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Eli Lily skates after a federal judge tosses out a class action suit by angry investors. But the decision raises questions about the fairness of the law.

Sometimes there just doesn’t seem to be any justice in the world, or so the saying goes, but that all depends on who you ask. Drug-maker Eli Lilly, already battered by a number of other huge law suits concerning alleged misrepresentations about its all time best selling drug Zyprexa, is celebrating justice this week. The company will skate on a class action suit from Lilly investors who claim their investments were damaged by the company’s fraudulent actions.

The suit claims Lilly and numerous employees misrepresented or failed to disclose the link between Zyprexa and serious side effects, including weight gain and diabetes. It also cites the company’s illegal practice of marketing the drug for non-approved off-label uses, all of which negatively affected the company’s stock value. We’re wondering if Lilly’s new CEO John Lechleiter, briefly profiled in the Wall Street Journal’s Health Blog, will try to turn around the company’s marketing ethics as well as improve its stock picture.

But with several other large actions already against the company, including alleged marketing fraud, and $1.2 billion in payouts underway for thousands of Zyprexa deaths and injuries, one can only wonder how a judge could find against the investors who have taken a beating because of Lilly’s illegal actions.

Well, the answer is fairly straightforward, and shows that a judge doesn’t necessarily have to be in Lilly’s pocket to reach a verdict favoring Lilly. In this case, the judge doesn’t need to be changed, just the law.

According to Eastern District of New York Judge Jack B. Weinstein, the suit was dismissed because it wasn’t filed within the required two-year statute of limitations — two years from when plaintiffs “reasonably should have known” that they sustained damages because of Eli Lilly’s purported fraud.

And the judge is probably right. In his 82-page decision, the judge said what is referred to as ‘storm warnings’ about Zyprexa stretch back to the 1990s — he called it an “extended public debate” over Zyprexa — including numerous reports in the medical literature, by investment analysts, and presentations at medical conferences, dating back to within a year of the drug’s release in the mid 1990s.

Attorneys for the plaintiffs argued that the statute should have begun with three articles about Zyprexa in the New York Times in December, 2006. The suit was filed four months later on March 28, 2007. But the judge said that under ruling law, ‘storm warnings’ are available to the stock market and place reasonably astute investors on notice of the need for further inquiry — creating the hypothetical date that begins the two-year statute of limitations. The judge added that “individual unsophisticated investor’s lack of awareness is ignored; the law tilts the . . . balance against such a consumer. It applies the much-debated ‘caveat emptor’ [Let the buyer beware - Ed.] principle favoring greater and freer commerce by limiting litigation, and requiring dismissal of this case.”

“Let the buyer beware” — the principle that the seller of a product cannot be held responsible for its quality unless it is guaranteed, and the buyer alone is responsible for assessing the quality of a purchase before buying — just doesn’t cut it in a case like this.

A two-year statute of limitations favoring a criminal conspiracy is a very, very bad law, and Lilly — which hasn’t escaped its guilt for the thousands of sick, dying and dead Zyprexa patients — should not be allowed to skate from its investors either. American investors are the engine that helps drive business and industry, and this case just gives the whole concept another black eye.

NEXT: What about the ethics of the investors and brokers who ignore a decade of storm warnings about the dangers of Zyprexa? And more importantly, where was the FDA while people sickened and died? Perhaps dozing as usual in the shade of Big Pharma’s money.

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It’s a complicated issue, but once you sort through the details, it looks like Pfizer has pulled off a remarkably slimy example of putting marketing ahead of science.

Popular pharma-watcher Howard Brody, MD, PhD, has awarded a “brilliant sleaze” award to Pfizer Inc., the world’s largest research-based pharmaceutical company and numero uno in world-wide sales.

In his well-read blog, Hooked: Ethics, Medicine, and Pharma, Dr. Brody describes in painstaking detail how the company has schemed to increase sales of its major money-maker Lipitor, the anti-cholesterol statin drug, by deceiving physicians around the world with a questionable on-line heart attack risk assessment tool. Pfizer has been widely promoting use of the calculator, which indicates more patients are at risk — and therefore ripe for Lipitor prescriptions — than may be scientifically accurate.

