Legal Tangle At The Fountain Of Youth
The drug human growth hormone (HGH), one of the most tightly regulated substances on the market, is proving to be a thorn in the side of Pfizer Inc. (PFE ). BusinessWeek has reviewed internal documents shedding new light on allegations that Pharmacia Corp. (PFE ), a company Pfizer acquired in 2003, improperly promoted its drug Genotropin to doctors who intended to use it as an anti-aging treatment. The Food & Drug Administration has approved Genotropin and other synthetic versions of human growth hormone to treat certain diseases. But it is illegal for manufacturers such as Pfizer to promote the hormone for anti-aging use, which is not approved by the FDA.
BusinessWeek was shown the documents by Dr. Peter Rost, a former Pharmacia executive, who filed a civil whistleblower suit against Pharmacia and Pfizer in U.S. district court in Massachusetts in 2003. The suit was unsealed in November, 2005, after the U.S. Justice Dept. declined to intervene. But Rost is continuing to pursue the suit with the help of private counsel.
Pfizer has filed a motion to dismiss, arguing that both Pharmacia and Pfizer had acknowledged that there were problems and had sought to address them. Separately, Pfizer's most recent 10K, filed on Feb. 28, says there are continuing Justice Dept. investigations into the marketing of Genotropin.
It isn't clear whether these investigations are related to the allegations in the whistleblower suit. But Rost says that after he filed the suit, he was interviewed by the Justice Dept., the FBI, and the FDA's Enforcement Div. He says he has testified twice as a grand jury witness in a criminal investigation being pursued by the office of the U.S. Attorney in Boston. A spokeswoman there declined to comment.
The legal tangles could have broad repercussions. The documents BusinessWeek examined suggest that Fred Hassan, former chief executive officer of Pharmacia, may have been aware of efforts in the company to encourage the improper promotion of Genotropin. Hassan is currently head of Schering-Plough Corp. (SGP ), which is not part of the investigations.
Hassan's troubles go back to January, 2000, when government concerns about the abuse of HGH were on the rise. A memorandum landed on Hassan's desk from Dr. William Abelove of the Renaissance Longevity Center in Florida. The letter opened by saying: "The Renaissance Longevity Center is initiating the most aggressive ethical campaign ever launched for the marketing of human growth hormone...." It went on to suggest a "strategic alliance" with Pharmacia. Handwritten notes at the top of the memo indicate that Hassan passed the letter on to members of his marketing staff with instructions to "follow up."
Rost alleges that the memo and other internal documents that are part of his case prove the companies knowingly marketed HGH to anti-aging doctors. By law, drug companies are forbidden to market any drug for so-called off-label use. Additional restrictions on HGH make it particularly sensitive. "This is an anti-aging doctor saying that he's going to put a lot of money behind promoting [Pharmacia's] formula," says Rost. "Hassan...should have known. It's very illegal."
Hassan left Pharmacia right when Pfizer acquired it in 2003. In response to a request for comment, Schering spokesman Stephen Galpin said: "Fred Hassan is prevented from commenting on this or any other issue pertaining to the former Pharmacia under a confidentiality agreement with Pfizer." But other executives who were close to Hassan say he did nothing improper. Goran Ando, who was vice-president for research under Hassan at Pharmacia -- and who was hand-copied on the Abelove memo -- warns against attaching too much significance to Hassan's instructions. "He passed along virtually every memo," says Ando, now a board member of several companies in Britain. As for associating with anti-aging centers, Ando says, "We tried to discourage it."
Documents reviewed by BusinessWeek suggest that executives below Hassan pursued a relationship with Abelove, and were aware of the legal implications of doing so. In February, Abelove sent a letter, copied to eight Pharmacia executives, describing what would be on the agenda at a meeting. Among other topics, Abelove wanted to discuss "the ability for the Abelove Longevity Centers to purchase growth hormone at quantity discounted prices."
Soon afterward, Pharmacia received legal advice on this matter from the law firm Morgan, Lewis & Bockius. The firm sent a confidential memo to Pharmacia's corporate counsel outlining the "regulatory and legal implications of possible arrangements with Renaissance Longevity Centers." The six-page memo, examined by BusinessWeek, lays out various legal risks inherent in providing the drug at a discount to Abelove's practice. It may be viewed, the memo says, "as an improper incentive that encourages physicians to overutilize the drug, which could be found to be a violation of the Medicare/Medicaid Anti-Kickback statute."
The lawyers had every reason to be fastidious. In 1999, Genentech Inc. (DNA ) pleaded guilty to a federal criminal charge that it improperly promoted its growth hormone. It paid a $50 million fine. The February, 2000, memo to Pharmacia from Morgan, Lewis & Bockius references the Genentech action in a section labeled "FDA Enforcement Risks." It advises that Pharmacia should reduce the risk by ensuring that doctors not receive "cash payments or free goods as a result of conducting any research studies." An assistant to Stephen Paul Mahinka, one of the lawyers who wrote the memo, said in a voice mail that Pfizer's policies prevent outside counsel from talking to reporters.
Documents show that in May, 2000, Abelove signed a consulting contract with Pharmacia to pursue a broad range of activities related to HGH, including reviewing marketing strategies, attending meetings on growth hormone, and educating Pharmacia employees about growth hormone. The contract included a promise of a $50,000 payment. It's unclear whether Abelove got a price break on Genotropin. Abelove, a practicing physician in Miami and Weston, Fla., with a strong interest in anti-aging treatments, declined to comment on the contract because of a confidentiality agreement he has with Pharmacia.
Pfizer and Pharmacia addressed Rost's allegations in the motion to dismiss the whistleblower lawsuit. Pfizer says Pharmacia took corrective actions in 2002, including terminating all discount contracts for Genotropin. The issues "were corrected by Pharmacia and later by Pfizer, and Pfizer voluntarily disclosed them to the government as soon as it was possible to do so," says Paul Fitzhenry, a spokesman for Pfizer. Abelove is not mentioned by name in Pfizer's court filings. Fitzhenry says, however, that "the Abelove contract was terminated before Pfizer acquired Pharmacia."
Rost, admittedly, has an ax to grind when it comes to both Pharmacia and Pfizer. Pfizer fired him late last year after the case was unsealed, prompting him to counter with a lawsuit charging wrongful termination. Rost has a history of battling the pharmaceutical industry. He once alleged tax violations on the part of international staffers at his former employer, Wyeth (WYE ). And in 2004 he had a public war of words with Pfizer over drug reimportation. Rost's allegations about Genotropin extend far beyond what Pharmacia might have been planning with Abelove's Longevity Center. His whistleblower suit also alleges that Pharmacia used a research program as a vehicle to reward physicians for prescribing Genotropin and that the company improperly paid for anti-aging doctors to attend meetings held at chic resorts.
Pfizer says that these and other allegations were addressed in its motion to dismiss. As the drug giant and its former employee trade jabs, HGH used as an anti-aging treatment is certain to remain under the microscope.