, a digital marketing research firm estimates that online ads for health care and pharmaceutical companies is expected to be $1.6 billion, up 24% from $1.3 billion last year.
(8/20/11)- The Justice Department has issued a subpoena to Merck & Co. as part of a criminal investigation into the marketing of certain drugs.
The drugs are Temador, which treats brain tumors; PegIntron for hepatitis C treatment and Intron A, which treats certain cancers and other conditions.
The government is seeking information about the marketing and selling activities for these drugs from 2004 to the present. During most of that period of time the drugs were marketed by Schering Plough, which Merck acquired in 2009.
(8/15/11)- The Department of Health and Human Services (HHS) notified Howard Solomon, the chief executive officer of Forest Laboratories Inc. that it was dropping its efforts to force his resignation from Forest Laboratories Inc. as we discussed in our item dated 4/27/11 below.
The company had pleaded guilty to misdemeanors involving marketing of its drugs, including the antidepressant Celexa, and it paid $313 million to resolve the matter.
Mr. Solomon was not personally accused of any wrongdoing. He was however notified that the government was considering excluding him form jobs at health care companies that sell to the U.S. government.
It invoked a little-used clause in the Social Security Act that allows such an action against corporate leaders of companies found guilty of criminal misconduct, even if the leaders had no knowledge of the misconduct.
(7/8/11)- By a 6-3 vote by the U.S. Supreme Court in the case of Sorrell v. IMS Health Inc., the Vermont law restricting prescription drug data-mining companies from selling their information to drug "mining" companies was declared illegal.
Pharmacies sell records of their customers to these data-mining companies, who in turn sell that data to drug companies to be used to contact medical professionals to try and increase sales of their own products.
Justice Arthur M.Kennedy, in writing the opinion for the majority stated that the law was an affront to the First Amendment in that it "disfavors specific speakers, namely pharmaceutical manufacturers," .
(5/19/11)- Federal prosecutors in Philadelphia and Washington, D.C. have been investigating Johnson & Johnson's Janssen Pharmaceutical unit in connection with a whistle blower's lawsuit for the improper marketing of its antipsychotic drug Risperdal.
Risperdal has been one of J&J's top selling drugs, with more than $2.2 billion in sales in the U.S. in 2007, before the U.S. patent expired.
J&J noted in a regulatory filing that it had set aside an unspecified amount of money for a potential settlement, and said it would "likely" face civil and criminal litigation if it did not settle
Pharmaceutical companies have paid more than $11 billion for off-label marketing and other whistle-blower fraud cases, according to Taxpayers Against Fraud, an advisory group that tracks these types of litigations.
As we noted in our item dated 4/27/11 drug companies will continue to pursue illegal off-label usage of their drugs in spite of the huge civil fines they incur, unless they are truly punished for their misdeeds with criminal prosecutions.
For those of you who are familiar with nursing homes and the medical staffing therein, one of the greatest concerns is the capability of the medical staff at the facility. Geriatric medicine is a difficult field that is not as lucrative as are some of the other areas of medical care, so the question often arises in regards to the competency of the doctors in nursing homes.
The results of a federal governmental audit of nursing homes conducted by Daniel R. Levinson, inspector general of the Department of Health and Human Services determined that nearly one in seven elderly nursing home residents with dementia were given antipsychotic drugs even though these medications sharply increased the risk of death and have not been approved for this type of treatment.
The auditors found that of the 2.1 million elderly patients in nursing homes during the first six months of 2007, 304,983 had at least one Medicare claim for an antipsychotic medication. Nursing home residents received 20% of the 8.5 million claims for this type of medicine for all Medicare beneficiaries at a cost of $309 million during that 6 months period of time.
The audit found that more than half of the antipsychotics paid for by the Medicare program in the first half of 2007 were "erroneous", costing the program $116 million for those 6 months.
The drugs included in the audit were Risperdal, Zyprexa, Seroquel, Abilify and Geodon which were "potentially lethal" to many of the patients and are illegally being marketed by the drug companies for this "off label" usage.
(5/16/11)- Google Inc disclosed in a regulatory filing that it was setting aside $500 million to settle a U.S. Justice Department criminal investigation into allegations that it had used ads from online pharmacies that break the U.S. laws.
In December 2007 Google, Microsoft and Yahoo Inc. agreed to pay a combined $31.5 million fine to settle civil allegations brought by the Justice Department that they had accepted ads from illegal gambling sites.
The U.S. Attorney's Office in Rhode Island and the Food and Drug Administration have led the investigation. Google's AdWords system offers marketers the chance to bid to display their ads when people searched for certain keywords on its search engine. An advertiser pays when a user clicks on the ad.
Google announced in February 2010 that it would allow only ads from U.S. pharmacies accredited by the National Association of Boards of Pharmacy and from online pharmacies in Canada that are accredited by the Canadian International Pharmacy Association. The investigation centers around the fact that many of the companies using the Google search engine have not been approved by either of these organizations.
It is illegal for a U.S. resident to import prescription medications from Canada even with a legal prescription.
(4/27/11)- Howard Solomon, the chief executive officer of Forest Laboratories Inc. was notified on April 11th, in a letter sent by the inspector general of the Department of Health and Human Services (HHS) that it intends to exclude him from doing business with the federal government.
In bringing this action against the top-level executive of a company could in turn mean that the company is excluded from doing business with Medicare, Medicaid and the Veterans Administration.
As noted in our item dated 9/19/10 below, the action against Forest Labs had been started by a whistle-blower in 2003. In resolving the legal matter as noted in our item, the company pleaded guilty to a criminal felony, as well as to misdemeanors and the payment of a fine. It also agreed to accept corporate governance rules for a five year period of time.
HHS had invoked this little-used administrative policy under the Social Security Act against a pharmaceutical executive only once before. Under the terms of the act, governmental agencies can ban leaders of drug companies for criminal acts of the corporation, even if they knew nothing about the criminal act that had been committed.
Mr. Solomon has not been accused of committing any criminal acts himself.
As we have noted the pharmaceutical companies have paid huge fines over the last few years, but this has not distracted them from continuing to do these illegal acts.
Mr. Solomon has 30 days to ask the inspector general to revoke the move, but if he loses and has to take the case to federal court, he may have to step down from his present position, so that the company could continue to do business with the federal government while the case is pending..
(2/3/11)- Time and time again we have seen the situation where a pharmaceutical company uses a "false and misleading" ad, and when caught doing this illegal act pulls the ad, with only a slap on the wrist from the Food and Drug Administration (FDA) as a penalty.
The latest example of this occurred when the FDA sent a warning letter to Roche's Genentech unit saying a print ad for the bone-building drug Boniva, which featured the actress Sally Fields stated in its text that nine out of ten women on Boniva stopped and reversed bone loss. The ad ran in Parade magazine in December.
The FDA letter stated that the ad overstated the drug's efficacy. The company has agreed to pull the ad, but meanwhile the damage has been done.
(1/24/11)- GlaxoSmithKline PLC announced that it would take a $3.49 billion charge for thee fourth quarter to cover costs related to investigations by the U.S. Justice Department of its marketing practices, as well as additional costs tied to consumer lawsuits over its diabetes drug Avandia.
The company took a 1.57 billion pound charge in the second quarter of 2010 to settle lawsuits involving Avandia and to settle a U.S. government probe of a Glaxo factory in Puerto Rice. For additional details on this latter matter please see our item dated 10/30/10 below.
The latest charge is an indication that the company is close to settling a seven-year-old federal investigation of its marketing practices that had examined Glaxo's promotion of several drugs between 1997 and 2004. That inquiry began at the U.S. attorney's office in Colorado, but is now being handled by the U.S. attorney's office in Massachusetts.
Glaxo took a 278 million-pound charge related to this same investigation in the fourth quarter of 2008. The company has disclosed that investigators examined whether Glaxo promoted Wellburtrin for uses not approved by the FDA.
(12/22/10)- Ring up another settlement for a huge sum of money against a drug company for false and misleading advertisements, including illegal off-label marketing of a drug.
In the latest case, the Irish pharmaceutical company Elan agreed to pay $203.5 million to resolve criminal and civil complaints that it improperly marketed the anti-seizure medication Zonegram for weight loss and mood stabilization. The payment included a $97 million criminal fine.
The Japanese drug maker Eisai also agreed to pay $11 million to resolve a civil case for off-label marketing of Zonegran after it bought rights to the drug from Elan in 2004.
The cases arose from a 2004 whistle-blower suit brought by Dr. Lee R. Chartock, a Massachusetts psychiatrist who said he had been courted by Elan, sent to a conference and asked to prescribe the drug for weight loss. Dr. Chartock will receive more than $10 million from the civil payment as a reward under the federal False Claims Act, which penalizes companies for improper billing to governmental programs.
Elan Pharmaceuticals, the U.S. subsidiary of Elan pleaded guilty to a misdemeanor charge of misbranding in violation foe the federal Food, Drug and Cosmetics Act.
(11/30/10)- Of the $3 billion that the U.S. Justice Department recovered for the federal treasury in fiscal year 2010, about $2.5 billion came from civil settlements and court judgments in health-care fraud and improper marketing cases. The recoveries were up 25% from the $2.4 billion recovered in fiscal year 2009.
The money that is recovered goes to the U.S. Treasury and not the individual agencies such as the Federal Drug Administration.
In many of the cases the government benefited as a result of "whistle blower" suits brought under an old law, the False Claims Act. Recent legislation, including the new financial reform legislation that was passed this year will result in greater encouragement to whistle blowers to bring actions when they become aware of misdeeds by the company for whom he/she is working.
(10/30/10)- Although this series of articles deals with the drug companies, and their marketing of drugs through illegal off-label promotions, and false and misleading ads, GlaxoSmithKline PLC, the British drug manufacturing company made the headlines recently when it agreed to pay a $750 million fine to settle criminal and civil complaints for knowingly selling tainted medications that did not meet quality standards manufactured at its Cidro, Puerto Rico plant.
The U.S. Attorney for Boston,Carmen Ortiz announced the settlement wherein SB Pharmco, a unit of Glaxo agreed to plead guilty to a criminal felony for releasing adulterated drugs into interstate commerce for which it would pay a $150 million fine, including forfeiting assets of $10 million. Glaxo admitted selling 20 drugs manufactured at the plant that were tainted.
A suit filed by Cheryl D. Eckard under the U.S. False Claims Act, a former quality-assurance manager at Glaxo, in 2004, in the federal district court in Boston sparked the investigation. Ms.Eckard's role in the case arose when Glaxo sent her to the Cidra plant, which is south of San Juan, to lead a team of 100 quality experts to fix problems cited by an earlier FDA warning letter.
The plant was the company's premier manufacturing plant, producing $5.5 billion of medications. Although FDA inspectors had spotted some problems, most were missed. Ms.Eckard soon discovered that quality at the plant was a mess. She repeatedly complained to senior managers about the problems, but little was done.
In May 2003, she was terminated as "redundancy" related to the merger of Glaxo Wellcome and SmithKlineBeecham PLC. As a result of her complaints to the FDA the agency began a criminal investigation and used armed federal marshals in 2005 to seize nearly $2 billion worth of drugs, the largest such seizure in history. Eventually Glaxo closed the plant in 2009.
$600 million of the settlement will go to the federal government and
participating states to resolve civil false-claims charges. Ms. Eckard will receive$96 million, for her share as the
whistle blower in the suit, which is one of the highest awards in a health care
Tony West, the assistant attorney general in the Justice Department in charge of the department's civil division said; "We've opened more investigations, we've recovered more taxpayer dollars lost to fraud, we've had more convictions, higher penalties in the last two years than we've had in any other two-year period."
Ms. Eckard will be entitled to further amounts from the state settlements. Her attorney in the case is Neil Getnick Esq.
(9/24/10)- The Patient Protection and Assured Care Act (PPACA) of 2010 strengthened the False Claims Act and increased money for enforcement by the U.S. Justice Department.
In the latest case to come into the headlines, the Justice Department joined 19 states, including New York and two whistle blowers in a lawsuit against Pfizer and Co., and its Wyeth Pharmaceutical subsidiary for the illegal off-label marketing of its drug Rapamune, a drug used to prevent rejection of kidney transplants.
In the case of Rapamune a whistle-blower suit was brought in 2005 against Wyeth which was bought for $68 billion by Pfizer in 2009.
Eli Lilly has paid the largest finet in a false advertising and off-label advertising case, namely $1.4 billion. The False Claims Act allows the government to collect up to three times any amount it was defrauded and pay whistle-bowers 15% to 25% of the total
Two former Wyeth employees, Marlene Sanders and Scott Pariis said they were encouraged to promote Rapamune for heart, lung, liver and pancreas transplants, even though the FDA had only approved the drug for kidney transplants. The Justice Department. in the Bush era, had declined to become a plaintiff in the Rapamune case. Reuben A. Gutman represents the whistle-blowers in the lawsuit, which was filed in the U.S. District Court in Philadelphia.