The efficacy of the drug and of statins in general have been under considerable scrutiny lately, too, but that’s another matter, Dr. Brody says. “This entire theory of when statins are good for you is probably deeply flawed,” Dr. Brody says, “and as a whole shows how industry marketing has come to dominate science to an embarrassing extent. But for present purposes ignore all that. Imagine that the guidelines [for using statins] actually represent good science.”

He then goes on to explain how the NIH-based National Cholesterol Education Project (NCEP) developed two risk assessment tools, one automated, and the second a pencil-and-paper-based manual test. Higher risk for heart attack indicates a greater need for a statin drug like Lipitor. The differences in the two tests apparently were not unknown, but not widely known among the bulk of physicians who might prescribe statins.

According to Pfizer whistle-blower Dr. Jesse Polansky, who is embroiled in his own suit against Pfizer about alleged off-label marketing of Lipitor, the manual test mistakenly misclassifies a number of patients as high-risk who are actually at moderate risk, but never misclassifies patients downward by mistake. In fact, by finding more higher-risk patients, it does exactly what Pfizer would like it to do, which is increase Lipitor sales.

Two major Big Pharma players, AstraZenica and Merck, have risk calculators on their websites, but these are NCEP’s more accurate computerized calculators. Instead, Pfizer converted the paper-and-pencil test to an automated on-line version, and has since been promoting it’s use to physicians. Not only that, it appears Pfizer is distributing the computerized calculator to doctors as a PDA program, and distributing it by other on-line information sources.

Pfizer deserves a lot worse than the good doctor’s “brilliant sleaze” award. These are the kinds of actions that have destroyed not just the public’s trust in what was once an honorable industry, but the trust of medical institutions and the medical fraternity. Ethical breaches of this magnitude deserve hefty fines, and even prison time.

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Colorado’s new bill banning health insurers giving kickbacks to doctors to prescribe cheaper generics ignores Big Pharma’s similar, and even more lavish, practice in favor of their pricier brand name drugs.

In Colorado, where a bill is pending approval that bans health insurers from providing incentives (read “payola”) to doctors to switch patients’ drugs from more expensive brand names to cheaper generics, there’s nothing to deal with the Big Pharma’s equally offensive widespread practice of doctor bribery supporting brand names.

This is a big switcheroo from Massachusetts, where a bill is nearing approval that outright bans Big Pharma from bribing — sorry, from providing “incentives” — to doctors to encourage them to prescribe their brand name drugs. Even a federal bill is pending that requires Big Pharma to report to the feds any and all “gifts” made to physicians over a value of $25.

Lynn Parry, past president of the Colorado Medical Society which was involved in creating the Colorado bill, told the Associated Press that in Colorado, drug makers can still offer lunches or dinners to doctors to provide information about their drugs. “It’s not a hard sell by any means and I think they work as hard as they can to not directly influence, but they’re a business,” she said.

In his Pharmalot blog, Ed Silverman nicely sums up our opinion of Parry’s statement: “Hmmm . . . How much of a difference is there between incentives?”

To which I would add: Ms. Parry, wake up and smell the coffee. Lunches or dinners? What about free golfing trips to sunny tropical isles, expenses-paid conferences in exotic foreign lands, or expensive nights out on the town with hints at sexual favors?

Big Pharma’s lavish “incentives”, well documented by former pharma reps, make the health insurers paltry “incentives” look like garage-sale discounts.

Goodness knows why any doctor with a shred of integrity accepts kick-backs, bribes or “incentives” from the insurance industry or Big Pharma, under any guise or for any reason. But apparently most or many do, and the practice is getting worse, not better.

It’s fine to curb physician bribery by the insurance industry, but Colorado should take another look at Big Pharma’s billion-dollar doctor bribery system that it’s been using to great effect for years, and follow Massachusetts’ example. There should be no financial incentives from any quarter when it comes to patient health.

Let doctors make prescription decisions based on science, not a free lunch.

