Pharmacia & Upjohn Company Inc. unit has pleaded guilty to offering a
kickback in connection with the sale of its human growth hormone product.
The Wall Street Journal, New York Times, and Washington
Post ignored the story.
Why is unclear.
The settlement was a complicated one, negotiated by Jeremy
Sternberg and Susan Winkler of the U.S. Attorney�s office in Boston and by
Pfizer attorney Ethan Posner.
Posner is a partner at Covington & Burling in
Posner did not return calls seeking comment for this story.
A second Pfizer unit, Pharmacia & Upjohn Company LLC,
entered into a deferred prosecution agreement for illegally promoting its human
growth hormone drug Genotropin for such off-label uses as anti-aging, cosmetic
use and athletic enhancement.
The companies will pay a total of $34.7 million in fines and
As a result of the plea agreement and the deferred prosecution
agreement, Pfizer Inc. was granted a non-prosecution agreement.
Nice deal, if you can negotiate it.
U.S. Attorney Michael Sullivan said Pfizer �acted
responsibly� for voluntarily and fully self-disclosing the off-label promotion
This ticked off Peter Rost.
Rost was a vice president at Pfizer when he discovered the
criminality and blew the whistle.
Rost has two lawsuits pending against Pfizer.
One lawsuit accuses Pfizer of violating the False Claims
Act. That lawsuit is pending on appeal to the First Circuit Court of Appeals in
The other -- for wrongful dismissal -- is in discovery.
How come the Justice Department is praising Pfizer and not
�The Justice Department praised Pfizer for self-reporting,�
Rost told Corporate Crime Reporter. �But Pfizer would have done nothing
if I didn�t twist its arm. I was floored when I read the press release. They
have one guy who lost his career, lost his job for doing the right thing. That
would be me. And they praised the company that fired me?�
In fact, the U.S. attorney�s criminal investigation was
triggered by the filing of Rost�s False Claims Act case.
Rost documents the history of the case in his book, The
Whistleblower: Confessions of a Healthcare Hitman.
And Rost testified twice before the federal grand jury in
Boston that investigated the Pfizer criminal wrongdoing.
And yet the federal government refused to join Rost in his
False Claims Act case.
�Not only didn�t they join in the False Claims Act case,
they didn�t even say thank you,� Rost said. �They praised Pfizer, but not me.
Instead, in the press release they negotiated with Pfizer, they state that �Pfizer
acted responsibly when it self-disclosed to various federal government agencies
in May 2003.� There�s not a word about the whistleblower that Pfizer fired, or
that the whistleblower fought since October 2002, trying to get the company to
rectify and disclose the problems.�
Rost said his lawyers will seek to open negotiations with
prosecutors in Boston this week to reach a settlement.
The Pfizer unit that pleaded guilty will pay a criminal fine
of $19.98 million.
And federal prosecutors boasted that this company will be �excluded
permanently from participation in all federal health care programs.�
Translated: the unit that pleaded guilty is an empty closet
somewhere inside the Pfizer beast --t here is probably nothing to exclude.
Federal officials alleged that Pharmacia violated the
federal anti-kickback law by offering to make $12.3 million in excess payments on
a distribution to a pharmacy benefit manager in the expectation of obtaining
improved positioning for its drug products.
Federal officials alleged that the other unit -- Pharmacia
& Upjohn LLC -- illegally promoted and distributed Genotropin.
Genotropin was approved by the Food and Drug Administration
solely for the treatment of children with growth related diseases.
Instead, Pharmacia engaged in the unlawful promotion of the
drug for uses not approved by the FDA such as anti-aging, cosmetic use and athletic
This unit -- the LLC unit -- probably has something to lose.
That�s why it wasn�t forced to plead guilty. Instead, it was granted a deferred
Under the deferred prosecution agreement -- which lasts for
36 months -- the company will pay $15 million and cooperate with ongoing growth
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