Rost vs. Pfizer qui tam in The Pink Sheet

May 19, 2008
Volume 70 Number 020 page 23

Whistleblower Suits Alleging Off-label Promotion Need Not Be Specific – Gov’t


The U.S. government says whistleblowers do not need to provide specific details of misconduct in claiming a company marketed a drug for an unapproved use.

The government offered its interpretation of the laws governing off-label lawsuits in the case Peter Rost, former vice president of marketing at Pharmacia & Upjohn, brought against Pfizer over marketing of the human growth hormone Genotropin. While the government has declined to intervene in the litigation, it said it was interested in seeing the correct application of the law in this and other cases.

In a "statement of interest" filed with the U.S. District Court of the District of Massachusetts May 12, Acting Assistant Attorney General Gregory Katsas said the False Claims Act "should be read broadly to reach all fraudulent attempts to cause the government to pay out sums of money."

"I think the Department of Justice's statement is highly significant not only because it supports Dr. Rost, but also because it demonstrates that there are very important public policy issues at stake here," said Rost's attorney Mark Labaton, of Kreindler & Kreindler.

The government's filing could have an impact on other cases brought under the False Claims Act. Under this law, private individuals file qui tam, or whistleblower, suits on behalf of the government. It is the government's primary tool in pursuing health care fraud. There are about 150 pending whistleblower suits (1"The Pink Sheet," March 31, 2008, p. 15).

Rost claims Pharmacia - which was acquired by Pfizer in 2003 - fraudulently promoted Genotropin to treat short children and aging adults. The Massachusetts district court dismissed the suit on grounds that it failed to specify details of the alleged fraud. But in November the U.S. Court of Appeals for the First Circuit ruled that Rost could amend his complaint to include such information (2"The Pink Sheet," Nov. 26, 2007, In Brief).

Gaining Standing On "Short Stature" Claims

Rost submitted a revised complaint in January citing more than 200 Medicaid reimbursement claims for Genotropin with diagnosis codes indicating the treatment was for "short stature." The claims, covering the period 2001 to 2006, were for patients in Indiana.

In a motion to dismiss the complaint Pfizer said Rost "does not identify which physicians allegedly submitted these claims nor plead any facts suggesting that Pharmacia promoted Genotropin to these doctors at all, much less for an off-label use."

Pfizer also contends that "short stature" was listed as a therapeutic use in the drug compendium DRUGDEX even before the alleged Medicaid claims were filed and thus the claims were for a "medically accepted indication" and reimbursable under Medicaid.

Compendium Listing Is Not Enough

But the government dismisses this defense. "First, the fact that an off-label use is listed in a statutorily recognized compendium does not necessarily mean that the use is supported by the compendium citation, so that, in some circumstances, a use that is listed may not qualify as a 'medically accepted indication' that is covered by law," it states.

"Second, even if an off-label use is supported by a citation in a compendium, a claim nevertheless may be false for any other number of reasons (if sufficiently pled) and thus present an alternative ground for FCA liability."

The government would also give Rost leeway in citing specific claims of fraud. Under the Federal Rules of Civil Procedure a party alleging fraud "must state with particularity the circumstances constituting fraud."

"The identification of specific false claims is not an absolute prerequisite to satisfying the particularity requirement" in False Claims Act cases, the government states. "So long as the complaint as a whole is sufficiently particular to strengthen the inference of fraud beyond possibility, a court may conclude, as this one has in other cases, that Rule 9 (b) is satisfied."

Rost's attorney Labaton said this means that an individual filing an FCA suit does not need to provide the actual claim at the initial pleading to get discovery and get the case off the ground.

The government further states that a complaint does not have to allege that the defendants themselves made a false statement. Defendants "may be liable if they caused a third party to make a false statement to get a false claim paid," the government says.

DoJ Settlement Excludes Short Stature

Last year Pharmacia pled guilty to off-label promotion and receiving kickbacks from a pharmacy benefit manager for a contract to distribute Genotropin in a $34.7 million settlement with the U.S. Attorney's Office in Boston (3"The Pink Sheet," April 9, 2007, p. 3). Rost cites the settlement in his complaint, saying it resulted from the company's illegal marketing campaign.

But in a court filing in support of its motion to dismiss the complaint, Pfizer says the settlement with DoJ related to the promotion of Genotropin for anti-aging use by adults. "The settlement documents did not refer to the False Claims Act, to any pediatric use of Genotropin, or to use for 'short stature,'" Pfizer states.

Pfizer has faced other allegations of fraudulently promoting unapproved uses of a drug. In 2004 it paid $430 million to settle a Department of Justice investigation of off-label marketing of its epilepsy drug Neurontin (gabapentin). A class action is pending before the Massachusetts district court in which plaintiffs seek reimbursement for the off-label promotion.

Judge Patti Saris ruled last year that off-label prescriptions of Neurontin were approximately 13 percent of total scripts prior to the company's off-label promotion of the drug for pain, migraine and psychiatric use and 90 percent of total scripts after the off-label campaign.

Rost's amended complaint, in which he alleges more than one-fourth of Genotropin prescriptions to children were for unapproved uses, is before Judge Saris.

The Washington Legal Foundation filed an amicus brief May 1 in support of Pfizer's motion to dismiss Rost's amended complaint. WLF said if the suit is allowed to proceed it "could harm public health by reducing public knowledge regarding beneficial off-label uses of FDA-approved products."

- Brenda Sandburg (b.sandburg@elsevier.com)