(9/19/10)- Forest Pharmaceuticals, a unit of Forest Laboratories, agreed to pay more than $313 million to settle criminal and civil complaints against it brought by the office of the U.S attorney in Massachusetts for off-label marketing of its anti-depressant drug Celexa.
The case originated as a result of a whistle-blowers suit against the company in 2003.
One of the criminal charges was for the illegal off-label marketing of Celexa to children and adolescents even though the drug had been approved only for marketing to adults. The company was also charged with making illegal payments to doctors to induce them to prescribe Celexa and Lexapro another antidepressant drug being sold the company.
As part of the criminal settlement, Forest Pharmaceutical, which is based in St. Louis, agreed to plead guilty to one felony count of obstructing justice, since employees of Forest lied to the FDA during a plant inspection in 2003.
The company agreed to plead guilty to two misdemeanor charges, one of which involved the illegal distribution from 2001 to 2003 of an unapproved drug, Levothroid, to treat thyroid deficiency. The criminal settlement calls for the company to pay a $150 million fine and to forfeit an additional $14 million in assets.
Forest will also pay more than $88 million to the federal government and more than $60 million to the states to resolve a civil complaint that its actions caused false claims to be submitted to federal health care programs. Two whistle-blowers will split $14 million from the federal share of the settlement. The criminal resolution is subject to approval by the federal court for the District of Massachusetts.
Forest also agreed to a five-year corporate integrity agreement, requiring it to have an independent expert review the company's compliance with drug marketing regulations
(9/12/10)- A federal appeals court in New York threw out a September 2008 ruling by Judge Jack B. Weinstein of the United States District Court in Brooklyn that allowed the plaintiffs to bring a class-action suit against Eli Lilly & Co. for illegal marketing of Zyprexa, its schizophrenia drug.
The plaintiffs are seeking $6.8 billion in damages against the company for the illegal marketing that caused the price of the drug to be inflated.
The appeals court reversed the decision, finding that the link between the marketing of Zyprexa to doctors and the injury claimed by the plaintiffs was "attenuated."
For some additional information on the Lilly-Zyprexa matters, and the over $1 billion in fines that the company has already paid in these cases, please see our items dated 2/6/08; 4/5/08 and 10/16/08 below.
(9/4/10)- Allergan Inc, the maker of Botox, the so-called wrinkle smoothing cream, agreed to pay $600 million to settle charges that it illegally promoted the drug for off-label uses between 2000 and 2005.
The company pleaded guilty to one criminal misdemeanor charge and to pay $375 million to the government for mislabeling Botox, through promotions for unapproved usages.
Allergan also agreed to pay $225 million to resolve civil charges that it had caused false claims to be submitted to Medicare, Medicaid and other government health programs.
Sally Quillan Yates, the United States attorney for the Northern District of Georgia stated: "When pharmaceutical companies ignore the FDA's approval process and market their drugs for off-label indications, they remove the safety net and assurance of efficacy provided by the FDA's rigorous review."
Her office began investigating the company's marketing efforts in 2007 after a whistle-blower filed a lawsuit in Atlanta.
Allergan also entered into a five-year corporate integrity agreement with the government under which it will be required to publish information about its payments to doctors. The company also agreed, as part of the settlement to drop its First Amendment lawsuit against the FDA in which it had claimed free speech protections when giving doctors information about unapproved uses of Botox. Five whistle blowers will be awarded a total of $38.7 million out of the settlement.
(8/12/10)- AstraZeneca PLC announced that it had reached a settlement of $198 million for the off-label promotion of its anti-psychotic drug Seroquel
There are presently17,500 product liability suits against AstraZeneca alleging that the drug caused diabetes and other injuries, and that the company failed to adequately warn of the drug's risks. The product liability suits will continue in both federal and state courts
In April, the company announced a settlement of $520 million with the U.S. Justice Department over the matter. Seroquel was the 5th best-selling drug in the world last year with sales of $4.9 billion, according to IMS Health, a medical data firm.
(6/6/10)- The new health-care reform act requires pharmaceutical companies to advise Congress as to how many free samples of their products they distribute.
Pfizer Inc. gave out 101 million drug samples worth $2.7 billion in 2007. Merck & Co. gave out 39 million samples worth $356 million and Eli Lilly & Co. gave out 33million samples worth $67 million.
The value of the drugs reported to Congress was based on either the market price or the wholesale cost for the drugs.
In addition to the free samples, Pfizer said it has helped six million patients receive more than 48 million Pfizer prescriptions, which was worth an estimated $5.7 billion as part of its program to help low income individuals receive low to no-cost drugs.
(4/6/10)- It seems that no matter how big the fine may be, the drug
companies continue to illegally market their drugs for off label usages. To see
more on this topic, please see our item dated 4/2/10 below. Civil prosecutions
do not seem to deter the practice; maybe criminal prosecutions will have to be
attempted to end the matter.
In the latest civil settlement, the Justice Department announced that two subsidiaries of Johnson & Johnson had agreed to pay more than $81 million in a case accusing them of illegally promoting the epilepsy drug Topamax for psychiatric use.
The drug had been approved for the treatment of epilepsy and for preventing migraine headaches.
The government brought the action against Ortho-McNeil Pharmaceuticals a subsidiary of J&J, for unapproved psychiatric uses under a program called Doctor-for-a-Day. Under that program an outside psychiatrist accompanied a salesperson for the drug when visiting health providers and a speaking engagements to promote unapproved usage of the drug.
According to IMS Health figures, the drug achieved sales of $2 billion a year in 2006 and $2.7 billion in 2007. Since then, generic competition has cut the sales of the drug down to $148 million in 2009.
The settlement resolves two lawsuits bought under the False Claims Act. Private citizens who brought the suits will receive $9 million of the total agreed upon amount.
(4/2/10)- Attorney General Eric H. Holder and Kathleen Sebelius, secretary of health and human resources announced that the Justice Department and AstraZeneca PLC had settled the government's investigation into the company's illegal marketing practices in connection with the sale of its blockbuster schizophrenia drug Seroquel.
The settlement calls for the company to pay a fine of $520 million and it will sign a corporate integrity agreement with the Justice Department to cease the illegal marketing of the drug for non-approved usage. The company will not face criminal prosecution in connection with this matter.
The company had been accused of misleading doctors and patients by playing up favorable research and not adequately disclosing studies that show Seroquel increased the risk of diabetes.
An internal e-mail that was discovered as a result of one of the 25,000 civil suits still pending against the company showed that the company hid the results of a study that showed that Seroquel users gained 11 pounds a year, while publicizing another study that showed the users lost weight as a result of using the drug.
This is the fourth case in the last 3 years in which a drug company admitted to federal charges of illegally marketing of anti-psychotic drugs. To see more about the largest of the settlements please see our item dated 9/9/09 below wherein Pfizer agreed to pay a total of $2.3 billion for the illegal marketing of 13 of its drugs.
Eli Lilly agreed to pay a fine of $1.4 billion in January 2009 to settle the investigation of the illegal marketing of its anti-psychotic drug Zyprexia,a nd in 2007, Bristol-Myers Squibb and a subsidiary agreed to settle federal and state investigation into marketing of its anti-psychotic drugs Abilfy.
According to IMS Health, a drug data firm, the anti-psychotic drugs as a group accounted for $14.6 of the nation's $300 billion in drug spending last year, making it the number one category selling drugs in this country.
IMS Health data showed that Seroquel was the 5th best selling drug in this country last year. The pill is taken once or twice a day and sells for about $4 a pill
(3/16/10)- In the recession that the country has gone through since the end of 2007, and which is hopefully coming to a conclusion now, the great "health-care debate" certainly has been good for the advertising industry.
An interesting development in this matter is the fact that the pharmaceutical industry's trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA) will spend an estimated $8 million in advertising in support of President Obama's health-care plan
It has been estimated that over $200 million has been spent to air pro and con arguments on the issue to the local broadcast and cable industries. That means this issue has broken the record for the most money spent on this type lobbying campaign since the debate over Medicare coverage for prescription drugs that resulted in the establishment of Part D for Medicare beneficiaries.
Incidentally, the Senate version of the bill that the House is expected to pass on in a few weeks maintains the "doughnut hole" for prescription drug coverage under Part D.. It is expected that, if the House version changes that matter in the reconciliation bill, the "doughnut hole" will be curtailed so that drug prices will be lowered by about half the cost for drugs purchased in the hole.
(2/1/10)- Novartis AG of Switzerland announced that its U.S. subsidiary had struck an agreement with the U.S. Attorney's Office in Pennsylvania to settle a criminal investigation of the company's marketing of the epilepsy drug Trileptal. The company agreed to plead guilty to violating the U.S. Food Drug Act, and to pay an $185 million fine.
The settlement is "contingent on court approval".
Novatis is still in the process of negotiating with the investigators "to resolve civil claims relating to Trileptal, " and said it has set aside $397 million in connection with this investigation. The same investigators are also probing "potential off-label marketing" and payments to health-care providers involving five other Novartis drugs.
(12/28/09)- The United States and New Zealand are the only two countries in the world that allow direct-to-consumer drug advertising. Those in favor of this type of advertising say that it keeps the consumer more knowledgeable on the subject, while those who oppose it say that it is one of the reasons why medical expenses are as high as they are.
Advertising is a deductible expense item when it comes time for the drug companies to make out their taxes.
In negotiations with the president and the Congress, the pharmaceutical industry considered giving up the tax deduction as part of a deal to reduce pharmaceutical spending. Drug advertising came to over $4 billion last year, and so lobbyists for the media industry strongly opposed any measures in either the House or Senate versions of the health reform legislation to eliminate advertising as a tax deductible item for the industry.
In the end, neither House nor Senate versions of the health reform legislation have any items therein to eliminate the tax deductibility of direct-to-consumer advertising from the tax returns of the pharmaceutical industry.
(11/19/09- There has been a flood of media advertisements this past week by Pfizer Inc for its cholesterol lowering drug Lipitor, which has the largest dollar amount of drug sales in the world, and AstraZeneca PLC for its blockbuster selling cholesterol lowering drug Crestor. To what can we attribute this huge costly advertising campaign, especially since Lipitor will be coming off patent shortly? We will have an answer to this question for our viewers within the next week.
Drug companies spent a total of about $4.4 billion on ads for prescription drugs last year, according to TNS Media Intelligence, an ad tracking firm owned by WPP. The breakdown of that total is as follows: $2.76 billion on TV; $1.41 billion on magazines; $139.7 million on the Internet; $93.6 million on newspaper ads; $15.8 million on radio ads and about $3.1 million on outdoor ads.
The FDA held hearings last Thursday on revising its guidelines for marketing prescription drugs online. The present rules for advertising on the Web require brand name advertising to include disclosures, such as the condition that drug is intended to treat and potential side effects. The agency has not set specific standards for online ads, and this has caused a lot of doubt in connection with what is or isn't proper advertising on the Web.
The FDA sent letters to 14 drug companies in March, telling them that their search ads needed to include risk information about their drugs in the text of the ads.
(11/16/09)- Takeda Pharmaceutical, the Japanese drug company's heartburn medication Prvacid is due to come off patent this month. According to IMS Health, a drug data gathering firm, it is the 11th biggest selling drug in the world with over $3.1 billion in sales last year.
Takeda sold the rights to sell a generic version of Prevacid to Novartis AG a few years ago, and now Novartis is about to embark on a $200 million ad campaign to help promote sales of Prevacid 24HR.
The chief competitor to Prevacid is Proctor & Gamble over-the-counter medication Prilosec OTC.
Prilosic OTC and other generic versions of heartburn medications sell for about $10.49 to $8.39 for a 14-day supply of the drug, according to Euromonitor International, a market-research firm, whereas Prevacid 24 HR will sell for $11.99 for a 14-day supply.
Please keep in mind that $200 million amount the next time you hear it said that a drug company has such huge costs in developing and selling a new drug.
Interpublic Group's Deutsch division created the Prevacid 24HR ad campaign.
(11/8/09)- As the list of drug companies settling cases for illegal marketing of their drugs with the Justice Department, state attorneys-general and the Federal Trade Commission continues to grow, it becomes even more obvious that huge fines do not stop these companies from committing these illegal acts. What will it take to have the drug companies end these illegal practices?
In that vein, AstraZeneca announced that it had settled two federal investigations and two whistle blower suits over the sale and marketing of its blockbuster psychiatric drug Seroquel for $520 million
As a result of aggressive marketing, Seroquel has been increasingly used for children and elderly people for usages not approved by the FDA. Seroquel was a top-selling anti-psychotic drug in America, with total sales of $17 billion in sales since 2004, according to IMS Health.
The names of the whistle-blowers, and other details of the suit remain sealed in the federal court in Philadelphia. Stephen A. Sheller, was the Philadelphia lawyer who represented the whistle-blowers.
South Carolina's attorney general Henry McMaster announced that the state had reached a $45 million settlement with Eli Lilly & Co. over the company's marketing of the anti-psychotic drug Zyprexa. The company previously reached a $62 million settlement with 32 states that had sued over the illegal marketing of Zyprexa.
