Dr. Rost provides services as a pharmaceutical marketing expert witness. For more info see: Drug Expert Witness. Dr. Peter Rost email. Copyright © 2006-2013 InSync Communication. All rights reserved. Terms of use agreement, privacy policy and the computer fraud and abuse act.


Peter Rost, M.D., is a former Pfizer Marketing Vice President providing services as a medical device and drug expert witness and pharmaceutical marketing expert. Judge Sanders: "The court agrees with defendants' view that Dr. Rost is a very adept and seasoned expert witness." He is also the author of Emergency Surgery, The Whistleblower and Killer Drug. You can reach him on rostpeter (insert symbol) Please read the terms of use agreement and privacy policy for this blog carefully.


Below are some comments from other blogs on recent events related to:

PFIZER, INC., et al.,
Docket No. 03-CV-II084-PBS


peter-rost-4Last February, the controversial gadfly and former Pfizer exec cleared a hurdle in his ongoing whistleblower lawsuit against Pfizer. In a filing, Rost cited approximately 200 instances in Indiana which Genotropin, a human growth hormone, was marketed by Pharmacia (which was bought by Pfizer) for unapproved uses, such as combating aging in adults and treating short stature in children.

Providing such detail was needed for the case to proceed. And the move signaled two potentially significant developments. One is the long-term implication for Pfizer, should Rost ultimately prevail. The other is that his efforts may serve as a template for other whistleblowers who are similarly stymied by federal judges seeking details that are, otherwise, very hard to come by

Pfizer, however, last month turned around and argued that fraud was not involved because Genotropin was listed in three major pharmaceutical compendia, such as Drugdex and the US Pharmacopeia, which meant that state Medicaid programs would likely be required to issue reimbursements anyway. (These is a lot of background reading, but if you wish to do so, please look here, here and here).

Now, though, the Department of Justice, which declined to join Rost’s case, has taken a position favorable to Rost by filing a statement of interest, citing concerns with overall interpretation of law. (Look here). The motion is significant, because the DOJ essentially rebuts the key points Pfizer is using to get the case dismissed. By doing so, this may increase the likelihood that the case will proceed toward discovery.

In its filing, the DOJ argues that, even if an off-label use is listed in a compendium, that is not the same as being supported by the compendium citation. “….in some circumstances, a use that is listed may not qualify as a medically accepted indication that is covered by law,” the DOJ attorneys write.

The DOJ makes three other arguments against Pfizer’s position: even if an off-label use is supported, there may be other grounds for a false claim; Pfizer may still be liable if the drugmaker caused a third party to make a false statement or file a false claim; and that a complaint should sufficiently provide info about the inference of fraud beyond merely the possibilities, and is not always necessary to file particular info about false claims submitted to the government for payment.

Pharma Manufacturing:

DOJ Supports Peter Rost’s Appeal in Pfizer Genotropin Case

The Department of Justice is reportedly supporting Peter Rost’s appeal of the prior qui tam case.

To quote from the legal brief, “the allegation of a specific false claim is not an absolute prerequisite to pleading a viable FCA claim….The strength of the inference of fraud on the government may be measured by, for example, factual or statistical evidence tending to show fraud….The U.S. submits that it is not aware of any billable diagnosis code for anti-aging use that would be reimbursable by Federal healthcare programs….”

You can plow through the legalese yourself in the text pasted beneath this post.

Rost says he has decided to take a much more serious approach to his blog, which is now called the Pharma Law Blog. That’s in addition to his Expert Witness blog. He’d once likened his blog to an online pharma-related Colbert Report. Not so the new ones….”No more messing around,” he writes…

What, no more cheerleader drug rep photos? Promises to be interesting (and a whole lot more valuable, since the other pharma law blogs deal mainly with FDA, IP and issues other than sales and marketing).


