Spitzer's New Target: Big Pharma
By Amy Tsao
On June 2, on the same day that data from a large U.S. government study showed that depressed kids taking an antidepressant fared better than those who got therapy, the New York State Attorney General's office announced an unprecedented lawsuit against British drug giant GlaxoSmithKline (GSK ). The suit alleges that the company withheld from the public and the medical community important research data on the safety and efficacy of its depression drug Paxil in children and teens.
State Attorney General Eliot Spitzer, known as the crusader who made Wall Street giants shake in their shoes, now seems to be setting his sights on the pharmaceutical industry. In the last several months, his office has filed numerous suits against drugmakers for allegedly overcharging for drugs sold to government-backed health plans for the poor and the elderly.
This latest case against GSK, however, represents a new foray for Spitzer -- indeed, for any state attorney general. He alleges the company committed consumer fraud by concealing results of some of its studies on Paxil. Spitzer's office says that of five studies conducted on children in 1998, only one was released. It turned out the other four showed the drug was not effective and that it increased the risk of suicide in patients twofold, vs. those taking placebos.
Paxil, of course, is not approved for use in kids. (Only Eli Lilly's (LLY ) antidepressant Prozac is.) Though GSK had never sought Food & Drug Administration (FDA) approval of the drug for pediatric use, many doctors prescribe it for children. That's known as off-label use, which is common for many drugs and diseases. Still, some doctors might not have prescribed the drug if they had known of the other studies that showed the increased risk of suicide and lack of efficacy, the suit alleges.
GSK says it made all five studies available to the medical community either through journal publication or presentation at "major medical meetings." When asked for more specifics, a spokesman could not elaborate. It issued a statement saying that "it publicly communicated data from all pediatric studies."
"APPEALING POLITICAL TARGET."
The suit is not asking for specific damages, and although it appears to be the first time a state attorney general has filed such a suit against a drugmaker, "in a lot of ways it's a garden-variety fraud case," says Tom Conway, bureau chief of consumer frauds at the New York State Attorney General's office. GSK "selectively released one study and put others in a file cabinet," he says. "We're saying it can't release part of the story and not give doctors the rest of the information."
Experts say Spitzer is jumping on the anti-Big Pharma bandwagon. "Drug companies are an appealing political target these days, regardless of whether one believes in the underlying offense," says Al Lorman, a food and drug lawyer with Mayer, Brown, Rowe & Maw in Washington.
Sentiment against the drug industry is starting to gain momentum, similar to what happened to Big Tobacco a decade ago. If Spitzer's prosecution of GSK succeeds, and the outcome won't be known for some time, this case could mark the beginning of a wave of lawsuits, says Don Moran, president of The Moran Co., a pharmaceutical consultancy. Spitzer and others are "circling around the pharmaceutical industry looking for a hook."
Meantime, many doctors have said they favor efforts to make information more readily available. The president of the New York State Psychiatric Assn., Barry Perlman, issued a statement supporting the move to sue GSK. "This case is not just about Paxil in kids," he said. "This is about how doctors broadly receive information."
The case appears to be an unusual legal maneuver. But, considering the growing concerns about widespread off-label prescription use, having as much data as possible for doctors and the general public has never been more important. And if Spitzer succeeds in bringing more attention to the matter, even if he loses the lawsuit, he may come out a big winner.
Tsao writes for BusinessWeek Online in New York
Edited by Beth Belton