(10/9/09)- Before a drug can be approved by the Food and Drug Administration for usage in this country it must undergo extensive and expensive clinical trials in order to prove its efficacy and safety. Once the drug has been approved for sale, the manufacturer of the drug is not allowed to promote that drug for off-label usage.
In a complaint filed in federal court in Washington, Allergan Pharmaceuticals, the manufacturer of Botox, an anti-wrinkle medication, is suing the FDA, and also the Justice Department, which prosecutes violators of the law for violation of the company's First Amendment right to speak freely and truthfully about the benefits and risks of its medication.
"This is the broadest attack on the constitutionality of FDA restrictions on speech brought by an individual drug company. It's a precedent setting case," said Jeffrey N.Gibbs, a lawyer in Washington who specializes in food and drug law.
(9/9/09)- Pfizer Inc., the world's largest drug company, agreed to plead guilty to a criminal charge relating to promotions of its now-withdrawn pain medication Bextra, and will pay a record $2.3 billion to settle allegations that it improperly marketed 13 of its medications.
Pfizer had pleaded guilty in 2004 to an earlier criminal charge of improper sales and marketing practices, which have been under federal supervision since then.
The Department of Justice and officials of the Health and Human Services Department unveiled the agreement
The settlement includes:
Pfizer said it would pay $503 million to resolve practices involving Bextra; $301 million related to its schizophrenia drug Geodon; $98 million for its antibiotic Zyvox and about $50 million for its nerve pain drug Lyrica.
In addition, a Pfizer subsidiary, Pharmacia and Upjohn, will plead guilty to violating the Food, Drug and Cosmetic Act for its promotion of Bextra. The company had previously announced that it would take the charges in a statement it made in January of this year. It was Pfizer's fourth settlement over illegal marketing activities since 2002.
The $2.3 billion fine amounts to less than three weeks of the company's total sales in a year.
(8/8/09)- Did you know that there are only 2 countries in the world that permit direct-to-consumers ads? The other country that allows it besides the U.S. is New Zealand.
Some Congressmen have recently introduced legislation that attempts to put a crimp in this practice on the federal level.
Representative James P. Moran, Democrat of Virginia, is sponsoring a House bill that would ban ads for prescription sexual aids like Viagra and Levitra from prime-time television, on decency grounds. Rep. Henry A. Waxman, Democrat of California, has said he favors empowering the FDA to bar consumer ads for new drugs for an initial period after the agency has approved the drug, to insure the further safety of the drug.
Rep. Jerrold Nadler, Democrat of New York, has introduced a bill called the "Say No to Drug Ads Act. It would amend the federal tax code to prevent drug companies from deducting the cost of direct-to-consumer drug ads as a business expense..
The Nielsen Media Research firm, a data research firm, estimated that pharmaceutical companies spent about $4.8 billion on direct-to-consumer television, radio, magazine and newspaper ads in 2008.
(7/21/09)- Merck & Co. and Schering-Plough Corp. agreed to pay the $5.4 million in legal costs incurred by 35 states and the District of Columbia in connection with the investigation of the marketing of their cholesterol drugs Vytorin and Zetia.
Merck and Schering are presently close to finalizing their merger, which is expected to occur in the 3rd quarter of this year.
The marketing of the drugs occurred after the companies Enhance clinical trial study showed that the drugs were no more effective than some generic cholesterol fighting medications.
(7/14/09)- The Federal Trade Commission (FTC), not the Federal Drug Administration (FDA) regulates nonprescription drug ads. Nonprescription drug ads must be truthful, not misleading, and substantiated. An ad is considered deceptive if it misleads reasonable consumers about something important inducing the purchase, or usage of a product.
Johnson & Johnson is instituting an expensive ad campaign to overcome the negative publicity it's pain relieving medication Tylenal has gotten, since it does contain acetaminophen. J&J will have some tough decisions to make in connection with its Tylenol ads in light of the FDA panel recommending limited dosages for consumers using that medication.
Advertising expenses have long been considered a deductible item for all businesses. A House Ways and Means committee, under the leadership of Charlie Rangel, Democrat from New York is considering proposed legislation that would eliminate this deduction with respect to prescription drug advertising.
Representative Rangel said that denying the deduction to pharmaceutical firms would raise $37 billion over 10 years.
Media industry officials pointed out that total ad spending by the pharmaceutical industry in 2008 was about $4.2 billion. Taxed at a theoretical 35% rate over 10 years would yield closer to $15 billion, not $37 billion. The legality of such a law, if it is ever passed is certainly dubious.
(7/5/09)- The Food and Drug Administration (FDA) does not allow pharmaceutical companies to promote "off-label" usage of a drug, but that only applies to the sales, advertising and administrative people employed by the drug companies. Medical science liaisons (MSLs) are in their own special category, so they are not covered by this proviso.
The FDA permits drug companies to respond to unsolicited requests for information from doctors, including off-label data, and the MSLs, who are often physicians and pharmacists, are permitted to respond to these questions.
According to data compiled for 12 major pharmaceutical and biotech companies by PharmaForce International, a market-research firm there were 1,970 MSLs employed by these companies in 2008, up from 1,335 in 2003.
At the end of 2008, there were 90,000 sales reps employed by the drug makers, down from the peak number of 106,000 in 2006, according to ZS Associates, a consulting firm. The average sales rep made $86,000 in 2008, according to figures from ZS.
(5/24/09)- Johnson & Johnson has withdrawn the 7 minute video advertisement for its chronic-pain drug Ultram ER at the request of the FDA, which in a letter to the company, accused them of false and misleading advertising in connection with the medication. As a result thereof, the company has withdrawn the advertisement from the airwaves.
The FDA wants the company to provide truthful, non-misleading and corrective promotional material about the drug. J&J has until May 27th to reply to the letter.
The video was launched in July 2008 and depicts Michael Schatman of Pacific Northwest University and Olympic Gold Medalist Nikki Stone making statements about the consequences of chronic pain and the positive effects of Ultram ER. The side effects of the drug are quickly scrolled in small sized fonts at the end of the video.
Ultam ER is approved to treat moderate to severe chronic pain in adults who require around-the-clock treatment for an extended period of time.
(4/29/09)- According to IMS Health, a drug data firm, spending on consumer advertising of prescription drugs fell by 8% in 2008 to $4.4 billion, the first drop in ad spending since direct-to-consumer advertising was allowed in 1997. IMS estimated that prescription drug spending was $4.8 billion in 2007, up over 4 fold from the spending in 1997.
Overall, print spending for prescription drugs fell 18% for 2007and 4% from TV advertising according to the IMS numbers for 2008. Nielsen Co. put overall advertising spending at $137 billion down 2.6% from 2007. Thus overall drug spending decreased at a faster pace than did ad spending in other areas.
(4/18/09)- The Food and Drug Administration sent warning letters to 14 major pharmaceutical companies in connection with ads that they used to accompany Internet search engine results. The agency claimed that the ads were misleading because they did not include risk information about the particular drugs.
These letters represented one of the first major attempts by the FDA to regulate ads on the Internet.
The ads cited by the FDA typically come up as "sponsored links", when a searcher enters a disease or asks for a drug in connection with a particular disease.
(2/23/09)- Bayer Health Care Pharmaceutical's Yaz is the best selling oral contraceptive in the United States. According to IMS Health, a health-care information company, the product garnered about 18% of the market, that meant about $616 million in sales last year.
The company however has just initiated an advertising campaign as part of a settlement with the FDA and the attorneys generals of 27 states because Bayer had been advertising the product for unapproved purposes. In this case it had claimed the product could cure pimples or premenstrual syndrome.
Under the terms of the settlement, the company must spend at least $20 million over the next 6 years on a corrective advertising campaign for the drug and it must submit all Yaz ads for federal screening before they appear.
The ads in question overstated the drug's ability to improve women's moods and clear up acne, while playing down its potential health risks. The corrective ads on TV are due to run through July 26, but they do not explain that they are meant to correct the earlier false advertisements.
The FDA had approved the drug in 2006 as a birth control pill that has a side benefit in treating mood-related psychological problems. In 2007 the agency approved another side benefit of Yaz, that of improving moderate acne. The drug contains drospirenone, a progestin that can cause excess potassium production in some patients. Its side effects include increase risk of heart and other health problems.
The FDA staff that oversees drug advertising has only 52 people even though it is overseeing thousands and thousands of ads from the drug companies every year.
(2/9/09)- Even though the fines keep on increasing, this does not seem to deter the pharmaceutical companies from continuing to illegally promote their best selling drugs for off-label purposes. A new high for a settlement-fine for illegal off-label promotion of a drug was the Pfizer Inc. settlement in which the company agreed to pay $2.3 billion in the now-withdrawn painkiller Bextra lawsuits.
The settlement, which requires the approval of a federal judge, would be the largest ever paid by a drug company to settle an off-label illegal promotion of a drug. Lilly & Co. set the previous high as we discussed in our items dated 2/2/09 and 1/27/09 below.
The FDA approved Bextra to treat arthritis, rheumatoid arthritis and menstrual pain, but it has not been announced as to which illegal off-label usage this particular settlement is related to. Pfizer settled another case in October in which the Kentucky state attorney general complained that the company promoted Bextra for acute and surgical pain.
Pfizer withdrew Bextra from the market in 2005, after Merck & Co. had withdrawn its painkiller medication Vioxx.
Pfizer also announced that it had reached an agreement in principle that would settle 90% of the personal injury lawsuits against its painkiller medications Bextra and Celebrex for $745 million.
In addition to the $745 million, the company would pay $60 million to the Attorneys General in 33 states and the District of Columbia over cardiovascular risks and some life-threatening skin reactions. Another $89 million will be used to resolve some class action suits alleging fraud in connection with the promotion of Bextra and Celebrex
State and federal judges have ruled that plaintiffs have failed to present credible scientific evidence that proved that Celebrex can cause heart attack or strokes at its most commonly prescribed dose.
(2/2/09)- Updating our item dated 1/27/09, we now have the exact breakdown on the Eli Lilly & Co. Zyprea settlement. The company did not have to admit to any wrongdoing in the case, but civil litigants will get $800 million, the federal government will get $438 million, and $362 million will go to approximately 30 states involved in the lawsuit.
The Associate Press reported that the company will have to pay "$615 million to resolve the criminal probe, and plead guilty to a misdemeanor violation of the Food, Drug and Cosmetic Act for promoting Zyprexa as a dementia treatment."
Lilly reported $4.8 billion in sales for Zyprexa in 2007, and $37 billion since the drug was first introduced. The FDA approved the drug for lpatients who have bipolar disorder or schizophrenia.
(1/27/09)- Eli Lilly & Co. agreed to pay $1.4 billion to settle criminal and civil charges that it illegally marketed it antipsychotic drug Zyprexia for unauthorized use in patients, particularly the elderly suffering from dementia and young children.
In one marketing campaign, the company urged geriatricians to use the drug to sedate unruly nursing home patients so as to reduce "nursing time and effort", according to court documents. These marketing campaigns were done in the face of strong evidence as to how dangerous the drug was to young and elderly.
There was strong evidence that the drug caused severe weight gain and metabolic disorders in young children. The U.S. attorney's office of the Eastern District of Pennsylvania was prosecuting the case. The amount of the settlement is a record sum for so-called whistle blower cases. In this case the whistle-blowers have not been named.
If Lilly had been convicted in the case the company could have been barred from participating in the federal Medicare and Medicaid programs. Zyprexia is Lilly's biggest selling drug, with over $4.8 billion in sales in 2007. The drug has been approved only for the treatment of schizophrenia and the mania and agitation associated with bipolar disorder.
It is unclear at this time whether or not the states, which are parties to the case, have agreed to the terms.
(1/19/09)- Under new guidelines established by the FDA, drug manufacturers will be allowed to distribute copies of medical journal articles that describe unapproved uses for drugs.
Please keep in mind that physicians have been allowed to prescribe drugs for "unapproved" usage, but this new policy will in effect encourage the drug companies to promote their medications for unapproved uses. We at therubins strongly opposed these new guidelines.
The FDA had permitted drug company salespeople to distribute articles about unapproved drug usage if the articles had been published in a peer reviewed medical journal. The law that permitted this procedure expired in September 2006, but the pharmaceutical companies have been lobbying since then to allow these articles to be distributed once again.
Under the expired law, the pharmaceutical company had to submit reprints of the articles to the FDA before sending it them to doctors. Under the new guidelines no prior submission of the article to the FDA need be made.
(1/10/09)- Our item dated 12/17/08 below stated that: "U.S. pharmaceutical ad spending fell 6% in the first eight months of 2008, to $3.2 billion, according to TNS Media Intelligence, a New York media data firm. Total ad spending in 2007 came to $5.3 billion, which represented a 3% decline in spending over the record ad 2006 spending level."