Case 1:03-cv-11084-PBS Document 118 Filed 05/12/2008 Page 1 of 13






PFIZER, INC., et aI.,


Docket No. 03-CV-II084-PBS

The Honorable Patti B. Saris




The United States, real party in interest in this action, hereby moves to submit this Statement ofInterest pursuant to 28 U.S.C. § 517 to respond to certain arguments raised in the context of defendants’ Motion to Dismiss Relator’s First Amended Complaint. The United States remains a real party in interest in this matter, even where it has not intervened in the action. United States ex reI. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220,231 (1st Cir. 2004). The False Claims Act (FCA), 31 U.S.C. § 3729 et seq., is the United States’ primary tool used to redress fraud on the government. As such, the statute should be read broadly to reach all fraudulent attempts to cause the government to payout sums of money. United States v. Neifert- White, 390 U.S. 228, 233 (1968). Thus, the United States has a keen interest in the development ofthe law in this area and in the correct application ofthe law in this, and similar, cases.4

4 The brief of amicus Washington Legal Foundation (WLF) offers this Court its views as to what information manufacturers of medical devices and drugs may lawfully disseminate about the off-label uses of their products. Defendants, however, do not seek dismissal ofthis case on the grounds that the off-label marketing alleged in the First Amended Complaint was lawful.

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The United States submits this brief to make four points. 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. Second, even if an offlabel use is supported by a citation in a compendium, a claim nevertheless may be false for any other number of reasons (if sufficiently plead) and thus present an alternative ground for FCA liability. Third, as to section (a)(2) ofthe FCA, which requires the existence ofa false record or statement to get a false or fraudulent claim paid or approved, a complaint need not allege that the defendants themselves made a false statement - the defendants may be liable ifthey caused a third party to make a false statement to get a false claim paid. In addition, false statements include not only affirmative misrepresentations but also material omissions so that the existence of either one may suffice to satisfy the false statement requirement of section (a)(2). Fourth, the identification of specific false claims is not an absolute prerequisite to satisfying the particularity requirement of Rule 9(b) in FCA cases. 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. Nonetheless, the United States submits that if WLF’s arguments have not been raised or briefed by the parties, are not relevant to the instant motion to dismiss, and need not be addressed by this Court. Indeed, WLF’s assertion that it “successfully challenged the constitutionality of certain FDA restrictions on speech about off-label uses and has in place a permanent injunction against enforcement ofthose restrictions” is incorrect. There is no permanent injunction against the enforcement ofFDA’s guidance as WLF asserts. Washington Legal Foundation v. Henney, 128 F. Supp. 2d 11, 15-16 (D.D.C. 2000) (denying WLF’s motion to confirm and enforce injunction, stating that the Court ofAppeals “vacated all ofthis Court’s previous constitutional rulings on the matter”).


Case 1:03-cv-11084-PBS Document 118 Filed 05/12/2008 Page 3 of 13

the Court finds that relator’s complaint fails to meet that test and is subject to dismissal under Rule 9(b), then it need not reach the other issues addressed herein.


In order to participate in the Medicaid program, a State must have a plan for medical assistance that has been approved by the Centers for Medicare and Medicaid Services (CMS), which administers the program on behalfofthe Secretary of Health and Human Services. The state plan must specify, among other things, the specific kinds of medical care and services that will be covered. 42 U.S.C. § 1396a(a)(1 0) and (17). If the plan is approved by the Secretary, the State thereafter is eligible for federal financial participation,

i.e., reimbursement by the federal government for a specified percentage of the amounts that qualify as medical assistance under the state plan. Id.

at §§ 1396b(a)(I), 1396d(b).

States are accorded a broad measure of flexibility in tailoring the scope and coverage of their plans to meet the particular needs oftheir residents and their own budgetary and other circumstances. While the Medicaid Act requires States to provide certain basic services, the Act permits, but does not require, States to cover prescription drugs, although most States choose to do so. 42 U.S.C. § 1396d(a)(12). In 1990, Congress enacted the Medicaid Drug Rebate Statute, codified at 42 U.S.C. §1396r-8, to “establish a rebate mechanism in order to give Medicaid the benefit ofthe best price for which a manufacturer sells a prescription drug to any public or private purchaser.” H.R. Rep. No. 881, 101st Cong., 2d Sess. 96 (1990). That statute prohibits federal financial participation for covered outpatient drugs unless there is a rebate agreement in effect under section 1396r-8. See 42 U.S.C. §§ 1396b(i)(10)(A) and 1396r-8(a)(I). Once a drug manufacturer has entered into


