Technology

Pfizer's Latest Growing Pains


The drug human growth hormone, one of the most tightly regulated substances on the market, is proving to be a thorn in the side of Pfizer (PFE). BusinessWeek has reviewed internal documents that shed new light on allegations that Pharmacia, a company Pfizer acquired in 2003, improperly promoted its drug Genotropin to doctors who intended to use it as an anti-aging treatment. Synthetic versions of human growth hormone are made and marketed by pharmaceutical companies. It is illegal for these manufacturers to promote the hormone for anti-aging use, which is not approved by the U.S. Food & Drug Administration.

BusinessWeek was shown the documents by Dr. Peter Rost, a former Pharmacia executive, who filed a civil whistleblower suit against Pharmacia and Pfizer in U.S. district court in Massachusetts in 2003. The suit was unsealed in November, 2005, after the U.S. Justice Dept. declined to intervene. But Rost is continuing to pursue the suit with the help of private counsel.

Pfizer has filed a motion to dismiss the suit, arguing that both Pharmacia and Pfizer had acknowledged that there were problems and had sought to address them. Rost's lawyer plans to file a response on Mar. 9. Separately, Pfizer's most recent 10K, filed Feb. 28, says there are ongoing Justice Dept. investigations regarding the marketing of Genotropin.

It isn't clear if these investigations are related to the allegations in the whistleblower suit. But Rost says that after he filed the suit, he was interviewed by the Justice Dept., the FBI, and the FDA's enforcement division. He says he has testified twice as a grand jury witness in a criminal investigation being pursued by the U.S. Attorney's office in Boston.

LEGAL TANGLES. The legal tangles could have broad reverberations. The documents BusinessWeek examined suggest that Fred Hassan, former CEO of Pharmacia, may have been aware of efforts in the company to encourage the improper promotion of Genotropin. Hassan is currently head of Schering Plough, which is not part of the investigations.

Ever since the U.S. Food & Drug Administration approved human growth hormone (HGH) to help abnormally short children grow in 1985, HGH has been under heavy scrutiny. It has been approved by the FDA to treat some rare conditions in adults, including growth hormone deficiency, which turns up in a lot of diagnoses made by anti-aging doctors. But there are no definitive guidelines for diagnosing the deficiency, and the drug clearly isn't approved to ward off aging.

In 1991, Congress made it illegal for anyone, including physicians, to distribute HGH for any reason other than to treat a disease. Nevertheless, a growing number of anti-aging doctors and online pharmacies have been touting the drug as a tool for boosting memory, heart function, muscle mass, and generally turning back the hands of time. The U.S. government is concerned: The number of HGH-related cases pursued by the FDA's office of criminal investigations ballooned from 12 in 2000 to 55 last year.

"STRATEGIC ALLIANCE." In January, 2000, as the government's concerns about HGH were rising, a memo landed on Hassan's desk. Sent by Dr. William Abelove of the Renaissance Longevity Center in Florida, the letter opened by saying, "The Renaissance Longevity Center is initiating the most aggressive ethical campaign ever launched for the marketing of human growth hormone...." It went on to suggest a "strategic alliance" with Pharmacia. Handwritten notes at the top of the memo indicate that Hassan passed the letter on to members of his marketing staff with instructions to "follow up."

Rost alleges that the memo and other internal documents that are part of his case prove that the companies knowingly marketed HGH to anti-aging doctors. By law, drug companies are forbidden to market any drug for so-called off-label use. But the additional criminal restrictions on HGH make it particularly sensitive. "This is an anti-aging doctor saying that he's going to put a lot of money behind promoting [Pharmacia's] formula," says Rost. "Hassan...should have known. It's very illegal."

Hassan left Pharmacia right when Pfizer acquired it in 2003. In response to a request for comment, Schering spokesman Stephen Galpin said: "Fred Hassan is prevented from commenting on this or any other issue pertaining to the former Pharmacia under a confidentiality agreement with Pfizer." But other executives who were close to Hassan say that he did nothing improper.

Goran Ando, who was vice-president of research under Hassan at Pharmacia -- and who was hand-copied on the Abelove memo -- warns against attaching too much significance to Hassan's instructions. "He passed along virtually every memo," says Ando, now a board member of several companies in Britain. As for associating with anti-aging centers, Ando says, "We tried to discourage it."