The Washington-based Center for Public Integrity reported that the pharmaceutical industry spent $168 million in 2007 on lobbying members of Congress, up 32% from 2006 with the Pharmaceutical Research and Manufacturers of America leading the way spending $23 million in 2007. (Information available through the Senate Office of PublicRecords).
Our item dated 12/17/08 below stated that: " According to figures from IMS Health, a medical data firm, drug companies gave away nearly $16 billion in free drug samples and spent more than $6 billion on "detailing" which included buying of meals for a doctor's office as well as the free promotional items.
Total the above spending by the pharmaceutical industry and it comes to $27.3 billion in 2008. Now compare that to the $50 billion that the industry spent on research & development and you begin to further understand why the cost of drugs keeps escalating at a far steeper percentage per year than is justified.
(1/4/09)- The latest voluntary advertising code restrictions from the Pharmaceutical Research and Manufacturers of America (PhRMA) that has been adopted by about 40 drug companies went into effect on January 1, 2009. PhRMA is the biggest trade group of drug manufacturing companies.
The new code bars drug companies from giving doctors branded pens, note pads, staplers, flash drives, paperweights, calculators and other promotional items that you see abounding in medical offices. It also reiterates the 2002 code guidelines that prohibited more expensive gifts such as tickets to entertainment events and medical junkets.
According to figures from IMS Health, a medical data firm, drug companies gave away nearly $16 billion in free drug samples and spent more than $6 billion on "detailing" which included buying of meals for a doctor's office as well as the free promotional items.
(12/17/08)- U.S. pharmaceutical ad spending fell 6% in the first eight months of 2008, to $3.2 billion, according to TNS Media Intelligence, a New York media data firm. Total ad spending in 2007 came to $5.3 billion, which represented a 3% decline in spending over the record ad 2006 spending level.
Spending on new brand drugs fell 7% last year, while spending on established brands rose 5%, according to the TNS data.
Most countries outside the U.S. prohibit direct-to-consumer advertising by the drug companies.
The pharmaceutical industry has upgraded its voluntary standards for direct-to-consumer advertising to include a ban against promoting drugs for non-FDA approved usage. It also banned the usage of actors portraying physicians in pharmaceutical ads, and the guidelines will bar celebrity endorsers unless they actually use the drug being endorsed.
(11/28/08)- The U.S. Court of Appeals for the First Circuit in Boston upheld the constitutionality of New Hampshire's first-in-the-nation law that restricts drug company access to some information about doctor's prescription-writing habits. The ruling overturned a lower court decision that said the confidentiality law unconstitutionally infringed on free speech.
Drug companies use prescription information to single out doctors and tailor their sales pitches according to this data. Patient's names are not included in the data, but the New Hampshire law blocked those pitches by restricting access to information that identifies doctors and other medical professionals.
(10/26/08)- It never seems to end does it? A drug company settles a case brought against it by state attorneys general or the Justice Department for false advertising or consumer fraud, pays a small penalty in comparison to the benefit that it reaped from the false advertising, and then proceeds to go back and do the same thing to promote another one of its drugs.
Unless steeper penalties are imposed on the drug companies, and also more criminal actions are brought against the companies that commit the misdeeds, the wrongful acts will continue to occur ad finitum.
In the latest example of this type of egregious conduct, Pfizer Inc. announced that it has finalized a settlement with 33 states and the District of Columbia to resolve claims primarily related to alleged promotional practices for Bextra, its pain medication that it voluntarily withdrew from the U.S. market in 2005,
Bextra was Pfizer's Cox-2 inhibitor medication that was withdrawn from the market shortly after Merck & Co. voluntarily removed its Cox-2 inhibitor medication Vioxx. Pfizer will pay $60 million to the plaintiff states and the District of Columbia, and also adopt compliance measures that would avoid a repetition of this type of advertising. Until it was withdrawn from the market, Bextra was a block-buster selling drug for Pfizer.
(10/16/08)- Eli Lilly & Co. has agreed to pay $62 million to 33 stated to settle claims that it improperly marketed Zyprexa, its anti-psychotic drug to patients who did not have schizophrenia or bipolar disorders. This settlement ends an 18-month investigation led by the offices of the attorneys general of Illinois and Oregon, which contended that the company had violated consumer protection laws by promoting off-label usage of the drug.
This matter is separate from the criminal investigation led by federal prosecutors in Philadelphia, wherein the case may result in over a $1 billion settlement by the company and the government plus a plea of guilty to a misdemeanor charge related to off-label marketing of Zyprexa.
Internal Lilly documents and e-mails showed that the company marketed Zyprexa for patients with dementia and milder forms of bipolar disorder.
Zyprexa can cause severe weight gain and an increase in blood sugar levels in many patients leading to diabetes according to the American Diabetes Association.
(10/16/08)- Direct-to-consumer advertising of prescription drugs is not allowed in Europe. Change however, is on the way, because the European Commission is planning to propose changes later this month, according to an early draft of the proposed legislation that was made public recently.
The new rules would let drug companies provide "objective and unbiased" information about drugs in print and online. The pharmaceutical companies would be allowed to set up Web sites about their drugs and possibly circulate brochures at pharmacies, activities that are not allowed today.
The changes would need to be approved by the European Parliament and Council of Ministers before becoming law. This could mean that it would take several years before any changes will occur.
(10/5/08)- TNS Media Intelligence, a consulting firm estimates that about $193 million was spent on direct-to-consumer advertising on television and the internet by medical equipment companies in 2007. Since medical equipment often involves the implantation of varied devices from artificial knees or hips to stents, many medical professionals, medical groups, consumer groups and lawmakers feel that this is an area that requires regulation by the FDA.
The Senate Committee on Aging, which is chaired by Herb Kohl, Democrat of Wisconsin, held a hearing recently about direct-to-consumer promotions of medical equipment. Dr. Kevin J. Bozic, a professor of orthopedics at the University of California, San Francisco testified at the hearing about the greater need for regulation of the medical equipment industry's advertising.
"The results are irreversible because you are kind of stuck with a device", he said. Senator Kohl has also spoken about the greater need to regulate direct-to-consumer ads from the medical equipment industry.
A representative of Consumer Union, the publisher of Consumer Reports magazine testified of the need to have balanced ads from the medical equipment industry, similar to the regulations that governs pharmaceutical advertisements.
(9/10/08)- The results of a recent study that was done in an attempt to determine if direct-to-consumer ads that was published in a recent edition of the online British Medical Journal. It concluded that these ads did not play a significant part in increasing the sales of these drugs. The study, which was conducted in Quebec Canada is in effect saying that the pharmaceutical industry is wasting the $5.4 billion it spent on TV ads last year, according to Nielsen Monitor-Plus.
The study was led by researchers from Harvard Medical School, and the University of Alberta, Canada, who looked at three drugs and the advertisements for same in Quebec Canada. Although Canada does not allow direct-to-consumer ads, the country does allow "soft ads", meaning the drug's name is allowed to be mentioned, but not what it is used for.
The subjects involved in the study were broken into two groupings-those that spoke English in one group, and those that did not into the other group. The researchers looked at the prescription data from 2,700 pharmacies compiled by IMS Health Canada, and found no difference in sales for Enbrel or Nasonex after the U.S. ads started to appear.
There was a 40% increase in the sales of Zelnorm in English-speaking Canada as soon as the ad campaign began and flattened out in the ensuing years. Sales for this drug may have increased since there was no other medication available at that time to treat irritable bowel syndrome. That drug has since been removed from the market.
Of course this study did not deal with the issue of false and misleading ads, and is contrary to the results of many other studies which show that the marketing of drugs is strongly related to the increase sales of that particular drug.
All three drugs used in the study were on the market for at least a year before the ads started and none were advertised as soft ads.
In an April report from the nonprofit Kaiser Family Foundation the researchers found that only one-third of patients requested a particular drug from their doctor even though 91%of them had seen or read about the drug. Fifty-four percent of the patients got a different drug from their physician.
(9/2/08)- Federal Drug Administration rules do not require the listing of adverse reactions to a drug if the medication is not mentioned in the ad. This has led the drug industry to increase its usage of "unbranded product advertising".
In unbranded product advertising, the ad tells the viewer about a particular problem, such as insomnia, and then leads the viewer to a Web site that specifically deals with the product that the drug company was pitching in the first place.
With the economy reeling from a slow down, one of the areas most companies look for savings is in cutting back on its advertising. The drug industry is no exception to this situation, and many advertising professionals estimate the drop off in the first quarter of this year may be as large as 30%.
This figure will grow for the 2nd quarter of 2008 which ends on September 30th, since advertising in all media increased, because of the now concluded Olympics in Beijing.
"With unbranded ads, you don't have the 'fair balance' requirement," said Rich Gagnon of the ad agency Draft FCB, part of Interpublic Group of Companies Inc., in New York. "Imagine paying millions to run that ad campaign, and having to use up 30 seconds to list all the problems," said Mr. Gagnon.
(8/21/08)- When is a clinical trial of a potential new drug an actual test of the effectiveness of a drug, and when is it a "seeding" trial, meaning it is intended for mainly promotional purposes to jump start sales of the drug involved in the test?
Researchers concluded that Merck & Co.'s Advantage clinical trial of its painkilling drug Vioxx in 1999, was in fact a "seeding" trial intended to promote sales of the medication, and not really intended to prove the efficacy of the drug.
Kevin Hill, a psychiatrist at McLean Hospital in Belmont, Mass, the lead author of the study, the results of which were published in a recent edition of the Annals of Internal Medicine, said, "Patients and physicians weren't told about the marketing objectives of the trial,"
The researchers based their conclusion after studying much of the documentation from Merck that was brought out in the recent Vioxx litigation against the company. Dr. Hill went on to say, "They (patients) need to know what they're risking their health for."
The Advantage trial compared Vioxx to naproxen in more than 5,500 patients with osteoarthritis. One of the Merck memos revealed that the trial was "designed and executed in the spirit of Merck marketing principles."
Such behavior raises ethical and scientific questions since it effects the reliability of the company's study, and as to whether or not you are exposing patients to unnecessary risks. The company voluntarily withdrew Vioxx from the market in 2005, and the litigation over the drug's usage has recently been settled for $4.85 billion.
Among critics of the study was Edward Scolnick, Merck's head of research at the time. In one of the company's memos he stated that such a study is "intellectually redundant" and "extremely dangerous" because it could yield data that might compromise results of a more meaningful trial.
(5/27/08)- Merck & Co. agreed to pay $58 million to settle civil claims by 29 states and the District of Columbia that it had used deceptive advertising for its painkilling medication Vioxx that it withdrew from the market in September 2004.
The company also agreed to a ban on medical ghostwriting, under which an author's true identity is concealed. Under the terms of the agreement the company will submit all new television commercials for its drugs to the FDA for review for the next seven years. The company will abide by any and all changes that the agency calls for in its review of the material.
Merck will also delay television ads for newly approved pain medications for the next ten years.
This civil settlement ends any investigations into Vioxx advertising practices by the company by these 29 states and the District of Columbia.
(5/22/08)- In an op-ed article in the May 14th edition of The New England Journal of Medicine, the 2 authors chastised Johnson & Johnson, and its subsidiary Cordis for what they allege is the company's misleading "Life Wide Open" direct-to-consumer television ad for its stent Cypher.
The 60-second ad for the stent failed to adequately warn consumers associated with the implantation of stents. The article was written by the cardiologists Dr. William E. Boden of the medical school at the State University of New York at Buffalo and Dr. George A. Diamond of Cedars-Sinai Medical Center in Los Angeles. As we point out in our item dated 5/16/08 below a subcommittee of the House Energy and Commerce Committee has recently held hearings regarding direct-to-consumer ads.
Print prescription drug ads already require that a toll-free number to the FDA, to report adverse reactions, be included in the ad, but television ads do not have such a requirement. There is no such requirement for ads for medical devices.
The FDA has had a set of guidelines since 2004 for advertising regulations for medical devices, but so far, no action has evolved into regulations for any of these proposals. The Cypher ad was the first one to market stents directly-to-consumers. TNS Media Intelligence estimates that medical device manufacturers spent about $200 million on television ads for their products in 2007
A spokesman for the company, Christopher Allman, said the television ad is no longer running nationally but is still being broadcast in the Baltimore area.
The ad in question gives the impression that the Cypher stent is going to improve life more than any other brand would.
In the article the authors state, "The notion that television viewers inspired by such an ad would go to their physicians and request not only a stent, but a specific brand and model of stent is frightening if not utterly absurd."
(5/16/08)- A subcommittee of the House Energy and Commerce Committee, headed by Michigan Democrat Representative Bart Stupak, has held a hearing in connection with the topic of direct-to-consumer advertising by the drug industry. Mr. Stupak said that he wants to lay the groundwork for future legislation to tighten controls on drug marketing, including giving the FDA the right to force changes in TV drug ads before they are broadcast.
