Pharmaceutical Executive: Confessions of a Serial Whistleblower
Some time ago I was asked to write an article for Pharmaceutical Executive. This is a monthly magazine read by all . . . pharmaceutical executives. I was honored that they asked me, and I submitted a draft. But then they decided that my story was even more interesting than the story I had written. So here is the four-page article from the December issue of Pharmaceutical Executive. I am, of course, grateful, that this renowned industry magazine features my comments this way. After all, this is akin to the Wall Street Journal writing a supportive article about a foreign rebel on their front cover.
Confessions of a Serial Whistleblower
Dec 1, 2006
Peter Rost, former Pfizer executive turned whistleblower, isn't just at war with his old employer. He's crusading against all of pharma, an industry he likens to the mob.
Interview by Joanna Breitstein, Executive Editor
Before the conversation could get underway, Peter Rost plants a stake in the ground. "I'm not a crazy man," says Rost. "I just wanted to do my job well enough to one day run my own drug company."
Rost, author of The Whistleblower: Confessions of a Healthcare Hitman, was on his way up the corporate ladder. He began his career in medical advertising, eventually switching to an industry post at Wyeth, as managing director of the Nordic region, and then at Pharmacia, as vice president of endocrine marketing.
But along the way, Rost developed an itch that he couldn't help but scratch. Reluctantly—if you ask him—Rost filed not one but two qui tam suits: The first accused Wyeth of a global scheme to evade taxes. The second went after Pfizer, which acquired Pharmacia, for marketing its human growth therapy, Genotropin (somatropin), off-label.
Many find it easy to dismiss Rost and his allegations—including a federal judge in Massachusetts, who ruled in favor of Pfizer in August. But just as many are intrigued. Rost makes his opinions difficult to ignore. He's been outspoken on television and on his blog, peterrost.blogspot.com, and in his recent book, The Whistleblower: Confessions of a Healthcare Hitman. Supporters—and for entertainment, even some detractors—are eating up his depictions of the the world's largest pharmaceutical company, corporate espionage, and of the consequences that befall whistleblowers—among other things, Rost is out of a job.
What did you learn from blowing the whistle on Pfizer?
Not to blow the whistle. Seriously. You should avoid it at any price because it simply isn't worth it—you really lose everything. Obviously, nobody's going to agree that they broke a law, so you have to expect that you'll spend at least the next five to 10 years in court. Unless you're independently wealthy, there is really no upside for you to blow the whistle.
It's exactly like the mob. I hate saying it, but when you're talking to the mob, you end up with a bullet in your head. When you're talking about the drug industry, you end up never working again. People don't want to interview you if you have ever been in the press with anything like this, even if it is just trying to do the right thing.
The reality is that justice delayed is justice denied. The system is completely broke and I would strongly advise against anyone trying to blow the whistle. There's just no point.
Didn't you already know that, having filed suit against Wyeth for tax evasion?
Based on my prior experience, the last thing I ever wanted to do was get myself into this kind of situation. If you've been in this situation once, you will run from it again, which I tried to do.
I wasn't like, 'Hey, let's make some money and file a complaint.' It was very much the opposite. I gave Pfizer every opportunity for a year and a half to do something about [correcting the illegal marketing practices surrounding Genotropin].
But I don't regret having filed [a qui tam suit against Pfizer]. There was this law that made the distribution of drugs for off-label purposes a felony, with a penalty of up to 10 years in jail. As the VP in charge, I was screwed. I had to do something.
You've very publicly taken on Pfizer. How has that affected the way you've been portrayed in the media?
Pfizer used about 20 lawyers and PR people to prepare for my termination. Then they terminated me when I was out of the country and couldn't respond very well to the press. Pfizer also said a number of things to the press that were completely untrue, and they did it in a very sophisticated manner.
The company put their charges into their own legal filing, which is a protected form of speech. That way, it was hard for me to claim libel. The legal filing contained information that was intended to make me look like I was trying to blackmail Pfizer and that I was a parasite on the case [meaning that the original source of the information about off-label promotion came from somewhere else]. The PR person of Pfizer even said to The New York Times that, since I was the VP, I was blowing the whistle on my own conduct.
It is Marketing 101. Number one, blame the whistleblower. Number two, make him look like a criminal and an idiot. That's how it works—it's just sad to see it played out.
How do you think the pharma industry can better handle whistleblowers?
I can't offer any advice because I don't think they are interested in dealing with whistleblowers in a forthright manner. I bring it back to the mob. It would be like saying, 'What advice would you give a mob boss for him to deal with a guy who rats on him?' It's the same thing.
Sadly, the thing is that pharma companies have all these manuals. Pfizer has the open-door policies. They have the Blue Book on ethics. I was so stupid, because I truly believed in those—and you know, I've been around for 20 years—but the manuals are not there to help the people. The manuals are there to hold up in court and say, "We have this manual. We promise to be ethical. We promise to have an open door. We promise that we won't retaliate [against whistleblowers]. That's our policy." But the policy doesn't protect employees. It is legal protection for the company.