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a rebate agreement for a covered outpatient drug, a State is generally required to cover that drug under the state plan. However, there are several provisions ofthe Medicaid Act that permit a State to exclude or restrict coverage, at least two of which are potentially implicated in this case. 42 U.S.C. § 1396a(a)(54); H.R. Rep. No. 881 at 97,98. A State may restrict from coverage or exclude altogether certain drugs or classes of drugs, or certain medical uses, such as drugs used for, among other things, cosmetic purposes. 42 U.S.C. § 1396r-8(d)(l)(B)(ii). A State also may exclude or restrict coverage of a drug where “the prescribed use is not for a medically accepted indication.” 42 U.S.C. § 1396r-8(d)(l)(B)(i).5 Under the statute, a “covered outpatient drug” includes a drug dispensed by prescription and approved as safe and effective under the Federal Food, Drug, and Cosmetic Act (FDCA), 21U.S.C. §§ 355

& 357, but does not include “a drug or biological used for a medical indication which is not a medically accepted indication.” 42 U.S.C. § 1396r-8(k)(2), (3). The statute defines “medically accepted indication” as: any use for a covered outpatient drug which is approved under the [FDCA], or the use of which is supported by one or more citations included or approved for inclusion in any ofthe compendia described in subsection (g)(1)(B)(i) of this section. Id. at § 1396r-8(k)(6). The three compendia described in subsection (g)(I)(B)(i) are the American Hospital Formulary Service Drug Information, the United States Pharmacopeia-Drug Information, and the Drugdex Information System. Id. at § 1396r-8(g)(l)(B)(i).

5In addition, under the terms set forth in the Medicaid Act, a State also may adopt a prior authorization program, maintain a formulary, impose limits on prescription quantities to discourage waste, and address instances of fraud or abuse by individuals. 42 U.S.C. § 1396r8( d)(4)-(6). It does not appear that any of these potential restrictions are at issue in this matter.


Case 1:03-cv-11084-PBS Document 118 Filed 05/12/2008 Page 5 of 13

I. The Term “Supported By” Requires That a Compeudium Citation Corroborate a

Particular Use.

One question raised by the parties here is what is necessary to satisfy the statutory requirement that a use is “supported by one or more citations” in a compendium. See id. at § 1396r-8(k)(6) (defining “medically accepted indication”). As both relator and defendants recognize, the mere existence of a compendium citation is not sufficient to meet this standard. Common usage ofthe term “supported by” generally requires some form of corroboration or validation. See American Heritage Dictionary of the English Language, 4th ed. (2000) (”to furnish corroborating evidence for”); Cambridge Dictionary ofAmerican English, 2d ed. (2006) (”to show (something) to be true … New evidence

supports his theory”); see,~, In re Pharmaceutical Indus. Average Wholesale Price Litig., 460 F. Supp. 2d 277,284 (D. Mass. 2006) (”Dictionaries ofthe English language are a fundamental tool in ascertaining the plain meaning of terms used in statutes and regulations.”). Interpreting the definition of medically accepted indication to require only “citation in the compendia” would be problematic because it would fail to give meaning to the words “supported by,” and would render that phrase superfluous. See United States v. Flores, 968 F.2d 1366, 1371 (Ist Cir. 1992). Furthermore, CMS, the agency with responsibility to administer the statute at issue, has reiterated that the statutory definition of medically accepted indication “requires coverage of off-label uses of FDA-approved drugs for indications that are supported (as opposed to listed) in the compendia.” See CMS Release No. 141 (emphasis added) (Attached to Relator Brief as Ex. 4). Because the agency’s interpretation ofthis statutory provision is reasonable, it is entitled to deference by this Court. See Federal Express Corp. v. Holowecki. et aI., 128 Sup. Ct. 1147, 1156 (2008). Moreover, a basic practical consideration is that Drugdex, the compendium relied on by