In an recent interview Mr. Stupak cited the advertising by Johnson & Johnson and its subsidiary Ortho Biotech for Procrit as an anti-fatigue drug, a use for which the drug wasn't approved, despite repeated requests from the FDA to the companies to revise their commercials. "They advertised this for seven years," said Mr. Stupak, calling this a violation of off-label-use prohibitions.
The company stopped running the Procrit TV ads in 2005, and the print ads in 2006, even thought the agency first requested stoppage of the ads in 1999.
(4/26/08)- Pharmaceutical companies spent about $5.4 billion on TV ads last year, according to Nielsen Monitor-Plus. The chairman of the House Committee on Energy and Commerce, Michigan Democrat John Dingell, plans to announce a hearing on direct-to-consumer advertising, to take place in a few weeks.
Senator Chuck Grassley of Iowa, the ranking Republican on the Finance Committee, and Representative Henry Waxman, the California Democrat who is chairman of the Oversight and Government Reform Committee, are both investigating drug marketing.
A recent edition of The Journal of the American Medical Association (JAMA) has cast additional doubt on the pending proposal from the FDA to allow drug companies to advertise off-label usage of a drug if the usage was approved in a peer-reviewed medical journal.
The JAMA paper asserted that Merck & Co. had drafted research studies for its pain-killing medication Vioxx, which had to be withdrawn from the market in 2006. It seems as if the company had prepared these off-label studies and then lined up prestigious doctors to put their names on the report before publication.
The article was based on documents found in the Vioxx litigation, one of which showed that a study required an "external author".
Pharmaceutical companies have previously been allowed to distribute reprints of articles supporting off-label uses, but only with FDA permission, and only if they were also formally seeking approval of those uses.
The new proposal requires that the articles published in peer-review journals not be misleading, and have to contain a warning that the FDA has not approved the off-label usage. The new proposals include a requirement that drug marketers ads must contain a phone number that consumers can call to make complaints to the FDA.
(4/5/08)- Eli Lilly & Co. and the state of Alaska announced a settlement of the lawsuit brought by the state in connection with Lilly's anti-anxiety drug Zyprexa. The trial had been going on for 3 weeks, and the settlement was announced at $15 million, even though the state's claim on behalf of its Medicaid expenditures was for $200 million.
Lilly has reached a $1.2 billion settlement with 31,000 plaintiffs in connection with Zyprexia lawsuits. As we note in our item dated 2/5/08 below, the company is close to a settlement with U.S Attorney in the case against the company now pending in the Eastern District of Pennsylvania that is expected to cost the company about $1 billion.
The company still faces nine cases filed by other state attorneys general, 1,600 by individual plaintiffs, and others by shareholders and third-party payers such as insurers.
Plaintiffs allege that the company pushed the drug for unapproved purposes, failed to discloses information about Zyprexia's link to weight gain and diabetes, and failed to report important information that it had in its hands without revealing same to the FDA before it approved the drug.
A clause built into the settlement would require the company to pay Alaska more per capita if any other state gets a better deal. There were approximately 200,000 prescriptions written for the drug on which the state based its claim.
Alaska Assistant Attorney General Ed Sniffen said the state took the settlement because damages would be difficult to prove, and the certainty that the company would appeal the decision.
Clouding the issue in the case is the doctrine of "pre-emption", wherein the Supreme Court recently decided a case involving a medical device wherein the 8-1 majority ruled that the approval by the FDA precludes a lawsuit on the state basis in the absence of fraud in getting that approval.
The Supreme Court is expected to decide a case in October between Wyeth v. Levine in which this doctrine of "pre-emption" is also involved..
One-third of Americans have asked their doctors about a medicine they have seen advertised and 82% of these people received a prescription from their doctors, a new survey by USA TODAY (March 4, 2008), the Kaiser Family Foundation and the Harvard School of Public Health found. About 44% of participants said their doctors prescribed the drug they asked about, while more than 50% said the doctor prescribed a different drug.
(3/5/08)- Pfizer Inc., has decided to cancel its long running Lipitor ad campaign that featured Robert Jarvik as a spokesman. For more on this matter please see our item dated 2/20/08 below. That's very nice of the company to cancel the 2- year ad campaign just when the contract with Mr. Jarvik was due to expire anyway.
"The way in which we presented Dr. Jarvik in these ads has, unfortunately, led to misimpression's and distractions from our primary goal of encouraging patient and physician dialogue on the leading cause of death in the world-cardiovascular disease, " said Ian Read, Pfizer's president of worldwide pharmaceutical operations. "We regret this. Going forward, we commit to ensuring there is greater clarity in our advertising regarding the presentation of spokespeople."
The House Energy and Commerce Committee that has been looking into the Jarvik television ads will continue with its hearings on this matter.
Incidentally, three former colleagues of Dr. Jarvik at the University of Utah sent a letter to Pfizer complaining that the ads incorrectly identified Dr. Jarvik as the "inventor or the artificial heart". The three assert that it was his mentor at the university Dr. Willem J. Koff, and his associate there, Dr. Tetsuzo Akutsu who deserve that distinction.
(2/20/08)- Direct-to-consumer (DTC) drug advertising first became legal in 1997. According to the latest figure, the cost of DTC advertising has just about tripled from 1997 to 2007 when it reached about $4.8 billion. Pfizer Inc., spent $258 million from January 2006 to September 2007 advertising its best selling cholesterol drug Lipitor according to figures from TNS Media Intelligence. Total worldwide sales of $12.7 billion of Lipitor in 2007 fell off slightly from the prior year, because a generic version of Merck's Zocor became available for the first time.
Not only is the cost of the DTC advertising helping to drive up the cost of prescription drugs, but all to often this advertising is shown to be false and misleading. The latest example of this that has come into the limelight is the usage by Pfizer of Dr. Robert Jarvik, who is best known for the invention of his artificial hear more than 25 years ago.
The House Committee on Energy and Commerce is looking into the Pfizer-Lipitor-Jarvik ad campaign to see if it violated legal and ethical questions in regards to DTC advertising. The committee released a copy of the 2-year contract between the doctor and the company in which he was paid a minimum of $1,350,000 to promote the drug.
The two-year deal began in March 2006 with a commercial in which Dr. Jarvik was shown as sculling at Lake Crescent near Port Angeles, Washingotn. In a newsletter published by the Lake Washington Rowing Club in Seattle it turns out that a member of the club, the sculler in the ad, was actually Dennis Williams who was similar to Dr. Jarvik in build and with a receding hairline.
Dr. Jarvik said he would not comment on the matter. Even though Dr. Jarvik holds a medical degree, he is not a cardiologist and is not licensed to practice medicine. The ad in question ran from March through July 2006.
The House committee is also seeking records from the following ad agencies involved in the project: IMC2; the Maya Group; cline, Davis & Mann; ARS Group; Guideline; Ipsos-ASI; Ipsos-Understanding; the Kaplan Thaler Group and Unit 7.
(2/6/08)- Eli Lilly & Co. may have the dubious distinction of being the new record holder with the largest settlement with the Justice Department for misleading advertising and off-label usage of one of its drugs. The drug in question is Zyprexa, an anti psychotic medication, that according to the latest media reports the company is negotiating with the federal prosecutor in the Eastern District of Pennsylvania to settle for over $1 billion.
Prior Justice Department investigations have resulted in settlements of $875 million with TAP Pharmaceuticals in 2001, and $355 million with AstraZeneca in 2003. The U.S. Attorney's Office for the District of Massachusetts health-care-fraud unit is investigating whether Merck &Co. promoted its pain medication Vioxx, which it voluntarily withdrew from the market in September 2004, for off-label usage.
Merck disclosed in a regulatory filing in February 2007 that the Justice Department had issued a subpoena requesting information relating to the company's research, marketing and sales of Vioxx as part of a federal investigation under criminal statutes. The filing went on to state that 31 state attorney generals and the District of Columbia are investigating the company in connection with Vioxx sales and marketing practices.
Documents from Lilly show that from 2000 to 2003 the company encouraged doctors to prescribe Zyprexa to people with age-related dementia, as well as people with mild bipolar disorder who had previously had a diagnosis of depression. The drug has only been approved by the FDA to treat people with schizophrenia or severe bipolar disorder.
It is thought that in addition to the fine, Lilly may plead guilty to a misdemeanor charge as part of the agreement. If the company pleads guilty to a misdemeanor, rather than a felony charge it could continue to sell Zyprexa to both Medicare and Medicaid clients.
The Lilly fine would be distributed among federal and state governments, which spent about $1.5 billion on Zypexa last year. The fine would be in addition to $1.2 billion that Lilly has already paid to settle 30,000 lawsuits from people who claim that the drug caused them to develop diabetes or other diseases. Zyprexa can cause severe weight gain in many patients and has been linked to diabetes by the American Diabetes Association.
Federal prosecutors in Philadelphia are leading the settlement talks along with Justice Department officials in Washington. State attorney generals offices are also involved. Lawyers at Pepper, Hamilton, a firm based in Philadelphia, and Sidley Austin, a firm based in Chicago, are negotiating for Lilly.
Lilly presently faces a civil trial in Anchorage by the state of Alaska to recover money the state spent on Zyprexa prescriptions. Incidentally, Lilly has raised the price of the drug by about 40% since 2003.
Federal prosecutors have been investigating the company since 2004, and state attorneys general have been doing so since 2005. The investigations gained impetus when the N.Y. Times published articles describing the company's efforts to play down Zyprexa's negative side effects and to promote the drug for off-label usage.
Internal Lilly marketing documents and e-mail messages showed that the company wanted to persuade doctors to prescribe the drug for patients with age-related dementia or relatively mild bipolar disorder.
(1/26/08)- The ramifications of the Vytorin/Zetia controversy that we discussed in our item dated 1/22/08 in our item in the article Beta-Blockers, ACE Inhibitors & Statins in the Battle Against Heart Disease or Heart Failure-Part II continue to swirl and expand, so that now an issue of conflict of interest has now entered into the plot. The Enhance end-point study of Vytorin, which is made as a joint venture between Merck & Co. and Schering-Plough determined that it was no better than the statin drug Zocor (also made by Merck) working alone at reducing arterial plaque.
The issue that initially caused consternation was the delayed release of the results of the study.
On January 15th, the day after the results of the study was released, the American Heart Association came out with a statement saying that the announced result was too limited to draw conclusions about Vytorin's ability to reduce heart attacks or deaths compared to Zocor alone. The association advised patients to consult with their physicians before discontinuing usage of the drug.
At no time did the association reveal that it receives nearly $2 million a year from the joint venture
Merck and Schering-Plough have suspended all television ads for Vytorin and Zetia, but print ads, defending the drug have been appearing as full page ads in newspapers such as the NY Times and the Wall St. Journal. .
Total U.S. prescriptions written for Vytorin in the week ended January 18th fell about 9.5% to 359,659 from 397,533 in the week ended January 11th, according to Verispan, a Yardley, Pa., drug-data firm. Prescriptions for Zetia, which the Merck/Schering-Plough joint venture also markets, fell 12% to 258,619 from 294,405 the week before according to Verispan.
(12/11/07)- The Johnson & Johnson subsidiary Cordis Corporation has begun an expensive direct-to-consumer advertising program as it became the first company to advertise its Cypher drug-coated stent to the public. The other approved drug-coated stent on the market is Boston Scientific's Taxus stent.
Both Medtronic's Endeavor drug-coated stent and Abbott's Xience V drug-coated stent are expected to gain FDA approval, and be marketed starting in 2008. Both of these stents are now being sold in Europe. For more on this matter please see our article Medical Devices-Drug Eluting Stents Boston Scientific will team up with Abbott to market the stent under the brand name of Promus.
The Cordis advertising campaign will be marketed on TV through a 60-second spot titled "Life Wide Open", which will be shown on 175 spots throughout the the life of the program. The company has also set up a Web site at cypherusa.com as an online marketing destination and information clearinghouse for patients and doctors. Omnicon Group's agency BBDO developed the consumer elements of the spot.
The campaign is aimed at showing the lasting relief afforded by the Cordis' Cypher stent from chest pains and shortness of breath which are the main symptoms of clogged coronary arteries, or angina. The television spot goes on to state that Cypher is the most studied and widely used of all stents on the market today.
Many doctors and medical professionals have been complaining that the insertion of stents is widely overused as is. Now with the advent of this advertising campaign some experts like Dr. Willian Boden, a professor of medicine at the State University of New York at Buffalo said "It's deplorable," and "You've got to wonder whether it's a sign of desperation."
Drug companies spent about $5.3 billion on advertising in 2006, which means that this figure has more than doubled since 2001. According to figures from the Center for Public Integrity the drug companies spent $155 million on lobbying from January 2005 to June 2006 on "a variety of issues ranging from protecitng lucrative drug patents to keeping lower-priced Canadian drugs from being imported."
Seven of the top 10 drug launches in 2006 were for generic drugs.
