Teamsters v. Pfizer

May 1, 2006
Ron Feemster
Pharmaceutical Executive
Volume 0, Issue 0

The world's largest drug manufacturer must answer off-label promotion charges brought by a new adversary. Not FDA, with its warning letters and threats of marketing sanctions, and not the Office of the Inspector General (OIG) at Health and Human Services, which often sues for fraud, forces huge settlements, and requires companies to do business under restrictive corporate integrity agreements. Instead, the company faces a class-action civil suit from insurance companies and union welfare funds, groups that, until recently, Pfizer regarded primarily as customers-or at least people who picked up the tab for customers. Now, led by the Welfare Fund of a Teamsters local from New Jersey, third-party payers are suing under RICO, the Racketeering Influenced and Corrupt Organizations Act. If their suit is successful, payers who have covered billions of dollars worth of Lipitor (atorvastatin) over the past five years will receive treble damages for the cost of off-label prescriptions. The suit may also attract..

The world's largest drug manufacturer must answer off-label promotion charges brought by a new adversary. Not FDA, with its warning letters and threats of marketing sanctions, and not the Office of the Inspector General (OIG) at Health and Human Services, which often sues for fraud, forces huge settlements, and requires companies to do business under restrictive corporate integrity agreements. Instead, the company faces a class-action civil suit from insurance companies and union welfare funds, groups that, until recently, Pfizer regarded primarily as customers—or at least people who picked up the tab for customers. Now, led by the Welfare Fund of a Teamsters local from New Jersey, third-party payers are suing under RICO, the Racketeering Influenced and Corrupt Organizations Act. If their suit is successful, payers who have covered billions of dollars worth of Lipitor (atorvastatin) over the past five years will receive treble damages for the cost of off-label prescriptions. The suit may also attract the attention of OIG, because the plaintiffs are claiming that Pfizer's off-label marketing "scheme" defrauded Medicare and Medicaid. All in all, this is a very complicated lawsuit. So it is worth asking—and at least trying to answer—a few basic questions. Here are some things we wondered about when we read the complaint filed in The Welfare Fund of Teamsters Local 863 v. Pfizer Inc.

All of the Lipitor prescriptions referenced in this lawsuit were written to lower LDL cholesterol.How can anyone call that off-label prescribing?

Read the label. The Lipitor label contains prescribing guidelines known as the ATP III guidelines—the Adult Treatment Panel III guidelines—which were developed by the National Cholesterol Education Panel, a group affiliated with the National Heart, Lung and Blood Institute. Based on two factors—a patient's risk of heart disease and how high the patient's cholesterol count is—the guidelines (on the label) recommend different courses of treatment. People with high risk of heart disease and high cholesterol go on statins like Lipitor from the beginning. But patients with low risk of heart disease and only moderately high cholesterol generally start out with TLC—therapeutic lifestyle changes, including diet and exercise. The lawsuit turns on these low-risk patients. The Teamsters Welfare Fund alleges that Pfizer orchestrated a far-reaching marketing campaign to convince doctors to write Lipitor prescriptions for persons at low risk of heart disease and moderate LDL cholesterol counts, whose first line of treatment would ordinarily include diet and exercise, not statin therapy. More precisely, the Lipitor label states that statins are the recommended therapy for patients with cholesterol at 130 mg/dL and two or more risk factors (such as age, smoking, hypertension, low high-density-lipid cholesterol—low HDL-C—and a family history of early coronary heart disease) if they have a 10-to-20-percent chance of suffering coronary heart disease (CHD) within the next 10 years.

However, if a patient has cholesterol of 130 mg/dL, two or more CHD risk factors, and less than a 10-percent chance of heart disease, the recommended first line of treatment is TLC. The LDL-C level "at which to consider drug therapy," for these patients, according to the label, is 160 mg/dL. When the Teamsters say Pfizer marketed Lipitor off-label, they mean that the company encouraged doctors to write Lipitor prescriptions for low-risk patients whose cholesterol is between 130 and 160 mg/dL. That is the basis for the Teamsters' fraud claim.

Whom did Pfizer harm?

No patients were harmed by off-label Lipitor prescriptions. But the Teamsters Welfare Fund, like other insurers who paid for the prescriptions, suffered financial harm when they paid for Lipitor prescriptions that, according to the complaint, never would have been written had Pfizer not marketed the drug off-label.