Case 1:03-cv-11 084-PBS Document 118 Filed 05/12/2008 Page 6 of 13

defendants here, classifies some indications as “not effective” and describes others as “controversial.” See Def. Brief at Ex. A. Accordingly, whether a particular use is “supported by” a compendium citation may depend on a variety of factors, including the type of drug and indication at issue, the compendium’s assessment of the drug’s efficacy in treating the indication, the content of the compendium citation, and the scope and outcome ofthe studies as described in the compendium. The only other case to have considered this provision, Edmonds v. Levine, 417 F. Supp. 2d 1323, 1339 (S.D. Fla. 2006), is distinguishable because ofthe circumstances in which the case was presented, and in particular because the decision predated CMS Release 141, which was released three months after the decision in Edmonds. The Edmonds case arose out of certain Medicaid beneficiaries challenging the State of Florida’s adoption of a policy to make an independent evaluation of off-label uses for the drug Neurontin that resulted in the State’s denying reimbursement for certain uses ofthe drug that were listed as effective in Drugdex, but allowing reimbursement for other uses listed as ineffective. The Court need not address the various issues raised in Edmonds stemming from whether the State’s action was permissible. The relevant point here is that, as both relator and defendants recognize and CMS Release 141 has made clear, the statutory language of”supported by” means something other than merely “listed in.”


Case 1:03-cv-11084-PBS Document 118 Filed 05/12/2008 Page 7 of 13

As a final issue relating to coverage, it should be noted that the Medicaid statute permits a State to exclude or restrict reimbursement of an otherwise “covered outpatient drug” in certain circumstances.6 See 42 U.s.C. § 1396r-8(d); supra at 3 & n. 1.

II. Coverage of an Off-label Indication Does Not Negate All Potential FCA Liability.

A claim may be false for any number of reasons regardless ofwhether it is submitted for a use supported by a citation in a compendium. For example, a claim may be ineligible for payment if a physician submitted a claim for reimbursement for which he received a kickback in exchange for prescribing a particular drug.

See,~, United States v. Rogan, 517 F.3d 449 (7th Cir. 2008); Parke-Davis, 2003 WL 22048255, at *7. Likewise, a claim may be ineligible for payment if the prescription were signed by a person without a medical license or for a patient that did not exist. See,~, United States ex reI. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370,378-79 (5th Cir. 2004) (allegation that services were performed by an unlicensed and unsupervised physician states a claim under FCA). Finally, a claim may be rendered false if a drug manufacturer falsified studies or engaged in other unlawful, fraudulent conduct in the promotion of a drug or to procure FDA approval or inclusion in a compendium. See, ~ United States v. Dynamics Research Corp., 2008 WL 886035, *10 (D. Mass. Mar. 31, 2008) (”[W]here a claim for payment is the result of a fraudulent process-bid rigging, self-dealing, etc. such that the reliability and trustworthiness of a claim is compromised, the claim may be

6 Notably, this case does not present - at least not at this time - the question this Court left open in Parke-Davis as to whether States have discretion to cover off-label uses that are not supported by a citation in the compendia. See United States ex reI. Franklin v. Parke-Davis et aI., 2003 WL 22048255, at *3 (D. Mass. Aug. 22, 2003). The Parke-Davis defendants argued that States are permitted to cover prescriptions for off-label uses even if those uses are not supported by a citation in the compendia. In this case, defendants contend that the off-label indication of”short stature” is supported by compendium citations.


Case 1:03-cv-11084-PBS Document 118 Filed 05/12/2008 Page 8 of 13

considered false under the PCA despite its facial accuracy.”); United States v. Incorporated Village ofIsland Park, 888 P. Supp. 419,439 (E.D.N.Y. 1995) (”[T]he [PCA] is violated not only by a person who makes a false statement or a false record to get the government to pay a claim, but also by one who engages in a fraudulent course of conduct that causes the government to pay a claim for money.”). Thus, the mere fact that a particular use is a “medically accepted indication” does not eliminate the possibility of fraudulent conduct or abuse that could render the claim false and ineligible for payment.

