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Here's more detail on the case that led to Pfizer's (NYSE:PFE) 2.3 billion dollar fine/settlement, courtesy of Bloomberg. Here's how things got started, apparently:

Pfizer Inc. sales folks had one tough customer in psychiatrist Stefan Kruszewski. He didn’t buy their pitch to prescribe the anti-psychotic drug Geodon to children, a use that hadn’t been approved by federal regulators.

Nor did he go for the so-called off-label uses they suggested, such as treating dementia in the elderly.

Kruszewski didn’t just say no. He went and checked the research and saw Geodon could have serious cardiac side effects not mentioned by the salesmen, who boasted of its relative safety, according to his lawyer, Brian Kenney. And he noticed that Pfizer was paying his peers to promote the drug to other psychiatrists.

But the worst for Pfizer was that Kruszewski didn’t keep it to himself. He found a lawyer, Kenney, who specializes in whistleblower cases, and they took what they had to the government.

So did John Kopchinski, who sold Pfizer’s arthritis drug Bextra but not as aggressively as the bosses wanted. They told the sales force to pitch it for post-surgical pain, acute pain, migraines and a host of other conditions for which the drug had been rejected by the U.S. Food and Drug Administration, says Kopchinski’s lawyer, Erika Kelton.

The six whistleblowers in the case are getting anywhere from $2.3 million to $51 million now that the settlement has been announced (that upper figure is Kopchinski, who seems to have provided the most serious evidence). As I mentioned the other day, I think this is a good thing. It takes a lot of nerve to step up when your employer is doing something outside the limits of the law (and asking you to do it as well). A chance to make up for the certain loss of your job (and the near-certain loss of any future prospects in the field) goes a long way.

And there's an interesting perspective on why a settlement was reached:

. . .Pfizer is the pharmaceutical equivalent of insurance giant American International Group Inc. (NYSE:AIG), which was too interwoven into the global economy to be allowed to fail. Likewise, if Pfizer were convicted of a crime, it would face debarment from federal programs. And that would mean that Medicaid and Medicare patients would have to either somehow pay pocket for vital medicines the company produces or go without.

Hadn't thought of that one. I wonder if any company will have the nerve to use this as a negotiating tactic? Perhaps Pfizer already did, come to think of it..

Source: Pfizer Whistle-Blowing: The How and Why