(11/14/07)- Cephalon Inc. became the latest drug or biotech company to settle a federal investigation into its sales and marketing practices by paying a huge fine. The company also agreed to enter a corporate integrity agreement while pleading guilty to a misdemeanor charge for violation of federal prescription drug laws. In this case the amount of the fine is $425 million, and follows an investigation of Medicaid claims by the United Stated attorney in Philadelphia.
The company, maker of the sleep-disorder drug Provigil was sued by the Pennsylvania Turnpike Commission in May over claims that the company sought to monopolize the drug market by delaying generic competition.
The agreement does not preclude state and municipal suits against the company for the same practices.
(11/5/07)- Merck & Co.'s cholesterol lowering statin drug Zocor patent expired, so that a generic version of the drug, simvastatin became available. The patent for Pfizer's Lipitor, which is the best selling drug in the world with over $14 billion in sales last year, does not expire until March 2010. It is estimated that total statin drug sales totaled over $33 billion last year.
Whereas 18 months ago Lipitor captured 40% of the sales for cholesterol lowering medication, it now is down to 30% of the market. Lipitor costs between $2.50 to $3 per day, whereas simvastatin costs between 75cents to $1 per day at most retail pharmacies.
Pfizer has indicated that it will try its utmost to keep the sales numbers for Lipitor as high as it can while the drug remains under patent protection. So far the company has spent 50% more this year advertising the drug than it did last year, when its Lipitor ad spending totaled $142.7 million.
Pfizer has been running a broad based print and broadcast advertising campaign featuring Dr. Robert Jarvik the inventor of the artificial heart, endorsing Lipitor.
"There's a common misconception that all cholesterol lowering medications are the same. They're not. There is no generic version of Lipitior."
Pfizer is also sponsoring a speaking tour by Dr. Louis W. Sullivan, a former secretary of Health and Human Services, who without citing Lipitor specifically is arguing against insurer's efforts to influence medical decisions.
(10/16/07)- Bristol-Myers Squibb Co. announced that the settlement terms with the U.S. attorney's office in Massachusetts had been finalized, and that it had agreed to pay slightly over $515 million to resolve the matter. The settlement of the charges had first been announced in December 2006.
The agreement settles federal and state investigations into the company's marketing and pricing practices. Included in the settlement that resolved the matters were the government's allegation as to illegal remuneration from 2000 to 2003 in the form of consulting fee to induce doctors and other health-care professionals to buy the company's drugs.
The government had further alleged that the company set and maintained fraudulent and inflated prices for an assortment of oncology and generic drug products, and knowingly misreported pricing of the antidepressant Serzone. It was also alleged that between 2002 and 2005, the company promoted the sale of Abilify, an anti-psychotic drug for pediatric use and to treat dementia-related psychoses. The FDA approved neither drug's usage for treatment of those illnesses.
(10/5/07)- Congress has just passed a bill re-authorizing the financing of the FDA that was due to expire in September. For more on this topic please see our article on the Federal Drug Administration. Some of the provisions in the new law regulate the ability of the drug companies and their ads.
The FDA will get new power to require drug companies to submit TV ads for review before they run, but it can only recommend changes, not require them. The bill lets the agency levy fines for false and misleading ads. The fines will amount to $250,000 for the first violation in any three-year period, and won't go above $500,000 for any subsequent violation in a three-year period.
Television and radio ads will also have to include " clear, conspicuous and neutral" statements about any side effects.
The pharmaceutical industry was the 10th biggest advertiser in 2006, spending $5.3 billion, or 3.5% of the total $149.6 billion U.S. market. The industry registered the highest growth rate among the top 10 U.S advertisers, growing 13.8% to $5.3 billion from $4.6 billion in 2006.
(8/25/07)- The FDA announced that it planned to study how about 2,000 people react to TV drug ads to determine if they are truly aware of the negative side effects of the drugs being advertised in such a pleasant setting. The audio warnings are almost a second thought in the ads, which normally give a pleasant picture of the subjects in the ad.
The results of a recent study that appeared in the New England Journal of Medicine suggested that the agency's drug-ad-enforcement activity had been sorely lacking. Critics of the drug company TV ads charge that images of smiling and relaxed couples and families far overshadow any negative audio comments that may appear in the drug ads.
(7/23/07)- Orphan Medical, a subsidiary of Jazz Pharmaceutical pleaded guilty in federal court in Brooklyn, to felony charges of improperly promoting its narcolepsy drug Xyrem for unapproved uses. The company agreed to pay $20 million in fines and restitution to the federal government and private insurers.
Jazz will also cooperate with the government's continuing criminal investigation and will never promote Xyrem for uses other than those approved by the FDA. The drug is the prescription version of the street drug gamma hydroxybutyrate, which has been associated with date rape and serious risks of overdose, resulting in coma and death.
The Drug Enforcement Administration lists the street version as a Schedule I drug, the most dangerous kind, the same category as heroin. The drug was approved by the FDA for narcolepsy, a serious sleep disorder. It was alleged that Orphan promoted the drug for other uses, including depression, insomnia and fibromyalgia, a pain disorder.
The investigation began after Shelley Lauterbach, a former saleswoman for Orphan, filed a whistle-blower lawsuit in 2005 in the Federal District Court in Brooklyn. Ms. Lauterbach will share a part of the $20 million settlement.
(5/18/07)- Documents supplied to, and examined by the Wall Street Journal shed some light on the murky world of illegal drug rebates, and the pushing of unapproved dosages of the drug Procrit by Johnson & Johnson. This is the drug along with Amgen's Aranesp (EPO) that are blockbuster drugs used to treat anemia patients who are undergoing chemotherapy. The FDA has recently required both companies to put label restrictions on their drugs as to the safety of the dosage that doctors may use when administering the medication.
Both former salesman of Procrit no longer work for J&J, and have brought whistle blowers suits against the company for the illegal selling of the drug.
Dean McClellan, worked for 12 years at J&J's Ortho Biotech unit selling Procrit, and Mark Duxbury was a star salesman for the drug who was fired by the company in 1998. Mr. McClellan saved 15,000 pages of memos from the company that he turned over to the Journal for review. The suit was filed in the Federal District Court in Boston.
Procrit is an infused drug, which is administered in a doctor's office. Among the charges alleged in the lawsuit are that J&J made offers to allow buyers of Procrit to receive discounts off an already discounted price for the drugs as well as rebates so that they would not use the Amgen product.
Another J&J program offered hospitals incentives to buy Procrit and shun Aranesp since they would receive an extra discount on other J&J drugs that they purchased if Procrit was used at least 75% of the time instead of Aranesp.
In addition J&J started a "Right of First Refusal" contract for doctors by offering Procrit at a lower price than what Amgen was offering to sell Aranesp at. Mr. McClellan also alleges that J&J used promotional material to encourage doctors to prescribe Procrit at higher dosages than was approved by the FDA.
(4/21/07)- The Senate Health Committee approved legislation that would give the FDA the power to prohibit direct-to-consumer advertising for up to two years for a new drug. The legislation would authorize the agency to restrict the advertising if the FDA determines that disclosure of serious risks associated with the new medication were not enough to fully protect the public from the adverse reactions.
Some legislators expressed their doubts as to the legality of this type of provision, as a violation of free speech, but supporters of the proposed legislation cited the fact that it was prefaced by the phrase: "To the extent consistent with the Constitution…".
The proposed legislation would also allow the agency to charge a user fee to drug companies voluntarily submitting ads to the FDA for review before being aired.
The legislation also codifies a tool that the FDA has begun to use as part of the drug approval process to minimize the risk that a product will cause harm in the marketplace while its effects on the broader population are monitored.
These so-called risk evaluation and mitigation strategies (REMS).are one of the most controversial parts of the legislation.
(3/15/07)- Johnson & Johnson announced that it had received subpoenas from federal prosecutors in Philadelphia, Boston and San Francisco related to the sales and marketing of 3 of its drugs. The drugs in question are Risperdal, a treatment for schizophrenia and bipolar mania; Topamax, an epilepsy drug; and Natrecor, which is used to treat heart-failure patients.
All three investigations have been previously disclosed, but these new subpoenas indicate that the matter is far from being resolved.
On March 1, the House Committee of Oversight and Government Reform sent letters to 5 drug and medical device companies as part of an initial investigation into the promotion of the products beyond the uses approved by the FDA. Johnson was one of the 5 companies that received the letter.
A report from the Taxpayers Against Fraud Education Fund fount that, as of last August, more than 180 fraud allegations against drug companies were pending with the Justice Department, up from 150 in 2005
(2/4/07)- Direct-to-consumer drug advertising rose sharply between 1997 at $1.1billion, when it was first allowed, through 2005 when it was at the $4.2 billion mark according to the GAO. It dropped off somewhat in 2005, mainly because of Merck's dropping of advertising for Vioxx. TNS Media Intelligence, an advertising consulting firm, estimated that it rose 8.4% to $3.29 in the first 9 months of 2006 which brings it on track to come in with $4.5 billion in spending for the year.
The industry recently set up voluntary guidelines before beginning ads for new drugs, but each drug company has its own interpretation of what an "appropriate" time is before beginning to advertise their new drugs. A TNS study showed that on average, the companies are waiting 15 months before introducing ads for their new drugs.
The FDA sent 15 warning letters to drug companies regarding ads in 2005, and a total of 22 companies received warning letters in 2006. Under a bill sponsored by Senators Edward M. Kennedy and Michael Enzi, the chairman and ranking Republican on the Senate Health, Labor, Education and Pensions Committee, the FDA would be granted the power to require moratoriums on new drug advertising.
(1/15/07)- The FDA and the pharmaceutical industry have reached an agreement on the schedule for the new user fees that we discussed below in the item on 12/2/06. Congress must approve the five-year deal before it can take effect, so there probably will be some major changes before it is enacted. The FDA will start to hold public hearings on the new fee schedule next month.
Under the plan, companies would pay the FDA a one-time fee on top of charges for each television ad submitted for review totaling $6.25 million in fiscal year 2008. The deal accompanies proposed legislation to renew other industry funding for FDA drug reviews through 2012. It includes about $392.8 million in fees for fiscal year 2008, but the charges for the following years were not immediately clear.
About $29.3 million of those fees would target the agency's drug safety system. The 2008 fees include an additional $4 million for technology that would eventually allow drug manufacturers to submit products electronically.
This is the process that has been in place since 1992, and there are many that question the wisdom of the FDA being funded in part by the industry that it oversees. The ad fees would allow for 27 additional staff reviewers who would evaluate the ads within 45 days.
(12/29/06)- Bristol-Myers Squibb and the U.S. Attorney's office in Boston have reached a tentative agreement in which the company will pay $499 million to settle a federal investigation into illegal sales and marketing activities from the late 1990s through 2005. The investigation was first started in 2003, when the attorney's office subpoenaed the records of the company.
Although it is not exactly known which drugs were involved in the action, it is believed that Abilify, the anti-psychotic drug, which is the company's best selling drug is believed to be covered under the investigation.
As in the previously negotiated settlements between the Justice Department and companies such as GlaxoSmithKline, Schering Plough, and TAP Pharmaceuticals, it is also expected that Bristol will sign a corporate integrity agreement with regulators in the Health and Human Services Department who monitor industry compliance with federal insurance programs.
These agreements usually require the companies to run employee training programs, set up hot lines to report rule violations and follow other practices listed in government compliance guidelines. They generally run for 5 years and often require the company to hire an independent auditor of compliance practices.
(12/22/06)- If you want to talk about being beleaguered, how the FDA has only 6 reviewers to screen, review and track the more than 10,000 pharmaceutical ads placed in the media each year.
In a recent report that was issued by the Government Accountability Office the auditors found that between 2002 and 2005, it took the FDA four months on average to draft, approve and send warning letters and other correspondence to companies that were in violation of advertising rules. Between 1997 and 2001, which was before FDA lawyers began reviewing the letters as a matter of policy, it took two weeks on average to issue the letters. The number of letters written fell off by about half between the two time periods.
According to the report about $4.2 billion was spent by the pharmaceutical industry on advertising in 2005.
(12/2/06)- The Food and Drug Administration has reached an agreement with the pharmaceutical industry that would require the industry to pay fees to the agency to check the ads, in return for speedier reviews. The new proposed fees would be used to help pay for new staff to be hired by the FDA to review the industry's TV ads.
This proposed agreement would be submitted in addition to a new 5-year pact setting new user fees to be paid by drug makers to the FDA when the agency reviews their applications to market new drugs.
There are many concerned public advocates who condemn a system wherein an industry that is subject to regulations pays the fees that support that agency. To the best of our knowledge that is not the case for any other agency of the federal government that regulates an industry.
The agreement is not finalized yet and must be approved by the parent of the FDA, the Department of Health and Human Services. If there is an agreement reached, the U.S. Congress must approve it before it can take effect. Both of the agreements would begin in the government's fiscal year 2008, which starts on Oct.1, 2007.
The proposed agreements have resulted from months of negotiations between the agency and two trade organizations that represent the pharmaceutical industry, the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnical Industry Organization (BIO).