You regularly voice your opinions about Pfizer and the drug industry on your blog. Have you created or tapped into a whistleblower underground?
I have had a lot of people contact me who have seen similar things [as I saw with Genotropin]. I also just published an entry on my blog from somebody else within Pfizer who had witnessed document destruction. And oh boy, you should see the activity that I have had on my blog from [Pfizer's law firm] Covington and Burling since then.
So how common are illegal marketing practices in the industry?
If we just look at the public record, virtually every one of the major drug companies has been convicted and paid primo civil fines to the tune of hundreds of millions of dollars. And we know that when it comes to violations of the law, that's only the tip of the iceberg. Not everybody's getting caught. The Justice Department is completely overwhelmed, and they only intervene in 10 to 20 percent of the cases—they just don't have the manpower. And this is the flipside: The chance of getting caught is pretty slim.
So I would say it is very, very common. And, in defense of the drug industry, I believe that most of the people I've worked with are good, hardworking, honest people trying to do the right thing. Companies can't know what every single employee is doing all the time. But when they do get caught and pay these fines, it's most often not because they had one renegade employee. It takes a lot to convict a pharmaceutical company.
Has increased scrutiny by OIG changed this environment?
It's a complete joke. Let's look at real life. If a company violates a law, the Office of the Inspector General of the Health and Human Services can't put the company in jail.
What they do is make a company sign a Corporate Integrity Agreement. So a company does something really bad, and they have to sign an agreement that says they will never do this bad thing again. Pfizer has signed two of those agreements and obviously, Pfizer blames the subsidiaries that they bought.
You have to read these agreements, which I have done with certain pleasure, because they're so ridiculous. You can promise anything you want in life, but if there are no consequences nobody cares. It's like kids. You tell them not to steal the candy, but if you don't do anything, they're going to continue to do it, right?
It's the same thing here because the consequences in these agreements are so little. You know, Pfizer had $2-billion in sales of Neurontin [gabapentin] per year, and they received a $400-million fine. If you do that, it's almost like you're saying, "Well, let's do more off-label marketing."
But the true penalty comes when the company is no longer allowed to sell their drugs to the government.
That's a very good point. But I'm not aware of it happening. It's all a game and I think once you get into it, you start to realize it. Just look at the Serono deal, where they paid $704 million for [inducing demand for the AIDS-wasting drug Serostim]. There was a ban placed on a subsidiary from selling to the government, but as Serono pointed out in the press release, that's not going to stop them from selling anything. The main company was not affected.
A Massachusetts US District Court recently dismissed your case against Pfizer. Why have you told reporters that you are happy about the decision?
Because the judge struck down what Pfizer had said to the press about me. The judge said I was not a parasite on their lawsuit—that I was the original source of the information [about Genotropin's off-label marketing], not Pfizer.
We had to overcome four hurdles to win, and we overcame three. The fourth hurdle, which we didn't overcome in this ruling, was essentially a technicality. This particular circuit requested a specific false claim on a specific patient to be submitted. That is a very tough hurdle to overcome, and quite frankly, if that would be applied to all false claims cases in the future, there will never be a drug company again convicted in the First Circuit.
Why is it difficult to show a specific claim?
We know that Pfizer has a database with all this information. But since the judge dismissed the case, which we will proceed with anyway, we can't subpoena them. But it's a catch 22. We are working on trying to get the claim, but how do you get that information? You need to get the patient's name and the diagnosis of somebody who has received a drug for off-label purposes, but HIPAA makes that very difficult.
What makes that a bit crazy is that other circuits have not applied that very stringent standard. My point is that most of the circuits allowed the cases to proceed without a specific patient record. This judge did what he had to do, but unless this is reversed, there will never again be a drug company convicted in the First Circuit under the False Claims Act, which obviously the drug companies would be jubilant about because then the whole act has been rendered impotent. So I can assure you, this is something all the drug company lawyers are watching extremely carefully right now.
Is there a bright side in all of this?
All this stuff that's going on with me, and in the industry in general [in terms of prosecution of companies], it's probably for the public good. This is simply going to be an ongoing process. I just wish I wasn't personally involved, quite frankly. But now that I am, I'm going to make sure I'm doing it in such a way that, hopefully, I do win. I'm going to do it in such a way that at least is entertaining.
No Censorship Here
The Whistleblower: Confessions of a Healthcare Hitman is an enticing read, full of water-cooler gossip. That, of course, struck a never with Pfizer, which asked the judge to issue "appropriate sanctions" against Rost that would prevent him from publishing a book that could potentially taint the jury pool in the Genotropin off-label case. Although the judge ultimately ruled in favor of Pfizer, he struck down the drug company's request to censor its opponent.
Dr. Peter Rost blog comment for Pfizer lawyers: Please note that there are a few factual errors in the article. That's not my fault. I didn't write the article. And of course, the book is an enticing read. No one has bought as many copies as the Pfizer lawyers . . . they had three copies on the conference table last time I saw them.