III. False Statements Under Section (a)(2) of the FCA.

This Court has held that illegal off-label marketing that results in the submission of impermissible claims for reimbursement states a claim under the PCA. Parke-Davis, 2003 WL

22048255, at *2. PCA liability exists so long as the defendants knowingly cause a false claim to be submitted by a provider to the United States. Id. Proof of falsity could entail a showing that the provider sought payment from a federal health care program for a use that was off-label and not covered by that program. Id. at *3. It is not necessary also to show (or allege) an express falsehood from the defendant to the provider to satisfy the “falsity” element of section (a)(I). Id. at *1. Defendants correctly observe that to state a claim under section (a)(2), there must be a false record or statement. To satisfy this requirement, defendants assert that relator needed to allege “both that Pharmacia made a false statement and that this false statement was made to get a false claim paid by the government.” See Def. Brief at 11. However, requiring a false statement to be made by the defendant drug company is contrary to the plain language ofthe PCA. Although section (a)(2) requires the existence ofa false statement, it does not require the -8-

Case 1:03-cv-11 084-PBS Document 118 Filed 05/12/2008 Page 9 of 13

false statement to be made by the defendant. Section (a)(2) imposes liability on a defendant so long as it “caused” another, such as a hired consultant, to make a false statement. Contrary to what defendants’ brief implies (Def. Br. at 11-12), for a statement to be “false,” it need not be an affirmative misrepresentation; a material omission will suffice: “[H]alf the truth may obviously amount to a lie, if it is understood to be the whole.” W. Page Keeton.Prosser & Keeton on the Law of Torts § 106, at 738 (5th ed. 1984); see Luckey v. Baxter Healthcare Corp., 183 F.3d 730, 732 (7th Cir. 1999) (observing that a half-truth may amount to a false statement under the FCA in certain circumstances); United States ex reI. Schwedt v. Planning Research Corp., 59 F.3d 196, 199 (D.C. Cir. 1995) (finding that false progress reports may constitute false statements under the FCA); United States ex reI. Fry v. Guidant Corp., 2006WL 2633740, at
*10-11 (M.D. Tenn. Sept. 3, 2006) (finding representation was rendered false by concealment of material information); United States ex reI. Kneepkins v. Gambro Healthcare. Inc., 115 F. Supp. 2d 35, 43 (D. Mass. 2000) (an “omitted material fact,” such as the existence of illegal kickbacks, may be actionable under the FCA). Thus, a statement urging a physician to prescribe a drug for an unapproved, off-label use could well amount to a half-truth and satisfy the false statement requirement of section (a)(2), where, for example, the drug sales representative fails to mention that the evidence does not support the drug’s efficacy for the use he or she is promoting or the FDA has specifically concluded that the drug is not safe or effective for that use.7
7 Notably, despite defendants’ suggestion to the contrary (Def. Br. at 11, n. 8), the fact that the Medicaid Act provides for coverage for off-label uses that are supported by citation in certain compendia is irrelevant to whether a drug company made a false statement. To the extent that the FDA Modernization Act, 21 U.S.C. § 360aaa, provided a safe harbor for the dissemination of certain scientific information if a manufacturer complied with the requirements


Case 1:03-cv-11084-PBS Document 118

IV. FCA Pleading Requirements.

Filed 05/12/2008 Page 10 of 13

Of course, if a relator is claiming that the defendant drug company caused the providers to submit these false claims, the relator must adequately allege such causation. See Parke-Davis, 2003 WL 22048255, at *4-5; United States ex reI. Cantekin v. University ofPittsburgh, 192 F.3d 402, 416 (3d Cir. 1999). The relator need not allege an express false statement to satisfy the causation element, though such evidence would be one way the relator could do SO.8

Defendants argue that relator’s complaint fails to set forth with sufficient particularity that conduct by defendants caused false claims to be submitted to federal health care programs. Defendants also argue the complaint does not sufficiently allege that the two off-label uses raised by relator (adult anti-aging and pediatric short stature) resulted in claims being submitted to federal health care programs that were false. Finally, Defendants further assert that relator has failed to identify specific adult anti-aging claims and that regardless of whether relator has identified specific pediatric short-stature claims submitted to federal health care programs, he set forth in the statute, the provision expired on September 30, 2006, and Congress has not renewed it. Moreover, the FDA draft guidance on

Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices states that it contains “Nonbinding Recommendation, Draft - Not for Implementation” and that the FDA is accepting comments on the draft.