The FDA is expected to get more than $300 million in user fees in fiscal 2007, the last year of the current agreement. If the proposed agreement is approved that amount would increase by about one-third in 2008.
The FDA agreed that it would give drug makers a projected time frame of about 2 1/2 months to review new-drug applications after receiving the application.
The proposed agreement on TV ads would involve a complicated formula under which drug companies would pay about $40,000 to $50,000 at the beginning of each year for each TV ad campaign they planned to air that year. The companies would pay more -double the normal fee- in the first year to create a reserve fund. In return, the agency would phase in a requirement that any TV ads must be reviewed within 45 days.
Part of the money from the fees would go towards helping pay for the agency's move to a new office building in White Oaks, Md.
(11/4/06)- GlaxoSmithKline PLC has agreed to pay $63.8 million to settle a class action lawsuit's claim that it promoted its antidepressant drug Paxil for use by children while withholding negative information about the medication's safety and effectiveness.
Members of the class, including all U.S. residents who bought Paxil and Paxil CR, a controlled release version of the drug, for their children each could get full refunds if they have receipts for their purchases. Anyone without a receipt can get $15.
An Illinois judge will hold a hearing March 9, 2007 on whether the settlement is fair. Attorneys for the plaintiffs could get about $16.6 million.
(9/27/06)- There has been a great deal of talk about amending the 1997 law that allowed direct-to-consumer advertising by the drug companies. Now a long anticipated report from the Institute of Medicine, which is part of the National Academy of Sciences adds to the clamor calling for changes in drug advertising.
The Institute of Medicine is a non-profit organization created by Congress to advise the federal government on health issues. The report was issued by the Committee on the Assessment of the United States Drug Safety System, led by Sheila P. Burke, deputy secretary and chief operating officer of the Smithsonian Institution.
The FDA is torn between two conflicting viewpoints- on the one hand is a group that states that we need to speed up the drug approval process, while on the other hand is the group that says safety first and speed second.
The pharmaceutical industry provides much of the financing for the FDA under a law that was enacted in 1992. That law is due to expire next year, and the battle lines are already being drawn in connection with its renewal. There are many who feel that an industry should not be the one who finances an agency that oversees that same industry that is providing the financing.
There is little chance that the Congress will act on any of the proposals before next year, when it must re-authorize the 1992 financing deal.
The following are the highlights of the recommendations from the report:
(9/10/06)- Schering-Plough Corp.of Kenilworth, N.J., agreed to pay a total of $435 million, and a unit of the company agreed to plead guilty to criminal charges to settle a federal allegation of fraudulent drug marketing and pricing.
The guilty plea from the unit, Schering Sales means it can no longer sell drugs to the government, but its marketing functions have been taken over by other parts of the company, which can continue to do business with the government. Schering sales will also pay a criminal fine of $180 million.
The government accused the company of illegally inducing doctors to prescribe a number of drugs, including the cancer medications Temodar and Intron A, K-Dur, and several hepatitis medications.
The agreement comes two years after Schering agreed to pay a $340 million fine in connection with charges against it, that were brought by the Philadelphia U.S. Attorney's office. Schering was charged with having paid a kickback to a health insurer to protect its share of the market for its allergy drug Claritin, and thus avoided charging Medicaid and Medicare with the lowest price as the law requires.
The FDA approved the drug Temodar in 1999 only to treat anaplastic astrocytoma, a type of brain tumor, in patients who did not respond to other drug regimens. The Boston U.S. Attorney, Michael Sullivan charged that the company promoted the drug to treat several other types of brain cancer, and cancer that had spread to the brain from elsewhere.
Mr. Sullivan said the Schering had also provided misleading information to the government abut the price it was charging a health maintenance organization for Claritin RediTabs, to avoid having to pay rebates to the Medicaid program.
(6/18/06)- The American Medical Association adopted a compromise proposal, at its annual meeting in Chicago that would allow the FDA and manufacturers of new prescription drugs and implantable medical devices to work out a waiting period for each product before allowing ads. This waiting period will allow the medical profession more time to study the products and how they should be advertised.
The new stance from the AMA is in line with guidelines that the pharmaceutical industry adopted last year when it pledged to educate doctors before beginning ad campaigns. The association's new president-elect, Dr. Ronal M. Davis, said the measure would let doctors review the pros and cons of these products before prescribing them.
"The length of time this requires will vary from medicine to medicine, and companies will likely meet this goal in different ways", said Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America (PhRMA).
At previous AMA meetings, the group had considered a ban on prescription drugs ads, saying that the ads only induced patients to request drugs that they did not need from their physicians.
(4/15/06)- A lawsuit has been filed in the federal court in Newark, NJ, by a New Jersey employee-insurance fund alleging that Pfizer Inc. had defrauded state and federal Medicaid programs and private insurers by marketing Lipitor to a broader population of patients than permitted under federal rules.
The suit alleges the company illegally sought to persuade doctors to prescribe an expensive, lifelong drug regimen to patients with only low to moderate heart disease risk, in violation of its federally approved labeling rules. Lipitor is the most widely sold drug in the world, with over $12.1 billion in worldwide sales last year.
Federal guidelines call for exercise, diet and weight loss not drugs, for people with low to moderate risk of heart problems. The suit also alleges that a 2004 Pfizer securities filing "blatantly promotes Lipitor off-label use as a business opportunity for Pfizer."
(3/31/06)- Johnson & Johnson revealed in its most recent 10-K filing with the SEC that its Janssen Pharmaceutica subsidiary received a civil-investigative demand concerning Risperdal in January from the Texas attorney general. He is seeking "broad categories of documents related to sales and marketing of Risperdal," the filing said.
Risperdal Consta, which is used in the treatment of schizophrenia, was the company's biggest selling drug in 2005 with total sales of $3.55 billion. The company also disclosed that it received a subpoena about Risperdal from the U.S. Attorney's office in the Eastern District of Pennsylvania in November 2005.
That subpoena sought information about the marketing of Risperdal and adverse reactions to the drug
The company had previously received a subpoena in January 2004 from the Office of the Inspector General of the U.S. Office of Personnel Management. That subpoena sought documents concerning sales and marketing of Risperdal, as well as payments to doctors and clinical results of the drug from 1997 to 2002.
(3/20/06)- Add West Virginia to the growing list of states that are requiring the drug companies to disclose how much they spend on advertising and marketing, including gifts and other perks to doctors. California, Maine, Vermont and the District of Columbia already have such laws on their books, and Montana and New York are also contemplating the passage of such laws.
West Virginia's Pharmaceutical Cost Management Council has approved disclosure regulations, but they have not been formally written into law yet. Statistics that have been announced in Vermont for 2004, show that the drug companies spent $3.1 million in that state alone for the marketing of their drugs, according to forms filled with the attorney general for the state.
(1/06)- The newly promulgated Food and Drug Administration's rules on drug labeling will have a pronounced effect on drug advertising as well. The new label rules will apply to all new drug approvals, to drugs approved within the last 5 years, and to any drug for which a major label revision is requested. Older drugs will avoid the new rule. The new rules phase in over 7 years for drugs that have been approved in the past 5 years. The changes are voluntary for drugs that were approved more than 5 years ago.
The highly detailed pages of print ad in newspapers and magazines will be replaced by clearer statements about a drug's risks. Television ads will also have to change when they discuss a drug's risks. Drug labels will for the first time have a highlights section that summarizes the vital information needed to prescribe a drug safely.
The new section will first list safely warnings and then summarize any recent changes. There will be a new section telling doctors what they have to tell their patients about the drug. Advice as to how to use and dose the medication will be included in the label.
In a preamble to the new rules, it is stated that they pre-empt, or supersede state liability statutes.
(12/26/05)- Eli Lilly & Co. has pleaded guilty to a misdemeanor and will pay $36 million to settle criminal and civil complaints over the marketing of its Evista osteoporosis drug. The settlement was reached with the U.S. Justice Department attorney office for the Southern District of Indiana in connection with the company's off-label promotion of the drug
This is but another example of a drug company's illegal off-label promotion
of one of its drugs, for which it receives a slap on the wrist in comparison
with the amount of money it made through increased sales of a drug for
(12/07/05)- The government has decided, after more than 2 1/2 years of investigating the charges brought by a former Pfizer-Pharmacia employee, that it would not join the whistle-blower suit that the employee had brought against the company in connection with the marketing of the growth hormone drug genotropin. Pfizer announced that it had fired the executive who had brought the lawsuit, Dr. Peter Rost.
Dr. Rost had been a vice-president of marketing for Pharmacia in charge of marketing the drug when Pharmacia was taken over by Pfizer in April 2003. He filed a suit against Pfizer in June 2003, alleging that the company was illegally promoting the sale of the drug for unauthorized uses.
By not joining in Dr. Rost's lawsuit, the government through the Justice Department had determined that Pfizer had informed it of the allegations before Dr. Rost had instituted his lawsuit. Pfizer at the same time has filed a motion to dismiss Dr. Rost's lawsuit with the U.S. District Court in Boston, citing the prior disclosure to the government.
Pfizer terminated the employment of Dr. Rost, who had gained public attention for speaking against the company in an appearance on the television show "60 Minutes". The company stated that it had offered Dr. Rost a severance package consistent with that of employees of Pharmacia who did not remain with the company.
Dr. Rost had contended that Pharmacia offered doctors illegal inducements to use genotropin as an anti-aging drug for adults. The FDA had not approved the drug for such usage. Usually whistle-blower suits remain secret when the government participates, so the unsealing of Dr. Rost's suit is in effect a victory for Pfizer. Dr. Rost maintains that he had filed his suit before Pfizer had disclosed any information to the government.
(8/11/05)- According to figures compiled by TNS Media Intelligence, a tracker of ad spending, the pharmaceutical industry spent over $4.1 billion on direct-to-consumers ads in 2004, up from $2.5 billion in 2001. The Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry's largest trade association recently announced a set of self-policing advertising rules for its members.
Senator Charles E. Grassley (Rep.-Io.) countered with this statement: "It doesn't make sense to rely on drug companies to police themselves, … The FDA needs to stop dragging its feet and start exercising its authority to closely monitor the marketing of pharmaceuticals." The FDA has said it plans to publish a notice in the Federal Register calling for a public hearing on drug advertising. This is the first step in a long process for setting new rules in regards to pharmaceutical advertising.
(6/25/05)-The American Medical Ass'n (AMA) announced at its just concluded meeting in Chicago that it has agreed to institute a study to see whether or not direct-to-consumer ads were leading to doctors writing unnecessary prescriptions for their patients. The association's House of Delegates had considered half a dozen proposals to limit drug advertising.
The AMA is the largest organization of doctors in this country with nearly a quarter-million members. The FDA has sent out 13 warning letters to drug companies so far this year on advertising related issues. The US House of Representatives has voted to double the agency's budget for monitoring the advertising to the consumer by the pharmaceutical companies.
(6/17/05)- Bristol-Myers Squibb announced that it would impose a ban on all direct-to-consumer ads for its new drugs during their first year on the market. The company did not say what new drugs this ruling will apply to, but at least it is a small step in the right direction. The ban is part of a new advertising code that the company introduced on its Web site.
"We want to make sure that before we start mass media-television, radio and print branded advertising-that physicians have a level of comfort about the treatment and which patients are appropriate for it," said Brian Henry, a spokesman for the company.
The Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's lobbying trade arm is expected to announce a new voluntary code of advertising conduct for the industry next month. It is estimated that direct-to-consumer ads accounted for about $3.8 billion in advertising costs last year.
In its new code, Bristol also called for advertising to "appropriate audiences at appropriate times of the day".
(6/3/05)- Merck & Co. is about to unveil an estimated $20 million ad campaign aimed at improving the company's public image, rather than trying to promote any one of their drugs. Executive of Merck and Oglivy & Mather-Worldwide in New York,, the agency that created the campaign, said that it had been in the works for over 2 years.
The ads will also promote the slogan for which the company wants to have stick in the minds of the consumers, namely: "Merck. Where patients come first." The TV commercials will appear on both network and cable stations. The print ads are scheduled to appear in over 40 national magazines and newspapers. The Internet ads will appear mostly in medical type Web sites such as webmed.com.
Almost half of the ad budget is aimed at promoting Merck's programs to provide some consumers with either free or reduced cost basis medications. The ads will contain the toll free number (1-800-727 5400), and the company's Web site address, (merck.com) that can be called to find out more about the programs.
Since the company had to withdraw Vioxx, its pain killing medication, in September 2004, the company has been on the defensive because of mounting criticism because of its handling of the whole process. This will be a major effort by the company to turn the negative perception that the public has about Merck and the drug industry as a whole.
(5/25/05)- The pharmaceutical industry spent $4.45 billion on advertising to consumers last year, and increase of 27% over 2003 according to TNS Media Intelligence. With Merck's painkiller Vioxx having been removed from the market and Pfizer no longer advertising to the consumer for its pain medications Bextra and Celebrexit is quite possible that there will be a drop in spending by the pharmaceutical companies for their TV ads this year. Of course there is always going to be offsets to this such as Sepracor Inc.'s spending that hopes to elevate its new sleep aid Lunesta to blockbuster status.