"Insurance companies traditionally do not require, when a GP prescribes Lipitor, a check to see if a person's cholesterol is 160," says Geoffrey Jarvis, an attorney for the plaintiffs. "The system isn't set up to sort of have that kind of Big Brother aspect to it." And Pfizer, according to the plaintiffs, took advantage of the fact that no one checked. "They got doctors to prescribe it to people who really, it's not called for," Jarvis says.

How badly did Pfizer harm payers?

Lipitor brings in about $12 billion in global sales every year, according to the complaint. But damages in this lawsuit will depend on domestic sales, which are not listed in the document. According to IMS Health, Lipitor sales came to $8.4 billion in 2005, $7.75 billion in 2004, $6.8 billion in 2003, $6.1 billion in 2002, and $5.2 billion in 2001. According to the plaintiffs, a significant percentage of the prescriptions were written off-label. Presuming that the plaintiffs succeed in certifying a national class for the lawsuit, the stakes are very high.

"We believe the damage comes to several billion dollars," says Jay Eisenhofer, lead attorney for the plaintiffs. "If it is $1.5 billion or $3 billion I'm not sure. We believe it is something like $300 million to $500 million per year for four or five years, which is how we arrived at the $1.5 to $3 billion."

Don't many third-party payers just refuse to pay for off-label use?

In fact, they do. Doctors can write any drug off-label, but insurance companies can simply refuse to cover it. In many cases, they don't even need to see the indication. For many drugs, they can tell from the dose alone. The case of a 26-year-old schoolteacher in New Jersey is typical. After recovering from a benign brain tumor in childhood, the teacher, who does not want her name used in print, suffers as an adult from chronic debilitating migraines. Her doctor prescribes Imitrex (sumatripan) on a daily basis, which is the most effective course of treatment.

However, Imitrex is only indicated for sporadic migraines on-label, so prescribing 30 doses per month—instead of 10—tips off the insurance company that the prescription is written off-label, and the payer can decline claims for all but 10 pills a month. The teacher, who earns $41,000 per year, can either pay $400 per month for the 20 doses that are not covered by her insurance, or she can suffer migraine headaches two out of three days.

The Lipitor case is slightly more complicated. Unless the patient is hospitalized for acute coronary syndrome, payers often require doctors to certify that cheaper therapies—like a 60-day trial on another drug—have failed before approving Lipitor. Claim forms often reprint the ATP III guidelines.

Why didn't third-party payers suing Pfizer just deny the claims?

Asked why the Welfare Fund couldn't have used step-therapies and restrictive formularies to protect themselves from off-label prescriptions, Eisenhofer acknowledges that they could have.

"And I guarantee you that Pfizer will argue that they should have," Eisenhofer says. "But that doesn't absolve Pfizer from their responsibility. Pfizer will point the finger and say that the health and Welfare Fund should be responsible."

Eisenhofer makes this point explicitly in the legal complaint: "Not knowing that Pfizer was engaged in a massive fraudulent scheme to cause the over-prescription of Lipitor, Plaintiffs did not take the necessary steps to ensure that the drug was not being over-prescribed."

The plaintiffs say Pfizer recommends Lipitor for all patients with two or more CHD risk factors and less than a 20-percent risk of heart disease, if lifestyle changes don´t cut their LDL-C below 130. (Those two groups are highlighted in blue and yellow above.) The problem? The Teamsters argue that the drug´s label specifically states that the yellow group-those with less than a 10 percent risk-need no drug therapy, even if their LDL-C is 160.

And shortly thereafter: "Specifically, Pfizer exploited the fact that third-party payers were unaware of Pfizer's illegal marketing scheme, did not realize the potential for over-prescription caused by Pfizer's actions, and therefore did not take precautionary measures for drugs with a danger of being over-prescribed."

What specifically do the plaintiffs accuse Pfizer of doing?

In short, the complaint charges that Pfizer concocted a marketing plan—the plaintiffs call it a "scheme"—to convince pharmacy benefit managers to include Lipitor on formularies for off-label indications, to convince doctors to write Lipitor prescriptions for patients at low risk of heart disease, and to move consumers to request Lipitor when less aggressive therapies were appropriate. In effect, the plaintiffs contend that Pfizer intended to expand the market for Lipitor to include patients whose LDL cholesterol score fell between 160 and 130 mg/dL, who had two or more risk factors for coronary heart disease, but whose risk of developing coronary heart disease within the next 10 years was less than 10 percent.

