BrandweekNRX

U.S. Court tries to shut down whistleblower site Wikileaks and fails.

Wikileaks, a website designed to let whistleblowers publish sensitive documents has been ordered shut down by a US federal judge at the request of a Swiss bank and its Cayman Islands subsidiary.

But the the court has failed to shut down the site, because the order is to remove the DNS hosting records, so that even though this prevents the www.wikileaks.org link from working, it doesn't actually take down the site: everything is up and running at 88.80.13.160 and this information is now spreading like wildfire on the Internet.

Some pundits have stated that "taking something off the Internet is like taking pee out of a pool," and this latest, extraordinary, attack on free speech in the U.S. (by ordering deletion of an entire site to stop circulation of a few documents) is giving Wikileaks a PR boost the Cayman Island bank lawyers clearly had not expected.

To find an injunction similar to the Cayman's case, we need to go back to Monday June 15, 1971 when the New York Times published excepts of of Daniel Ellsberg's leaked "Pentagon Papers" and found itself enjoined the following day. The Wikileaks injunction is the equivalent of forcing the Times' printers to print blank pages and its power company to turn off press power. The supreme court found the Times censorship injunction unconstitutional in a 6-3 decision.

The order was written by Cayman Island's Bank Julius Baer lawyers and was accepted by judge White without amendment, or representations by Wikileaks or amicus. The case is over several Wikileaks articles, public commentary and documents dating prior to 2003. The documents allegedly reveal secret Julius Baer trust structures used for asset hiding, money laundering and tax evasion. The bank alleges the documents were disclosed to Wikileaks by offshore banking whistleblower and former Vice President the Cayman Island's operation, Rudolf Elmer.

Unable to lawfully attack Wikileaks servers which are based in several countries, the order was served on the intermediary Wikileaks purchased the 'Wikileaks.org' name through -- California registrar Dynadot, who then used its access to the internet website name registration system to delete the records for 'Wikileaks.org'.

Judge White ordered the California web hosting company Dynadot to "immediately clear and remove" records from Wikileaks and "prevent the domain name from resolving to the wikileaks.org website or any other website or server other than a blank page," until the court can review the case further.

Wikileaks was launched in early 2007 with the help of Chinese dissidents to help whistleblowers in authoritarian countries post sensitive documents on the Internet without being traced. It was aimed at "oppressive regimes in Asia, the former Soviet bloc, sub-Saharan Africa and the Middle East," but also was being used to post "unethical" behavior in Western countries.

Despite the injunction, Wikileaks states that it will "keep on publishing, in fact, given the level of suppression involved in this case, Wikileaks will step up publication of documents pertaining to illegal or unethical banking practices."

Wikileaks is still publishing in Belgium and, Christmas Island - the latter offering its many "cover names". Dr. Rost is a pharma litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower.

Schering-Plough statisticians reviewed raw study data already in April 2006. "That is the key irregularity," says Eric Topol, a respected cardiologist.

The NJ Star Ledger today has a very intersting review article on the Vytorin-study debacle. Here are a few excerpts (full article here):

The most troubling shortcoming, the experts said, came when Schering-Plough's statisticians reviewed some raw study data in April 2006 before the examinations of all 750 volunteer test subjects at 11 sites around the globe were complete.

Critics protest the statisticians may have had a hint of the study's disappointing outcome.

"That is the key irregularity," said Eric Topol, a respected cardiologist and director of the Scripps Translational Science Institute, in La Jolla, Calif., who criticized the study's "poor organization, poor planning."

The experts point to four critical flaws with the study:

Schering-Plough's statisticians reviewed preliminary results before the study was complete, a medical research taboo because it may have revealed the disappointing results months in advance of their formal release. Several company executives sold millions of dollars of stock last summer. Schering-Plough denies any wrongdoing.

In a break from standard research procedures, no outside scientists supervised the study or monitored the safety of the clinical trial subjects.

The study used a new ultrasound procedure to measure plaque at difficult-to-read sites on the carotid artery in the neck, but there was no procedure in place to handle faulty images when they occurred.

