Monday, March 03, 2008

Employment Law 360: "Ruling comes as the latest blow to Pfizer in its legal wrangling with Rost."

I'm always amazed by Ed Silverman and how he finds out stuff . . . anyway, his story Pfizer Calls Rost Lazy, But Can’t See His Assets is an interesting read.

Turns out Employment Law 360 also wrote a story:

Ex-Exec Can Shield Info In Pfizer Whistleblower Spat

Portfolio Media, New York (February 29, 2008)--In a whistleblower case over Pfizer Inc.’s alleged illegal marketing of human growth hormone Genotropin, a judge has denied Pfizer Inc.’s bid to force a former executive to turn over information as to whether he made adequate efforts to look for work after he was fired.

In a memorandum opinion handed down Thursday in the U.S. District Court for the Southern District of New York, Magistrate Judge Gabriel W. Gorenstein said Pfizer had failed to show that the information it was seeking from plaintiff Peter Rost was relevant.

Judge Gorenstein granted Rost's cross-motion for a protective order with respect to the information.

Rost, a former Pfizer marketing vice president, has accused Pfizer and its unit Pharmacia Corp. of off-label marketing for Genotropin that boosted the company’s sales by as much as $50 million in 2002 alone.

Rost has claimed many of those sales came at the expense of the government through Medicaid, which generally does not give reimbursements for off-label drug uses.

Since Pfizer discharged Rost in 2005, he has not obtained comparable employment, court documents said. Rost’s expert has calculated Rost’s economic losses for the period after his termination at over $9 million.

In an effort to determine whether Rost fulfilled his duty to mitigate his damages by making adequate efforts to look for work after he was fired, Pfizer had sought documents and deposition testimony that would reveal Rost’s assets during the period after he left Pfizer.

The company said the existence of significant assets could explain Rost’s “lackadaisical attitude toward finding meaningful employment.

Judge Gorenstein said Thursday that while an individual’s assets are relevant to his motive to look for work, Rost’s subjective motivations for taking particular actions to find alternative work were irrelevant to the question of whether his conduct was objectively reasonable.

Judge Gorenstein also rejected Pfizer's contention that Rost might argue at trial that his lack of resources meant that he did not have the financial means to undertake certain steps to mitigate – for example, to purchase an airplane ticket to a distant city for a job interview.

“Rost has conceded that he will make no such argument and, more broadly, that he will not raise for any reason the issue of his assets or lack thereof following his termination from Pfizer,” the judge said.

In light of these concessions, Judge Gorenstein said, Pfizer had not shown that Rost’s assets were relevant to any issue in the case.

The ruling comes as the latest blow to Pfizer in its legal wrangling with Rost.

In a separate but related case in November, the U.S. Court of Appeals for the First Circuit vacated the dismissal of another suit filed by Rost.

The U.S. District Court for the District of Massachusetts had tossed the qui tam case in September 2006 for lack of jurisdiction. But the First Circuit said that though Rost did not meet proper pleading requirements in the suit, it found there was no obvious reason why a district court did not allow him leave to amend his complaint.

Rost had based his case on information from Pfizer and Pharmacia's marketing methods, but the district court found that, based on his evidence, Rost’s case was speculation.

The circuit court agreed with the lower court that the allegations in Rost's complaint were not sufficient for a False Claims Act action because they did not involve claims for government reimbursement.

The circuit court affirmed the district court's ruling that Pfizer's confidential disclosure regarding its Genotropin marketing practices to the U.S. Department of Justice and the Department of Health and Human Services was not a “public disclosure,” as defined under the FCA.

In May 2003, after Rost's suit was filed, Pfizer contacted the HHS to disclose information about Pharmacia and its off-label marketing and distribution of Genotropin. Pfizer also voluntarily disclosed its off-label marketing with Medicare and Medicaid fraud investigators.

Those disclosures, however, were not made public.

The FCA prohibits attempts to prevent “parasitic” actions from relators by preventing qui tam suits based on information within the public domain or that the relator did not otherwise discover.

Pfizer claimed that its self-disclosure of marketing activities to the HHS and DOJ constituted “public disclosure of allegations” and thus barred Rost's action.

In November, the circuit agreed with the district court that the Pfizer's disclosures were not public.

Rost was in charge of worldwide marketing for Genotropin, a manmade, human-growth hormone. The U.S. Food and Drug Administration approved Genotropin to treat certain hormonal deficiencies in children and adults.

However, Pharmacia began marketing and selling the drug for other uses, such as increasing growth in short children and delaying the aging process in adults.

Rost launched a legal assault against Pfizer in June 2003, alleging violations of the FCA. One suit, filed in a Massachusetts court, was unsealed in November 2005 after the U.S. decided not to intervene in the case.

Rost, who began working for Pharmacia in 2001, based his claims on several alleged practices by the drug companies.

The practices included encouraging sales representatives to promote Genotropin for off-label uses; paying doctors through a Genotropin research program; granting discounts to distributors known to target the off-label market; and hiring physicians as consultants to prescribe Genotropin for off-label uses.

Rost claimed that 60% of all adult and 25% of all pediatric sales of Genotropin were for off-label uses.

Rost was fired from Pfizer in December 2005 after his complaint was unsealed. His allegedly wrongful termination became the subject of a separate but related lawsuit filed the same month in the Southern District of New York.

The suit also resulted in a criminal investigation conducted by the U.S. attorney's office in Massachusetts. In April, the office announced that Pfizer would plead guilty and pay a fine for violating an anti-kickback statute through Genotropin-related payments to doctors.

Pfizer paid $34.7 million to resolve Genotropin-related investigations conducted by the HHS, DOJ and FBI.

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