Imagine being guilty of a crime, but you knew that no one dared to charge you with it.

That is essentially what happened when Pfizer, the world’s largest pharmaceutical company, was caught illegally marketing Bextra, a painkiller that was taken off the market in 2005 due to risk of heart attack stroke, and also the risk of a serious, sometimes fatal, skin reaction.

Pfizer first acknowledged cardiovascular risks associated with Bextra in October 2004. The American Heart Association soon after was presented with a report indicating patients using Bextra while recovering from heart surgery were 2.19 times more likely to die from stroke or heart attack.

When the criminal case was announced last fall, federal officials touted their prosecution as a model for “tough, effective enforcement”. “It sends a clear message” to the pharmaceutical industry, said Kevin Perkins, assistant director of the FBI’s Criminal Investigative Division.

But beyond the fanfare, there is a story about the power major pharmaceutical companies that purposely break the laws intended to protect patients.

Big Plans For Bextra

The story begins in 2001, when Bextra was about to hit the market. The drug was part of a revolutionary class of painkillers known as Cox-2 inhibitors that were supposed to be safer than generic drugs, but at 20 times the price of ibuprofen.

Pfizer and its marketing partner, Pharmacia, planned to sell Bextra as a treatment for acute pain, the kind you have after surgery.

But in November 2001, the U.S. Food and Drug Administration said Bextra was not safe for patients at high risk of heart attacks and strokes.

The FDA approved Bextra only for arthritis and menstrual cramps.

Promoting drugs for unapproved uses puts patients at risk circumventing the FDA’s judgment over which products are safe and effective. Known as “off-label” promotion, and is against the law.

Later in July 2002, Pharmacia was purchased by Pfizer.

With billions of dollars at stake, marketing and sales managers across the country nonetheless targeted doctors and surgeons. “Anyone that used a scalpel for a living,” according to one district manager.

A Phizer manager in Florida e-mailed his sales reps with a pre-scripted sales pitch that falsely claimed that the FDA had given Bextra “a clean bill of health” all the way up to a 40 mg dose, twice what the FDA approved as safe.

My Doctors Is A Salesmen

Internal company documents show that Pfizer used a multimillion-dollar medical education budget to pay hundreds of doctors as speakers and consultants to tout the many “benefits” of Bextra.

Pfizer said in court that “the company’s intent was pure”; to foster a legal exchange of scientific information among doctors.

But an internal marketing plan called for training physicians “to serve as public relations spokespeople.”

According to Lewis Morris, chief counsel to the inspector general at the U.S. Department of Health and Human Services, “They pushed the envelope so far past any reasonable interpretation of the law that it’s simply outrageous.”

Pfizer’s chief compliance officer, Doug Lanker, said that “in a large sales force, successful techniques spread quickly,” but that top executives seemed to be unaware of the “significant mis-promotion” issue with Bextra until federal prosecutors began to show up.

By April 2005, when Bextra was finally taken off the market, more than half of its $1.7 billion in profit had come from illegal prescriptions.

Too Big To Nail

When it came to prosecuting Pfizer for putting countless patients at risk, the giant pharmaceutical company had a trump card. Pfizer was considered too big to nail.

Any company convicted of a major health care fraud is automatically excluded from Medicare and Medicaid. Convicting Pfizer on Bextra would prevent the company from ever billing federal health programs for any of its products. It would also prevent any medicare or medicaid patients from receiving Phizer products.

Pfizer manufactures over 43 different pharmaceutical products including: Viagra, Xanax, Zoloft, Zyrtec, Lipitor, Celbrex, and even Ben-Gay.

Prosecutors said that excluding Pfizer would most likely lead to its collapse, with huge collateral damage.

Disrupting the flow of Pfizer products to Medicare and Medicaid recipients, causing the loss of jobs including those of Pfizer employees, and causing significant losses for Wall Street.

“We have to ask whether by excluding the company from Medicare and Medicaid, are we harming our patients,” said Lewis Morris of the U.S. Department of Health and Human Services.

So Pfizer and the feds cut a deal.

Instead of charging Pfizer with a crime, prosecutors would charge the Pfizer subsidiary, PHARMACIA & UPJOHN CO. INC.

That subsidiary is nothing more than an empty shell company whose only function would be to plead guilty.

Corporate Orgy

Pharmacia was sold to private interests in the 1990s

In 1995, pharma company Upjohn merged with Pharmacia AB, to form Pharmacia & Upjohn Co.

In 1999 The merged company “Pharmacia & Upjohn” again merged with the American bioindustry and medical division of the corporation Monsanto Company in 2000.

The resulting conglomerate took the name of “Pharmacia Corp.”.

In July 2002, Pharmacia Corp. was bought by Pfizer.

According to court documents, Pfizer Inc. owns (a) Pharmacia Corp., which owns (b) Pharmacia & Upjohn LLC, which owns (c) Pharmacia & Upjohn Co. LLC, which in turn owns (d) Pharmacia & Upjohn Co. Inc. It is the great-great-grandson of the parent company.

Public records show that the subsidiary was incorporated in Delaware on March 27, 2007, the same day Pfizer lawyers and federal prosecutors agreed that the company would plead guilty in a kickback case against a company Pfizer had acquired a few years earlier.

As a result, Pharmacia & Upjohn Co. Inc., the subsidiary, was excluded from Medicare without ever having sold so much as a single pill.

Pfizer was free to sell its products to federally funded health programs.

Feds Home For Imaginary Friends

Two years later, with Bextra, the shell company Pharmacia & Upjohn Co. Inc. once again plead guilty.

“It is true that if a company is created to take a criminal plea, but it’s just a shell, the impact of an exclusion is minimal or nonexistent,” Morris said.

Prosecutors say there was no viable alternative.

“If we prosecute Pfizer, they get excluded,” said Mike Loucks, the federal prosecutor.

In other words, if we challenge them they will take away that sweet candy.

Did the punishment fit the crime? Pfizer says yes.

It paid nearly $1.2 billion in a criminal fine for Bextra, the largest fine the federal government has ever collected, plus additional payments in civil court.

Although it denied wrongdoing on allegations that it illegally promoted 12 other drugs.

In all, Pfizer lost the equivalent of three months’ profit.

While it maintained its ability to do business with the federal government.

To prevent it from happening again, Pfizer has set up what it calls “leading-edge” systems to spot signs of illegal promotion by closely monitoring sales reps and tracking prescription sales.

It’s not entirely voluntary. Pfizer was made to sign a corporate integrity agreement with the Department of Health and Human Services. For the next five years, it requires Pfizer to disclose future payments to doctors and top execs to sign off personally that the company is obeying the law.

But after years of overseeing similar cases against other major drug companies, even Loucks, isn’t sure $2 billion in penalties is a deterrent when the profits from illegal sales can be so large.

“I worry that the money is so great that dealing with the Department of Justice may be just of a cost of doing business.”

Source: CNN Special Investigations

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