The people selected for the study did not have abnormal amounts of plaque in their arteries to begin with, setting a high hurdle for Vytorin to reduce it.

What should have taken a few months to read the images and compile the results turned into an 18-month project. In fact, the ultrasounds of the carotid artery in the neck were so inconsistent Merck and Schering-Plough briefly changed the study's endpoint, or goal, to measurement of plaque in the femoral artery in the leg.

The change prompted an outcry from the cardiology community, which resulted two months later in the companies announcing they would continue to work through problems with the carotid images.

Congressional and state probes are focused on delays in the release of the trail results -- and whether Schering-Plough executives profited from advance knowledge of the results.

The company said CEO Hassen and top executives only learned of the final results in January.

Congressional investigators are focused on the period of more than six months earlier, when some of Schering-Plough's senior executive sold tens of millions of dollars in stock.

The company has said all the sales were approved in advance, including $28 million in transactions by Carrie Cox, the company's president, in April and May 2007, about the same time researchers were rushing to compile the disappointing Vytorin study results for presentation at the American Heart Association's annual convention.

Dr. Rost is a pharma litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower.

Why did the FDA propose making off-label marketing legal?

The FDA just issued a draft guidance allowing drug companies to distribute journal articles that discuss off-label uses of drugs and devices.

Once this is allowed, the door is completely open for drug companies to promote their drugs for anything their heart desire.

Randy Lutter, the FDA’s deputy commissioner, said “articles that discuss unapproved uses of FDA-approved drugs and devices can contribute to the practice of medicine and may even constitute a medically recognized standard of care. This guidance also safeguards against off-label promotion.”

So why would the FDA suddenly permit off-label marketing? Clearly they are interested in helping someone, and that doesn't appear to be the public. Perhaps the following chart with fines paid by drug companies over the last few years could give a hint?

Schering-Plough	1 280
Bristol Myers Squibb	1 265
Takeda-Abbott	875
Serono	704
Merck	650
GlaxoSmithKline	563
Pfizer	514
Abbot	482
AstraZeneca	355
Bayer	271
Eli Lilly	36
Wyeth	30
Novartis	8
TOTALT	7 033

Pharmalot has a poll about this. Go there and vote.

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower. 

Schering-Plough's ticking time bomb.

Earlier this week BrandweekNRX provided a transcript from an interview of Schering-Plough CEO Fred Hassan by Jim Cramer.

Jim Cramer repeatedly asked leading questions about what Fred Hassan had known about the ENHANCE trial before unblinding and if the company was hiding something. For instance, Cramer asked "you didn't know, you didn't know anything did you?" and "Why is everyone so sure you found out six months before that?"

Hassan avoided responding to those questions, and BrandweekNRX speculated that the reason he may have done so was that he might have known more than he wanted the world to know. If he had falsely claimed he knew nothing before unblinding of the trial, he could later have been charged with securities fraud based on making a material misrepresentation.

Schering-Plough's management have been adamant in making it appear as if they knew nothing about the ENHANCE trial results before the trial was unblinded. They have not said so outright, but in support of this position, they made a highly unusual filing with the SEC. (Of course, this position has been contradicted by messages BrandweekNRX found on CafePharma.)

CNBC's Mike Huckman wrote about Schering-Plough's filing, "In what I would describe as a pretty extraordinary filing with the Securities and Exchange Commission, Schering-Plough is putting in black and white the date and time that senior level executives were informed about the results of the controversial ENHANCE* study of the cholesterol drug Vytorin."

The Wall Street Journal Health Blog commented, "We’ve pored over a lot of SEC filings in our years, but this is the first time we can remember this kind of time-clockology. "

So BrandweekNRX asked a lawyer at the Securities and Exchange Commission what his thoughts were on this. This person was not responding in his official capacity or on behalf of the SEC, but his reflections should be enlightning:

He said that "looking at the SP 8-K filing on January 25, 2008, the question that comes to mind is whether the disclosure regarding when the executives were informed of the ENHANCE results is misleading. For example, "Q: When was the Schering-Plough CEO informed of the top line results of ENHANCE? A: Fred Hassan was informed on January 10, 2008 at 8:00 a.m. by Tom Koestler, the head of Schering-Plough Research Institute."