RISK REDUCTION. Documents reviewed by BusinessWeek suggest that executives below Hassan pursued a relationship with Abelove -- and were aware of the legal implications of doing so. In February, Abelove sent a letter, copied to a total of eight Pharmacia executives, describing what would be on the agenda at an upcoming meeting. Among other topics, Abelove wanted to discuss "the ability for the Abelove Longevity Centers to purchase growth hormone at quantity discounted prices."

Soon after, Pharmacia received legal advice on this matter from the law firm Morgan, Lewis & Bockius. The firm sent a confidential memo to Pharmacia's corporate counsel outlining the "regulatory and legal implications of possible arrangements with Renaissance Longevity Centers." The six-page memo, examined by BusinessWeek, lays out various legal risks inherent in providing the drug at a discount to Abelove's practice. It may be viewed, the memo says, "as an improper incentive that encourages physicians to overutilize the drug, which could be found to be a violation of the Medicare/Medicaid Anti-kickback statute."

The lawyers had every reason to be fastidious. In 1999, Genentech pleaded guilty to a federal criminal charge that it improperly promoted its growth hormone. It paid a $50 million fine. The February, 2000, memo to Pharmacia from Morgan, Lewis & Bockius references the Genentech action in a section labeled "FDA Enforcement Risks."

It advises that Pharmacia reduce the risk by ensuring that physicians not receive "cash payments or free goods as a result of conducting any research studies." An assistant to Stephen Paul Mahinka, one of the attorneys who wrote the memo, said in a voice mail that Pfizer's internal policies prevent outside counsel from talking to reporters.

ALLEGATIONS ADDRESSED. Documents show that in May, 2000, Abelove signed a consulting contract with Pharmacia to pursue a broad range of activities related to HGH, including reviewing marketing strategies, attending meetings on growth hormone, and educating Pharmacia employees on the adult growth-hormone market. The contract included a promise of a $50,000 payment. It's unclear if Abelove got a price break on Genotropin. Abelove, who is a practicing physician in Miami and Weston, Fla., with a strong interest in anti-aging, declined to comment on the contract because of a confidentiality agreement with Pharmacia.

Pfizer and Pharmacia addressed Rost's allegations in a motion to dismiss the whistleblower suit. The suit is a False Claims Act civil action that alleges Pharmacia marketed Genotropin for off-label uses, which were billed improperly to federal health plans. Pfizer's motion argues that the court lacks jurisdiction over Rost's claims because Pfizer and Pharmacia disclosed the allegations to the government and had started investigating them before Rost filed the complaint.

Pfizer says Pharmacia took corrective actions in 2002, including terminating all discount contracts for Genotropin. The issues "were corrected by Pharmacia and later by Pfizer, and Pfizer voluntarily disclosed them to the government as soon as it was possible to do so," says Paul Fitzhenry, a spokesman for Pfizer. Abelove is not mentioned by name in Pfizer's court filings, but Fitzhenry says "the Abelove contract was terminated before Pfizer acquired Pharmacia."

The U.S. government's decision to pass on the civil case does not preclude the government from investigating Rost's allegations on criminal grounds. Rost says he has been interviewed by Assistant U.S. Attorney Susan Winkler in Boston. A spokeswoman for the U.S. attorney's office there declined to comment.

LEGAL JABS. Rost, admittedly, has an ax to grind with Pharmacia and Pfizer. Pfizer fired him late last year after the case was unsealed, prompting him to counter with a wrongful termination suit. And Rost has a history of fighting the drug industry: He once alleged tax violations on the part of international staff of his former employer, Wyeth (WYE) (the case was settled for undisclosed terms). And in 2004 he had a public war-of-words with Pfizer over drug reimportation.

Rost's allegations regarding Genotropin extend far beyond what Pharmacia might have been planning with Abelove's Longevity Center. His whistleblower suit also alleges that Pharmacia used a research program as a vehicle to reward physicians for prescribing Genotropin, and that the company improperly paid for anti-aging doctors to attend meetings at chic resorts, where discussions related to off-label promotion of Genotropin were conducted.

In its motion to dismiss, Pfizer says it disclosed all Genotropin issues to the government before Rost filed the whistleblower suit. As for allegations that false claims were filed for payment by federal health plans for Genotropin, the motion says Rost "utterly fails to identify a single false claim submitted to any federal health care program." As the drug giant and its former employee trade jabs, human growth hormones used as anti-aging treatments are certain to remain under the microscope.


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