Pfizer Inc. is re-evaluating it ad strategy for Viagra since it learned that the prescription rate for the drug did not fall off substantially even after the FDA ordered the company to stop its main TV ads for the drug this fall. The ads had to be pulled after the FDA ruled that they did not fully explain the risks associated with taking the drug, and that the drug over-exaggerated its effectiveness. The ads for Viagra appear only on Hispanic networks right now.
The pharmaceutical industry ranked 11th in TV ad spending by industry last year.
(5/8/05)- The pharmaceutical industry spent about $3.2 billion on direct-to-consumer advertising last year. Does this extensive advertising result in over-prescription of drugs? In a study on this subject, conducted by the University of California at Davis it was found that, "The results underscore the idea that patients have substantial influence on physicians".
In the study that was conducted in 2003 and 2004 all the actresses portrayed patients suffering from symptoms of depression when they visited doctor's offices. In making 298 unannounced visits to 152 doctors the actresses followed one of three possible scripts. In the Group #1 script, the actresses said that they had seen an ad for Paxil, an antidepressant made by GlaxoSmithKline PLC, and asked for it. In the 2nd possible script the actresses said they had seen a TV program about depression and wondered whether a drug would help. In the 3rd scenario the actresses made no request whatsoever for any drug.
In Group #1 doctors prescribed antidepressants 53% of the time, with Paxil constituting 27% of the total. In Group #2 which made a general request about the possibility of being put on an antidepressant, the actresses were given one 76% of the time. In Group #3, wherein the actresses made no request for an antidepressant, they were prescribed one 31% of the time
The report said the findings "sound a cautionary note for direct-to-consumer advertising".
(4/2/05)- In an attempt to diffuse the growing number of complaints against direct-to-consumer ads, Johnson & Johnson said that it would attempt to place greater emphasis on possible negative side effects of some of its drugs. One of its first drugs to show this new philosophy will be its candid campaign for Ottho Evra birth control patch.
One of the ads shows a split-screen image with New York gynecologist Dr. Michelle Francis on one and a young woman on the other. The doctor proceeds to caution the young woman about using the patch because of the risk of blood clots, strokes and other risks. Johnson & Johnson's Chief Executive, William Welldon, who just became chairman of the drug industry's leading trade group PhRMA stated as follows, "If our industry is to retain the important right to talk directly to consumers, each or our companies in its own way must work to make DTC (direct-to-consumers) what it very definitely can be-a way to educate and counsel consumers in improving their health."
Johnson's next drug ad in the new style will be for Ditropan XL, a treatment for urinary incontinence. According to TNS Media Intelligence spending on direct-to-consumer ads rose to $4.44 billion in 2004.
(2/25/05)-According to the AARP Watchdog Report, AstraZeneca spent over $110 million advertising on television for Nexium, its next generation heartburn medication to Prilosec. Please keep in mind that Nexium is the same medication that the then Secretary of Human Services Tommy Thompson said was the same as Prilosec, the AstraZeneca heartburn medication whose patent had expired.
In connection with the determination by the safety panel that was advising the FDA about the COX-2 pain-inhibitors Vioxx, Celebrex and Bextra, the recommendation was made that restriction be placed on any direct-to-consumer ads for these products. To give you a rough idea as to how much was spent on these ads let us look at the latest figures available. Merck spent $78 million advertising Vioxx in 2003 and $72 million during the first nine months of 2004 before the drug was removed from the market according to TMS Media Intelligence. Pfizer spent $87 million on Celebrex advertisements in 2003, and$71 million during the first nine months of 2004.
The question is still open as to whether or not Merck will ask the FDA to be able to re-introduce Vioxx to the marketplace, and if it does asks for the reintrodution permission, what restrictions will be placed on the label for the drug. The next question that needs to be answered if the drug is allowed to be introduced is what type (if any), direct-to-consumer ads be allowed for the drug. It is also unknown at this time the exact extent of the restrictions that will be placed on Pfizer in trying to advertise for both Celebrex and Bextra.
(12/30/04)-The drug companies have spent over $3.8 billion in promoting their products over the last 12 months. That sum is greater than Coca-Cola, Pepsi-Cola and Cadbury spend combined each year to sell their soft drinks. In February 2002, 25% of consumers responding to the PharmTrends study said an ad had prompted them to discuss with their doctor the drug being described in the ad. Interestingly enough that number had dropped to 19% by February 2004, and has stayed at that level in the survey done 6 months later. Are the consumers beginning to question the validity of the media ads that they are seeing in connection with brand name drugs?
Pfizer, which recently agreed to suspend all advertisements for its COX-2 inhibitor pain medications Celebrex and Bextra, spent $87.6 million in advertising Celebrex in 2003. Merck which has stopped selling and advertising its COX-2 inhibitor pain medication Vioxx, spent about $78 million on advertisements for the drug this year, before the suspension took place.
AstraZeneca has spent more than $200 million in major advertising campaigns for its acid reflux medication Nexium. Nexium is the next generation drug to replace Prilosec, which went off patent protection, a couple of years ago, and can now be bought as an over-the-counter medication. Nexium is the same drug that former secretary of health and human resources Tommy Thompson should not be prescribed for by a physician because it was so similar in chemical composition to Prilosec. Because of this large advertising campaign Nexium is the 7th best selling drug in this country.
According to TNS Media Intelligence/CMR, the three major networks nightly news programs in this country received $110 million of their ad revenue from prescription medication spots. The same organization's figures show that direct-to-consumer pharmaceuticals are the 10th largest industry category in U.S. advertising in 2003.
(12/07/04)-An interesting battle is taking place in Germany between Pfizer Inc. and German health and insurance authorities concerning both the ability of a drug company to advertise its product in Europe, and also in regard to the ability of the government to regulate the price that may be charged for a drug. The drug involved in this particular case is Lipitor, the cholesterol lowering medication of Pfizer that is the largest selling drug in the world. Lipitor is sold under the name of Sortis in Germany.
Pfizer has taken out full-page ads in German newspapers to argue its case for the drug, and in so doing is flouting the law that forbids drug advertising in Europe. Pfizer announced that it intends to sue Spitzenvergaende der Krankenkassen (SdK) which is an association of health insurers in Germany. Under German law a reference price is set for a class of drugs that sets the price for a drug to be sold at. In the case of Sortis that price is 38% less than what Pfizer feels what the price of the drug should be. The company feels that its drug is better than the other statin drugs and should therefore be entitled to sell at a higher price than the others.
Pfizer also argues that the drug falls under an exception in the German drug law that protects innovative medicines. The company argues that the inclusion of the drug in the general reference price for all statins by the Gemeinsamer Bundesausschuss, the public health body that sanctioned the inclusion of Sortis in the fixed-reference scheme was incorrect.
Sortis generated EUR370 million in sales during the first nine months of the year in Germany. Drug companies face a major problem with their pricing in Europe where one country in the European Union may reimport a drug that sells for a much cheaper price in another member nation than another. In Germany, pharmacies are bound by law to purchase a minimum of 7% of their stocks through imports.
A court in Baden-Wuerttemberg forced Pfizer to amend the wording in its ads and ordered the company to pay EUR10, 000 fine for breaching the drug advertising restriction law. The German Institute for Quality and Visibility in Health Care stated that "there is no proof of Sortis' medicinal suuperiority compared to other comparable medications."
(11/25/04)-Did you ever wonder why a prescription drug ad does not mention the condition that the drug is intended to treat? There is a simple answer to this question, and the answer shows just another reason why the law, especially as it pertains to direct-to-consumer advertising, has to be revised. There are times when you are left wondering what the particular condition may be that the ad is referring to.
If an ad does not mention the condition that it is intended to treat there is no requirement for the ad to mention the adverse side effects of the drug. These ads are known as "reminder ads" were in the news lately in connection with Pfizer's ads for its erectile dysfunction drug Viagra. Pfizer has agreed to withdraw the ad in connection with Viagra that began with the comment: "Remember that guy who used to be called 'Wild Thing'? The guy wanted to spend the entire honeymoon indoors?
This ad began appearing on tv and in the media in August. The FDA's division of drug marketing, advertising and communications objected to the language in the commercials. If the ad had mentioned a specific treatment along with the brand name, the adverse side effects and other disclaimers would have had to be included in the ad.
(10/19/04)-First came Merck's Vioxx, now we have Pfizer warning doctors that its best selling next generation painkiller, Bextra, could increase the risk of heart attack or stroke in patients who have undergone coronary artery bypass surgery. Both medications are in the same class, COX-2 inhibitors. In each year from 2001 to 2003, over 50 million prescriptions were written for the COX-2 inhibitors. (Information taken from a chart appearing in the Oct 16, 2004 NY Times, page C1.)
Total sales in this class of drugs exceeded $6 billion in 2003. Now this whole class of drugs is under suspicion. In fact, the Food and Drug Administration announced that they would convene a panel of independent experts in January 2005 to review this issue and make recommendations, which are usually followed by the FDA.
Pfizer made it clear in its warning to doctors that the problems with Bextra were not the same as the one with Merck's Vioxx. The other major drug in this class is Celebrex which carries the warnings/precaution statement "risk of GI ulceration, bleeding and perforation" and suggests that a physician "monitor blood, hepatic and renal function with chronic use…[C]aution with history of peptic ulcer disease and GI bleeding, asthma, dehydration, fluid retention, HTN, heart failure… [B]orderline evaluations of liver enzymes may occur. Fluid retention and edema reported. (PDR Concise Prescribing Guide, April 2004.) Could it suffer a similar fate as Vioxx?
The company (Pfizer) has issued a denial saying more study is need on this matter..
Interestingly, Dr. Sandra Kweder, acting director of the FDA’s office of new drugs, stated that "neither Celebrex nor Bextra had been proved to be any better than older medicines like ibuprofen at guarding against stomach bleeding, a benefit often cited with these drugs, and neither have been proved to be any better at relieving pain than older drugs. (NY Times Oct. 16, 2004, page C4, "Pfizer Warns of Risks from Its Painkiller".)
Dr. Garrett FitzGerald, a University of Pennsylvania cardiologist and pharmacologist, wrote in the New England Journal of Medicine that we should not pull these drugs from the market because they are useful for certain patients. At the same time, he questions why Merck did not publish the data they had on Vioxx.
This brings us to an issue that is now first being addressed. The issue is related to what studies are being published and who has access to company-sponsored research studies. Dr. John Abramson, writing in his book "Overdo$ed America*" (p. 105) states "Often the medical researchers who carry out company-sponsored studies are not even allowed to see all of the data from studies they are working on.
These researchers are left in the position of analyzing and including in their articles only the data that drug or device manufacturers have allowed them to see…[O] ne researcher quoted in the article (NEJM May 2000) explained that controlling access to the data allows drug companies to ‘provide the spin on the data that favors them’". Now some pharmaceutical companies are planning to reveal some of their entire database on drugs in research. This means that researchers will get a chance to view all studies, both positive and negative.
The second issue relates to direct-to-consumer prescription drug advertisements of some drugs, which may not have an overall greater benefit than older drugs. According to the NY Times of Oct 13, 2004, "AstraZeneca spent $257 million on television and other mass-media advertising aimed at Nexium (the nations most widely advertised drug, approved by FDA in 2001 as a treatment for severe reflux disease) users last year. This is almost as much as spent on advertising the Acura and Saturn line of automobiles.
It has been 7 years since the FDA lifted strictures against mass-media ads and this industry has grown to a $3.8 billion-a-year business. There are those who blame these expenditures for pushing up spending on pricey drugs, which then attributes to the double digit inflation in nations healthcare costs. Others will tell you that it is the drug industry providing free samples to doctors that is a major factor in rising costs and that consumers need the information provided in mass-media advertising. In fact there is a proposal before the FDA attempting to further loosen the rules about advertising to make them more reader friendly. (It is especially hard to read the small print that accompanies these ads.)
A former commissioner of the FDA, Dr. David A. Kessler, who left the FDA before the relaxing of advertising rules, is quoted as saying that consumer-directed drug advertising "works best if the benefits of use outweigh the risks of overuse…(but too many of the ad campaigns) are about increasing use, which is about increasing sales".
A confounding factor is that the patient comes to the doctor requesting a certain prescription drug by name. The doctor does not want to alienate the patient or is pressed for time in today's health care delivery system to explore fully the alternative treatments. Advertising creates the impression that newer is better. In many cases this may be true in terms of range of side effects, but what about cost effectiveness as a factor?
This nation is going to have to deal with the safety of the newer drugs in the long run. Any new drug needs to have built into the research study a cost-benefit ratio and be tested against older medications before it is allowed to enter the mass market.
FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "HOW TO SELECT A NURSING HOME"
Allan Rubin and Harold Rubin, MS, ABD, CRC, Guest Lecturer
updated November 7, 2013