He then concluded, "One assumes that this event did in fact occur. However, if Hassan knew the ENHANCE results already, the failure to disclose that fact may be materially misleading. The same for the Q&A about the other officers. I have no information on what the officers actually knew, and when, however, I agree with you that it is very odd that Hassan avoids saying that he didn't know the results before Jan. 10."

It is worth noting that in recent years the SEC and DOJ have vigorously prosecuted individuals and corporations who misrepresent or omit material information in securities filings. In the landmark decision Securities Exchange Comm'n v. Texas Gulf Sulphur Co., the Second Circuit defined a misrepresentation or omission as an act that conveys a false impression of the facts or is misleading. The court explained that this determination is made by inquiring "into the meaning of the statement to the reasonable investor and its relationship to the truth."

Prosecutions by the SEC and DOJ for misstatements or omissions are not limited to filings. Any form of publicized misstatement or omission can create liability. Courts have read Rule 10b-5 as prohibiting any deceit that materially affects the purchase or sale of securities--the deception need not necessarily concern the value of the stock.

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower. 

Pfizer rock video.

In the past employees went on strike. Now they do a YouTube video.

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower. 

Shareholder attempts to oust Pfizer India Managing Director for money laundering, bribery, and other corrupt acts.

In an unusual legal move a Pfizer shareholder, Mr. Ashok Idnani, is attempting to oust Pfizer's managing director in India, Mr. Kewal Handa.

Mr. Idnani has given a special notice to Pfizer under Section 190 of India's "Companies Act" that he will request the "removal of Mr. Kewal Handa from his directorship at the ensuring annual general meeting."

The reasons for asking for Mr. Handa's removal are allegations of money laundering, bribery, breach of fiduciary duties, and other corrupt acts.

Mr. Idnani is also accusing Mr. Handa of authorizing "goons of a detective agency to shadow the day-to-day, hour-to-hour movements of some shareholders, including Mr. Dinesh Lakhani, Mr. Mathuradas, and others including a senior vice president of Trent Industries Mr. Phene and the managing director of Hindjua Hospital, Mr. Pramod Lele."

Additionally, the complaint details allegations that Mr. Handa would have illegally transferred the rights to an apartment "from the company to himself in surreptitious manner."

Some of my readers may remember that I covered Mr. Idnani's story last year, in the following articles:

1. Pfizer Finance Executive Blows the Whistle - Part One
2. Pfizer Finance Executive Blows the Whistle – Part Two
3. Pfizer Finance Executive Blows the Whistle – Part Three
4. PFIZER CFO RESIGNS after PFE finance executive blows the whistle

Among many others, the following documents were provided to support Mr. Idnani's contentions:

This three piece series also resulted in several news articles, among them this one in Inda's Economic Times:

Pfizer CFO exit may have India angle
28 May, 2007, 0244 hrs IST,Gireesh Chandra Prasad & Javed Sayed, TNN

NEW DELHI: The recent exit of the world’s largest drug-maker Pfizer Inc’s CFO Alan Levin may have an India angle if the allegations of a US-based blog quoting a former Pfizer India employee are to be believed.

The blog, quoting Ashok S Idnani, an ex-deputy manager at Pfizer’s finance division in Mumbai alleges that Pfizer sold its Hyderabad manufacturing plant in 2004 at a price much lower than the market price, bribed government officials in violation of the MNC’s world-wide policies, and hired a detective agency to spy on unfriendly shareholders. It also accuses some unnamed Pfizer India officials of being involved in money laundering. Pfizer denies the allegations.

These allegations were made in a sensational three-part series carried by peterrost.blogspot.com in the week running up to the announcement of Mr Levin’s resignation on May 20. The blog claims that Mr Levin’s exit last Sunday may be a result of its campaign featuring the ‘revelations’ made by Mr Idnani.

However, it does not specify a direct link between Mr Levin and the allegations made by Mr Idnani. In a company statement Mr Levin said he was leaving the company to explore career opportunities outside Pfizer.

