Justice Delayed is Justice Denied? - Another Neurontin Settlement by Pfizer 20 Years After the Alleged Events

We have argued repeatedly against the strategy used by US government authorities to address allegations of bad behavior in health care (and elsewhere) by pursuing monetary settlements against the companies involved, rather than trying to impose penalties on the people who may have done wrong.  There are many apparent things wrong with this approach (which we will rant about again below), but one aspect that deserves more attention is its slowness.

The Latest Pfizer Settlement

For example, Bloomberg reported in early June about yet another settlement by Pfizer of allegations about the marketing of the drug Neurontin (gabapentin, made by its Parke-Davis subsidiary):

Pfizer Inc agreed to pay $325 million to settle a lawsuit brought by health-care benefit providers who claimed the drugmaker marketed the epilepsy drug Neurontin for unapproved uses.

The settlement, which needs approval from a federal judge in Boston, would end a case over claims that the company’s Parke-Davis unit schemed to market the drug for unapproved conditions as early as 1994. 

Thus this settlement occurred 20 years after the first actions were alleged to have occurred.

Officially, "Pfizer Didn't Admit Wrongdoing" Despite Allegations of Kickbacks

Otherwise, this particular settlement appears unremarkable.  As is typical, the federal authorities and the judge allowed a settlement which obscures what really happened, because,

The Boston accord will resolve 'all third-party payer claims regarding off-label promotion' and state antitrust claims over Neurontin sales, Steve Danehy, a company spokesman, said in a statement. Pfizer didn’t admit wrongdoing, he said. 

Nonetheless, the allegations were about kickbacks to physicians, a behavior that ought to concern ethical health care professionals.

The companies alleged that Parke-Davis, part of Warner-Lambert Co., paid kickbacks to doctors to encourage them to prescribe the anti-seizure drug for unapproved uses such as bipolar and panic disorders.

Pfizer acquired Warner-Lambert in 2000 and 'deliberately expanded the promotion of off-label uses,' lawyers for the benefits firms said in an amended complaint filed in 2011. 

So Why Pay $325 Million?

So Pfizer appears to have paid another $325 million to allow the company to claim again that these allegations were never proven.  Yet if these allegations were really entirely false, one might think it would have cost the company less than that to take the case to trial?

As Judge Rakoff noted in rejecting a settlement between the US Department of Justice and Citigroup of allegations of financial misbehavior (look here),

As for common experience, a consent judgment that does not involve any admissions and that results in only very modest penalties is just as frequently viewed, particularly in the business community, as a cost of doing business imposed by having to maintain a working relationship with a regulatory agency, rather than as any indication of where the real truth lies.

Yet the latest Pfizer Neurontin settlement, occurring 20 years after the events in question, officially gives no indication of where the real truth lies.

No Admitted Wrongdoing, Despite Past Evidence, Including a RICO Conviction

These very late denials of admission of wrongdoing seem hollow when they are compared to the revelations that have appeared over the years from various legal actions about Neurontin marketing.  As we have discussed here, documents revealed by previous Neurontin litigation have uncovered a catalog of deceptive marketing practices, including manipulation of clinical research, including its design and the analysis and dissemination of its results,  (look here and here), the suppression of clinical research (look here), and stealth marketing campaigns, including manipulation of continuing medical education through "unrestricted educational grants," captive speakers bureaus, docile and well-paid academics and physicians on advisory boards and consultants, the use of key opinion leaders as marketers, and publications strategies including ghost writing (look here).  


Note also that this is only the latest chapter in the long saga of Neurontin, for whose mismarketing Pfizer has already shelled out a lot of money (for the most recent example look here, then see this post, and look here for the collection).  Pfizer has an amazing record of bad behavior on view here.  In fact, it has had a conviction as a Racketeering Influenced Corrupt Organization (RICO) on the basis of its previous marketing of Neurontin (look here), which was recently upheld on appeal (look here).   Yet Pfizer, convicted as a racketeering influenced corrupt organization, gets to officially deny wrong-doing once again.  And through all this, no Pfizer executive who authorized or directed any of this conduct, or who got a big bonus based on Neurontin revenues hiked by deception, has apparently had to suffer any negative consequences.

Summary: the Usual Rant

So here we go again,...  The failure of the current limp legal efforts against such corruption is evident by how many corporations have become ethical repeat offenders.  Pervasive bad behavior by large health care organizations has got to be a major cause of our ongoing health care dysfunction.  So, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue.

True health care reform would include much more vigorous enforcement of existing laws to make sure health care organizations and their leaders actually put health, rather than personal enrichment, first.