Specifically, Pfizer created a variety of marketing materials, according to the complaint, including "training slides, computer software programs, Internet programs, health fair programs, leave- behind materials, and visual aids," all of which made misleading claims. "For all of these target populations," the complaint states, "the same false message, contrary to Lipitor's FDA-approved label and ATP-III's recommendations, was created." This message was that ATP III recommends drug therapy for all patients with multiple risk factors, regardless of their 10-year risk of contracting heart disease, provided that their LDL levels exceeded the "goal" of 130 mg/dL.

All of Pfizer's marketing materials emphasize getting to "goal," LDL cholesterol 130, say the plaintiffs, who call this off-label promotion.

Isn't this a fairly fine point? After all, the company is not marketing the drug for completely different indications, such as inflammation or brain tumors.

The plaintiffs see Pfizer blurring a line that, in their view at least, is clear on the label. In many cases, the company does not single out the group of otherwise similar patients with cholesterol values between 130 and 160 mg/dL. Instead, the company includes them in a larger group of patients. On one training slide, for example, Pfizer states: "For patients with less than a 20 percent risk, drug therapy may be considered after lifestyle changes have failed to achieve LDL goal." In fact, for a large group of these patients, those with a risk factor of less than 10 percent, that statement is incomplete if not false, the plaintiffs contend. Drug therapy is only recommended for such patients if their LDL-C equals 160 mg/dL.

How did Pfizer market to doctors?

Pfizer targeted physicians "with outreach programs, speaker events, sales calls, and computer software to mislead doctors about the FDA-approved uses of Lipitor," Eisenhofer alleges in the complaint. "For example, Pfizer's Lipitor 2002 US Operating Plan (Operating Plan) laid out the Company's illegal scheme." According to that document, plaintiffs claim, Pfizer's primary concern when communicating to healthcare professionals about Lipitor was to hammer home Pfizer's "Get to Goal Message."

Pfizer is likely to maintain that the meetings and events for doctors were simply education programs, and that much of the information relies on studies that show benefit to patients. Presenting a third-party study is legal, provided that the company's motive is pure.

"The devil is always in the details," says Michael Loucks, a first assistant US Attorney in Boston who investigates off-label marketing. "There are all kinds of questions that an investigator would ask. The same act can be criminal or non-criminal depending on the purpose and the intent of the person doing it. The same principles of criminal law are true for all criminal statutes, including off-label promotion. If the purpose in holding a conference is to promote the product off-label, for an indication the company knows it doesn't have [FDA] approval for, and it's done in a variety of different ways, then the company may have a problem."

The plaintiffs accuse Pfizer of improperly utilizing third parties to promote its "fraudulent scheme." How did that work?

The plaintiffs maintain that Pfizer "fully funded" the Emerging Science in Lipid Management (ESLM) and the National Lipid Education Council (NLEC) "to fraudulently promote the off-label use of Lipitor. (NLEC changed its name in 2006 to the Committee on Cardiovascular and Metabolic Disease.)

These organizations produce and distribute a variety of continuing medical education programs that "repeatedly distorted the line between on and off-label use of Lipitor,"according to the complaint.

"I believe they are allowed to distribute third party materials," Eisenhofer says. "But I don't think they can go and pay somebody to create information, publicize it, and then claim that it is the work of third parties. This is what we are accusing them of doing."

Dr. Antonio M. Gotto , the dean of Weill Cornell Medical College, is chair of both ESLM and NLEC. He says ESLM is fully funded by Pfizer, but that Abbott and Reliant, among others, also fund NLEC, all by unrestricted educational grants. Gotto denies that either organization promotes the use of Lipitor beyond the treatment guidelines.

" Pfizer is a big target because Lipitor is the number-one selling drug in the world," Gotto says. "These are primarily insurance companies that are connected with the Teamsters union, and so they see this as an opportunity to try to recover some money that was spent on providing medication for their [members]."

If the suit goes forward, Gotto says he will be ready to testify. "I would be happy to defend in court the material in our publications with regard to educating physicians about the proper use of statins in lipid management, and how they are entirely consistent with the guidelines."