Pfizer India, on its part, completely denies the allegations. “Blog sites in general provide open and unfiltered forums for the exchange of all kinds of information that may or may not have any validity. To date, investigations completed in response to Mr Idnani’s claims have found them to be baseless.

Pfizer takes such claims seriously and has by Mr Idnani’s own admission dedicated significant amounts of time and resources to evaluate them thoroughly,” said a Pfizer India spokesperson in an e-mailed response to ET. Pfizer Inc did not respond to a questionnaire sent over the weekend.

A Pfizer India official told ET that the present top-level shifts in the parent company are very much part of its restructuring announced in January to cut costs and to invest in new business development. Pfizer had announced in January that it would cut 10,000 jobs and close down three research sites and two factories in the US, as well as a factory in Germany and research sites in Japan and France.

Sources in the domestic pharma industry however say some of the allegations are being taken seriously by Pfizer’s top brass in the US. Adds an industry veteran, who has visited the blog: “These charges don’t just appear serious. They are very serious.” But a Mumbai-based investment banker and ex-Pfizer employee, who has not seen these postings, dismisses the blog. “Peter Rost is a joker. I do not believe any of these allegations,” he says.

Another article followed in Business World (click on images to read):

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower. 

Schering-Plough CEO refuses to state his innocence - three times!

On January 30, BrandweekNRX reported to story "New evidence indicates Schering-Plough insiders knew the Vytorin trial was "a bust" on March 13, 2007." In that article we revealed that detailed insider information about the botched trial had been available on Schering-Plough's message board on CafePharma as early as March 13, 2007.

The House Energy & Commerce Committee this week wrote to Fred Hassan at Schering-Plough and Richard Clark at Merck: "These Web site entries are obviously troubling and raise again the question of whether anyone within Merck or Schering-Plough knew the results of the ENHANCE trial prior to the official release of the data."

Now, in an amazing interview with Jim Cramer on Mad Money Fred Hassan was asked about what he knew about the ENHANCE trial and when (about 11 minutes into the clip).

What is surprising is not that Jim Cramer is fawning all over Fred Hassan, or that Jim literally leads Fred by the hand through the entire interview . . . what is amazing is what Fred refuses to say:

Jim: You've got congressmen writing letters to you about the ENHANCE study, that maybe you hid data . . . There is a notion among you that  . . . are basically trying to hide the bad stuff, that wasn't the case here, was it? (Jim is sounding incredulous, really trying to help Fred along.)

Fred: Well, we've heard about the anonymous bloggers, who were saying something, this is on a sales force type web site. It is very hard to do much with anonymous blogs. We're gonna work on this eh . . . eh (Please note that Fred, most likely coached before this interview by the best lawyers money can buy, refuses to say he was not trying to hide the bad stuff. Instead he says he is going to deal with the bloggers.)

Jim: But you didn't know, you didn't know anything did you? (Jim is trying a second time to help Fred say that he didn't know anything.)

Fred: The data was blinded until December 31 of last year and I found out at 8 am on the 10th of January. (Fred again doesn't answer the question. Instead he responds with a factual statement, aimed at giving the appearance of innocence; the timing of the unblinding may be immaterial if there were other ways to determine the results by looking at the aggregate data, as described in a letter this week from Senator Grassley to Hassan.)

Jim: Why is everyone so sure you found out six months before that? I mean why would congressmen write that, why don't they, whats the matter, is it the truth doesn't fit the thesis? (Jim is trying a third and final time to get Fred to simply say he didn't know anything.)

Fred: They will have to go through their own inquiry. It's hard to do much with anonymous blogs. (And for the third time Fred refuses to respond! Instead he talks about the anonymous blogs on CafePharma.)

So what is going on here? Why didn't Fred just come out and say "I had no idea about the trial results before they were unblinded" or said "I knew nooooothing about the ENHANCE results in 2007"?

One logical explanation may be that Fred did, indeed, know quite a bit about the ENHANCE trial data before the trial was unblinded, during a time period when his closest executives dumped massive amounts of their stock options.