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A Colorado bill will prevent health insurers from offering incentives to doctors to prescribe cheaper generics rather than Big Pharma’s pricier brands.

An interesting development in the ongoing pharmaceutical doctor-bribing drama across the country is taking place in Colorado, where a bill is pending approval that bans health insurers from providing incentives (read “payola”) to doctors to switch patients’ drugs from more expensive brand names to cheaper generics.

Sen. Paula Sandoval, (D-Denver), sponsoring the Colorado bill, told Associated Press that a patient’s health should be a doctor’s primary concern. “There shouldn’t be any financial incentive interfering with that decision,” she said, adding that there have been reports of kickbacks from insurance companies and lawsuit settlements in other states, and the new bill would ensure it doesn’t happen in Colorado.

Of course, Kaiser Permanente, along with major insurance players AARP and the insurance industry’s Colorado Association of Health Plans, all oppose the bill. These are the folks who write the checks for brand-name prescriptions. More generics save them a bundle.

But believe it or not, major Big Pharma player Pfizer Inc., which ranks number one in the world in sales, was actively involved in helping Colorado’s medical society shape the bill. If doctors were to prescribe more generic replacements for Pfizer’s blockbuster cholesterol drug Lipitor, for example, which cranks out a whopping $13.5 billion in annual sales and accounts for nearly a third of Pfizer’s revenue and 40 percent of its profit, it could inflict serious damage.

We don’t need to ask why Pfizer has taken an interest in this bill. What we need to ask is why the state of Colorado and Sen. Sandoval in particular have brought in, or even allowed, an individual Big Pharma corporation with billions at stake to help draft a bill that keeps the billions rolling in?

That’s just inviting the fox in to help design the hen-house fence.

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Suit alleges the pharmaceutical giants violated state consumer protection laws and federal and state antitrust laws by delaying availability of cheaper, generic versions through trickery or deception.

Florida and Massachusetts are among 26 other states that are joined in an antitrust lawsuit against pharmaceutical companies for allegedly blocking access to cheaper drugs, costing the states millions of dollars in .

The suit alleges that Illinois-based Abbott Laboratories and French drug companies Fournier Industrie et Sante and Laboratoires Fournier, S.A., violated state consumer protection laws and federal and state antitrust laws by delaying availability of cheaper, generic versions of TriCor, a cholesterol lowering drug that last year accounted for more than $1 billion of Abbott’s sales.

The states’ complaint seeks relief in the amount of three times the amount of overcharges paid by states and consumers for TriCor, plus costs and civil penalties.  The states are also seeking injunctive relief, prohibiting Abbott and Fournier from engaging in similar anticompetitive practices in the future.

The states allege in U.S. District Court in Wilmington that the companies continuously made minor changes in the formulation of TriCor to prevent cheaper generic versions from being marketed. The complaint seeks triple the amount of damages incurred by the states’ public health agencies and individual consumers.

Ed Silverman in his Pharmalot blog reports that Abbott spokeswoman Melissa Brotz told the Associated Press that the company’s actions were lawful, that Abbott hasn’t prevented the marketing of drugs similar to TriCor, and that there are eight other products already available. Neil Hirsch, a spokesman for Fournier’s parent Solvay, told the AP Fournier hasn’t engaged in any wrongdoing and intends to vigorously defend itself against the allegations.

But Maryland Attorney General Doug Gansler said Abbott and Fournier obtained patents protecting TriCor from competition by deceiving the U.S. Patent Office with incomplete and misleading data. And Florida Attorney General Bill McCollum said Florida’s growing senior population faces ever increasing costs of prescription drugs, and the state “cannot permit drug companies to edge out competition and potentially less expensive generic alternatives.”

The states joining Massachusetts in the investigation and prosecution of this action against Abbott and Fournier are:  Florida, Arizona, Arkansas, California, Connecticut, Idaho, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New York, North Carolina, Ohio, Oregon, South Carolina, Texas, Vermont, Washington, West Virginia, Pennsylvania, and the District of Columbia.

Big Pharma’s obsession with profits at any cost is threatening to destroy what was once the envy of the world—the United States medical system.

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