What the Lipitor Label Says

The Lipitor label incorporates the ATP III (Adult Treatment Panel III) prescribing guidelines, which can be found in the Third Report of the National Cholesterol Education Program (NCEP) Expert Panel on Detection, Evaluation, and Treatment of High Blood Cholesterol in Adults.

The guidelines recommend drug therapy at certain LDL cholesterol (LDL-C) levels based on the number of coronary heart disease (CHD) risk factors a patient has. The more risk factors, the lower the cholesterol level at which drug therapy begins. But for patients with two or more risk factors, the label also uses the percentage risk of developing CHD in the next 10 years to determine the LDL-C level at which drug therapy starts. If risk is less than 10 percent, drug therapy starts at 160 mg/dL. If it's greater than 10 percent but less than 20 percent, therapy starts at 130 mg/dL.

Why is this a RICO lawsuit?

The Racketeer Influenced and Corrupt Organizations (RICO) Act, which was passed in 1970 to prosecute conspiracies by organized crime, is frequently used in civil litigation because it offers big payouts—treble damages—to parties harmed by business practices that can be construed as mail or wire (telephone) fraud.

"Pfizer violated the statute," says Jay Eisenhofer, the lead attorney for the plaintiffs. "RICO is a means to compensate people when there's a violation of civil law."

But as Geoffrey Jarvis, another partner at Grant & Eisenhofer, PA, explains, RICO is a common way to build a nationwide class for a class-action suit. "Fraud is a common-law claim in the United States," he explains. "There is no national fraud law. Every state has its own." Jarvis assures us that he—and the Teamsters—do not see Pfizer as a bunch of racketeers: "We're not calling them the Mafia, no." The attorneys are also filing in state courts, in case the national class is not certified.

Thank You for Prescribing

What does Pfizer think about this lawsuit? Good question. We spoke to company spokesman Bryant Haskins about the suit the day it was filed, and just before press time, we asked him some follow-up questions about Pfizer's alleged off-label marketing. Here are some excerpts from those conversations.

Pharm Exec: The plaintiffs say in a nutshell that Pfizer is promoting the use of Lipitor for cholesterol levels that are below those specified on the label, which is taken from the ATP III guidelines.

Haskins: Well I think the ATP III are guidelines. And we always recommend that patients consult with their doctors and determine what is the best approach for them to take regarding any of our drugs, and particularly for Lipitor for cholesterol reduction. That's a decision to be made between them and their doctors. Are they claiming that the doctor has no position as far as prescribing medicine to patients?

No. Quite the opposite, I think. They are saying that you are trying to influence doctors to prescribe at cholesterol levels lower than the label recommends.

Our position has always been that patients should consult with their doctors to determine the appropriate treatment for them as individuals.

But they would say, fine, instead of influencing patients you decided to influence doctors.

They're not giving much credit to the doctors, are they?

No, they're not. But that's what they're saying: Pfizer recognizes that the doctor-patient relationship is a very powerful one, and that doctors influence their patients. So Pfizer sets out this big elaborate—the attorneys call it a "scheme"—to influence doctors. And you do spend a lot of money influencing doctors. They're your customers, right?

Yes. But that doesn't mean we're influencing them unduly. And I can't get into addressing specific allegations of this lawsuit. Other than to say that we would strongly disagree with many, if not most or all, of the points that they make in the lawsuit. But beyond that, we're not going to get into talking point by point. We never do that with litigation that's in progress.

[And later via email:]

We're finishing a piece about the Teamster's allegations that Pfizer marketed Lipitor off-label. We'd like to give you a chance to comment [further].

It is important to point out that this lawsuit isn't about personal injury to patients and, in fact, none is alleged by plaintiffs. Nor is there any evidence that patients failed to benefit from taking Lipitor.

What this case is really about is insurers who are trying to substitute their judgment for the judgment of prescribing physicians who are in the best position to make decisions about the type of medical treatment their patients receive.

Thank you. I can use the comments. And I will. But obviously, your comments do not take on the central allegation of the class-action lawsuit—that Pfizer's marketing intended to focus physicians on the benefits of writing Lipitor for patients who probably don't need it as a first-line therapy. I think I would be within my rights to say that you offered these remarks instead of commenting directly on the allegations in the complaint.

[via Blackberry] Thanks.