Fred may also have known that if it was later proven, in a Congressional inquiry or other investigation, that he did know something, and that he had denied that publicly, he could be in a heap of legal problems for misleading the securities market.

There are two types of securities fraud: The first is material misrepresentations, and the second is material omissions. Material misrepresentations are statements that are false. Material omissions occur where the statements made are true, but the failure to state other facts gives a misleading impression. "Material" means important to a reasonable investor.

Fred may have tried to avoid making untrue statements. But if the statements he made omit facts in such a way as to create misleading impression, that could be seen as fraudulent anyway, assuming he was aware of those facts.

Based on the transcript Fred Hassan avoided responding not just once, but three times, which makes BrandweekNRX wonder - exactly what did Fred know about the ENHANCE trial in 2007?

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower. 

Valentine's Secrets

Idea: PharmaGossip

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower. 

"Why blogs matter" by Corporate Spin Firm

Levick Strategic Communications provides help to, among others, companies in trouble with Congressional investigations. Levick has recently taken a keen interest in BrandweekNRX's stories about Schering-Plough and Vytoringate.

So we thought it was time to learn some of what Levick teaches its corporate clients. Turns out Levick has a blog . . . which is pretty interesting, here's most recent post:

Why Blogs Matter, Part 2

January 22nd, 2008

Does your company need another reason to start paying attention to the blogosphere?  Here’s a big one: mainstream media journalists monitor blogs on a regular basis. In the latest research studying the connection between traditional reporters and online citizen journalists, global communications group Brodeur found the following:

• Nearly 70% of all reporters read blogs on a regular basis
• More than 20% of reporters spend more than an hour a day reading blogs
• Fifty-seven percent said they read blogs at least two or three times a week
• Nearly three-quarters of journalists surveyed have a list of blogs that they check on a regular basis
• More than a quarter of all journalists have their own blogs
• Almost 75% of reporters find blogs helpful when it comes to helping them develop new story ideas and angles, and to getting a good idea of the tone of a debate or issue

Savvy companies understand that catching a story in the blogosphere–before it’s had the chance to bubble up to the New York Times–can have an impact on a company’s credibility, public image and even its stock price. We recommend you share these latest stats with those in your organization who insist a blog strategy isn’t necessary.

Presumably Levick can now add another bullet point: Congress also monitors blogs, and may even write letters to Levick clients based on what they read - in a blog - completely short circuiting the old media, which mostly survives on reprinting press releases and cozying up to advertisers.

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower. 

Did Schering-Plough just hire congressional spin machine?

It appears as if this week's Congressional inquiries have caused panic inside Schering-Plough.

Of course, the possibility that Fred Hassan may have to answer questions similar to those posed in letters from Senator Grassley of the Senate Finance Committee, and from Bart Stupak and John Dingell of the Subcommittee of Oversight and Investigations, in full public view is a PR-nightmare.

But, there is help, and one of those firms "helping" distressed companies facing congressional inquiries has suddenly appeared as one of BrandweekNRX's favorite readers. That firm's name is Levick Strategic Communications.

Levick specializes in "Congressional Exposure," as well as "highest-profile litigation, crisis and regulatory matters of our time."

Since BrandweekNRX has a few readers in Congress, we thought, perhaps those Senators and Members may want to probe Mr. Hassan about the kind of assistance firms like Levick gave him before he appears? After all, Levick seems to be very interested in Schering-Plough's recent troubles . . . . :

So what could a firm like Levick do for Fred Hassan and Schering-Plough?

Let's listen to the firm:

"Clients hire us to win. To get them into the news or get them out of it."

"We get our clients out of the news when they are facing a hostile audience – confronting zealous regulators or Congress, grappling with a product recall, or countering bet-the-company litigation."

"We win in the Court of Public Opinion on behalf of companies, countries and high-profile individuals caught in some of the world’s most challenging communications traps. This is how we win… "

Message from Brandweek NRX to Levick: Bring out your spin and we'll expose every trick in your bag!

Dr. Rost is a litigation consultant and pharmaceutical marketing expert. He is also the author of Killer Drug and The Whistleblower.