8 WLF wrongly suggests that the defendant must have instructed or directed that claims be submitted or how to do so in order for liability to exist for “causing” the submission ofa false or fraudulent claim. As the Supreme Court has recognized, the prototypical FCA case involving the “causing” of the submission of a false claim - when a subcontractor submits a false invoice to a prime contractor which, in tum, submits the invoice to the United States - rarely involves a subcontractor affirmatively instructing or directing the prime contractor to submit a false claim. See United States v. Bomstein, 423 U.S. 303, 309 (1976); Marcus v. Hess, 317 U.S.537, 544-45 (1943). -10-

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has failed to provide sufficient details about those claims.9 To the extent that defendants contend that relator’s complaint must fail because it did not identify specific false claims or do so with sufficient particularity, defendants seek to impose too rigid a pleading standard in FCA cases. As a general matter, the allegation of a specific false claim is not an absolute prerequisite to pleading a viable FCA claim. Although FCA liability attaches to the claim for payment, the First Circuit and this Court have held that whether specific claims must be identified for a complaint to satisfy Rule 9(b)’s particularity requirement will depend on the circumstances of each case. See United States ex reI. Rost v. Pfizer, Inc., 507 F.3d 720, 732 (Ist Cir. 2007); United States ex reI. West v. Ortho-McNeil Pharm., Inc., 2008 WL 435497, at *18 (D. Mass. Feb. 19, 2008). Thus, in off-label cases, where the alleged false claims were submitted not by the defendant, but instead by a third party, a relator “need not allege the details of particular claims, so long as ‘the complaint as a whole is sufficiently particular to pass muster under the FCA.’” See Rost, 507 F.3d at 732 (quoting Karvelas, 360 F.3d at 225).10 In evaluating such

9 Whether the requisite knowledge under the FCA was sufficiently plead does not appear

to be a focus of defendants’ brief and, in any event, questions relating to a defendant’s knowledge typically cannot be resolved at the pleadings stage of a case. Accordingly, the Court need not address this issue. It bears noting here, however, that if a defendant knew or acted with reckless disregard as to the truth or falsity of claims that they caused to be submitted, “any possible ambiguity in the regulations is water under the bridge.” Minnesota Ass’n ofNurse Anesthetists v. Allina Health System Corp., 276 F.3d 1032, 1053 (8th Cir. 2002). 10 Such an analysis is consistent with FCA cases in which courts have found that when a complaint sets forth with particularity allegations of a fraudulent scheme or course of conduct, it is not also necessary to identify specific claims because doing so adds little to the sufficiency of the complaint as a whole. See,~, United States ex reI. Singh v. Bradford Regional Medical Center, 2006 WL 26425 I 8, at *7 (W.D. Pa. 2006) (”[T]he falsity of the instant claims does not turn on anything unique to any individual claim or that would be revealed from an examination of any claim, but rather the claims ‘are false because ofthe improper financial arrangements


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matters, “the strength ofthe inference of fraud on the government” may be measured by, for example, factual or statistical evidence tending to show fraud beyond possibility. See West, 2008 WL 435497, at *18. Given the posture ofthis matter, the unique circumstances ofthe drug at issue in this case, and to assist the Court in applying the standard here, the United States submits that it is not aware of any billable diagnosis code for an anti-aging use that would be recognized or reimbursable by federal health care programs.


The United States submits this brief regarding how to interpret and apply certain aspects ofthe Medicaid Act and the FCA. The United States takes no position on the sufficiency ofthe complaint herein.

Respectfully submitted,





/s/ Sara Miron Bloom

SARA MIRON BLOOM Assistant U.S. Attorney Suite 9200, One Courthouse Way Boston, MA 02210 Phone: (617) 748-3265



Civil Division, Commercial Litigation Branch P. O. Box 261, Ben Franklin Station between [defendant] and the physicians.”‘). -12-

Case 1:03-cv-11 084-PBS Document 118 Filed 05/12/2008 Page 13 of 13

Dated: May 12,2008 Washington, D.C. 20004 Phone: (202) 353-0426



Blogger Pharma Giles said...

Way to go, Doc...

Blogger insider said...

Never ever ever give up, ever!

Anonymous Anonymous said...

congrats from a current pfizer rep!!!


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