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February 04, 2008

Pharmalot - Peter Rost Vs. Pfizer: The Evidence Comes In

Ed Silverman over at Pharmalot has done some digging in recent legal filings, and came up with this story:

Peter Rost Vs. Pfizer: The Evidence Comes In

February 4th, 2008 11:08 am By Ed Silverman

peter-rost-4.jpgLast November, the controversial former Pfizer exec won a significant victory when a federal appeals court ruled that his whistleblower lawsuit against the drugmaker should proceed. A federal judge had previously dismissed the case because Rost “failed to plead his fraud claims with sufficient specificity,” a reference to rule 9b, a provision of the False Claims Act that requires particular info about false claims submitted to the government for payment. This might include amounts charged, drugs prescribed, patient diagnosis and individuals involved in billing.

Given the level of detail required, however, winning the reinstatement looked like the easy part, because the info contained in Medicaid databases may compromise patient privacy. Last week, for instance a whistleblower lawsuit filed by two former sales reps for Johnson & Johnson’s Ortho-Biotech unit was dismissed, in part, because there was a lack of such detail.

Now, though, Rost has filed documents with US District Court in Boston offering examples that may clear this high hurdle (here is the filing). And there are at least two potentially significant developments here. One is the long-term implication for Pfizer, should Rost ultimately prevail. The other is that his efforts may serve as a template for other whistleblowers who are similarly stymied by federal judges seeking details that are, otherwise, very hard to come by.

genetropin.jpgIn his filing, Rost cites approximately 200 instances in Indiana which Genotropin, a human growth hormone, was marketed by Pharmacia (which was bought by Pfizer) for unapproved uses, such as combating aging in adults and treating short stature in children.

The examples come from the state’s Medicaid database, which appear to have provided dispensing and diagnosis coding and apparently substituted patient info with codes, which allows Rost to circumvent any privacy issues. (Take a look at pages 31 and 32, as well as Exhibit A). Pfizer has already paid $35 million in fines in connection with off-label marketing of Genotropin. But if Rost is able to use this new info successfully, the drugmaker may one day face much larger amounts in damages.

whistle.jpg

Here’s the math: Pfizer may face civil penalties of between $5,000 and $10,000 for each false claim (look here). Now, let’s extrapolate by multiplying that by 200 - the number of cases in Indiana - and multiplying that by 50 states and you get $50 million to $100 million in penalties. But that’s before treble damages based on sales to the government for off-label indications, which could add up tens of millions of dollars more, depending upon whether both off-label and kickback claims are proven.

Posted on February 04, 2008 |

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