Pfizer's Pharmacia & Upjohn Company Inc. unit has pled guilty to offering a kickback in connection with the sale of its human growth hormone product.
The Wall Street Journal, New York Times, and Washington Post ignored the story.
Why is unclear.
The settlement was a complicated one, negotiated by Jeremy Sternberg and Susan Winkler of the U.S. Attorney's office in Boston and by Pfizer attorney Ethan Posner. Posner is a partner at Covington & Burling in Washington, D.C.
Posner did not return calls seeking comment for this story.
A second Pfizer unit, Pharmacia & Upjohn Company LLC, entered into a deferred prosecution agreement for illegally promoting its human growth hormone drug Genotropin for such off-label uses as anti-aging, cosmetic use and athletic enhancement.
The companies will pay a total of $34.7 million in fines and penalties. As a result of the plea agreement and the deferred prosecution agreement, Pfizer Inc. was granted a non-prosecution agreement. Nice deal, if you can negotiate it.
U.S. Attorney Michael Sullivan said Pfizer "acted responsibly" for voluntarily and fully self-disclosing the off-label promotion of Genotropin. This ticked off Peter Rost.
Rost was a vice president at Pfizer when he discovered the criminality and blew the whistle. Rost has two lawsuits pending against Pfizer.
One lawsuit accuses Pfizer of violating the False Claims Act. That lawsuit is pending on appeal to the First Circuit Court of Appeals in Boston. The other -- for wrongful dismissal -- is in discovery. How come the Justice Department is praising Pfizer and not Rost?
"The Justice Department praised Pfizer for self-reporting," Rost told Corporate Crime Reporter. "But Pfizer would have done nothing if I didn't twist its arm. I was floored when I read the press release. They have one guy who lost his career, lost his job for doing the right thing. That would be me. And they praised the company that fired me?"
In fact, the U.S. Attorney's criminal investigation was triggered by the filing of Rost's False Claims Act case. Rost documents the history of the case in his book The Whistleblower: Confessions of a Healthcare Hitman.
And Rost testified twice before the federal grand jury in Boston that investigated the Pfizer criminal wrongdoing. And yet the federal government refused to join Rost in his False Claims Act case.
"Not only didn't they join in the False Claims Act case, they didn't even say thank you," Rost said. "They praised Pfizer, but not me. Instead, in the press release they negotiated with Pfizer, they state that 'Pfizer acted responsibly when it self-disclosed to various federal government agencies in May 2003.' There's not a word about the whistleblower that Pfizer fired, or that the whistleblower fought since October 2002, trying to get the company to rectify and disclose the problems."
Rost said his lawyers will seek to open negotiations with prosecutors in Boston this week to reach a settlement.
The Pfizer unit that pled guilty will pay a criminal fine of $19.98 million. And federal prosecutors boasted that this company will be "excluded permanently from participation in all federal health care programs."
Translated: the unit that pled guilty is an empty closet somewhere inside the Pfizer beast -- there is probably nothing to exclude.
Federal officials alleged that Pharmacia violated the federal anti-kickback law by offering to make $12.3 million in excess payments on a distribution to a pharmacy benefit manager in the expectation of obtaining improved positioning for its drug products.
Federal officials alleged that the other unit -- Pharmacia & Upjohn LLC -- illegally promoted and distributed Genotropin. Genotropin was approved by the Food and Drug Administration solely for the treatment children with growth related diseases. Instead, Pharmacia engaged in the unlawful promotion of the drug for uses not approved by the FDA such as anti-aging, cosmetic use and athletic performance enhancement.
This unit, the LLC unit, probably has something to lose. That's why it wasn't forced to plead guilty. Instead, it was granted a deferred prosecution agreement.
Under the deferred prosecution agreement -- which lasts for 36 months -- the company will pay $15 million and cooperate with ongoing growth hormone investigations.
Corporate Crime Reporter is located in Washington, DC. They can be reached through their website.