Citizens use law to pursue drug firms

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Citizens use law to pursue drug firms 
Citing unfair competition and weak FDA oversight, consumer coalition
sues giant pharmaceutical companies

Bernadette Tansey, Chronicle Staff Writer
Sunday, November 23, 2003 
©2003 San Francisco Chronicle | Feedback


URL: sfgate.com/article.cgi?file=/chronicle/archive/2003/11/23/BUG5D37C851.DTL


An uprising is under way in California among patients and consumer
groups who think drug firms have been pushing their products too hard
while government regulators are taking the consequences too lightly.

Convinced that the Food and Drug Administration won't curb aggressive
marketing that can hurt patients and hike medical costs, the insurgent
citizen movement is using a controversial state consumer law to
challenge manufacturers. In civil suits against a range of drug and
biotech companies including Botox maker Allergan Inc. and drug giant
Pfizer, private citizens are turning to California's courtrooms to
change the ground rules for the industry.

The emerging consumer strategy, which bypasses FDA prerogatives,
alarms drug and biotechnology firms. In the most organized and
far-reaching effort, a Boston consumer coalition that blames drug
firms for soaring health care costs is bringing its fight to
California. The nationwide group, Prescription Access Litigation, is
challenging company practices ranging from drug advertising to
doctors' freebies.

PAL, an initiative of the watchdog group Community Catalyst, says the
FDA lacks the resources to rein in aggressive marketing that can
inflate the nation's prescription drug bill.

"To the extent they do any enforcement, companies take it as a cost of
doing business,'' said Renee Hodin, PAL's associate director.

The coalition is seeking heavy financial judgments from firms accused
of exaggerating drug benefits, touting products for unproven uses or
paying doctors to drum up expensive prescriptions.

The companies deny wrongdoing, while industry officials warn that the
lawsuits raise a nightmare scenario of state court judges in 58
counties setting their own rules for practices usually overseen by the
FDA.

Pfizer the major target 

Citizen actions under the state consumer law have hit a number of
firms in and out of California. But the biggest target is New York's
Pfizer Inc., the world's largest drug company. Pfizer is the defendant
in two actions sponsored by PAL, which has member groups in 34 states,
including California.

In the suits against Pfizer, PAL is seeking sweeping refunds to
California purchasers of two prescription drugs with combined sales
close to $2 billion. The consumer groups claim Pfizer subsidiaries
improperly promoted the drugs, Neurontin and Bextra, for uses not
approved by the FDA.

Pfizer maintains the actions by PAL are pre-empted by federal drug
laws. "The relief it seeks would frustrate Congress' intent to have
the FDA determine the 'truth' about the safety and efficacy of
drugs,'' Pfizer attorneys argued in a brief in the Bextra suit.

Far from being a tiny David confronting a drug industry Goliath, PAL
has teamed up with an ally closer to Pfizer's size in the world of
litigation -- the Seattle law firm Hagens Berman, a class-action
practice that represented 13 states in landmark litigation against the
tobacco industry.

Managing partner Steve Berman said the firm chose to file the Pfizer
suits in California for two reasons.

"It has, next to New York, the largest market share (in prescription
drug sales) of any one state,'' Berman said. "We feel a victory in
California would have a very big impact on company practices.''

Reason No. 2: California has one of the toughest consumer laws in the
nation.

The Unfair Competition Law is a tool used by state prosecutors to
combat anti-competitive or corrupt business dealings. It also allows
private citizens or groups to file suit in the name of the public.
When these suits succeed, judges can order a halt to unfair business
practices. They can also order firms to forfeit some of the money they
made while those practices occurred --

penalties that can be far higher than fines imposed by regulatory
agencies.

Trial attorneys, consumer groups and many prosecutors see the law as a
bulwark against violations too numerous to be pursued by the state
attorney general or county district attorneys. Industry groups say
attorneys abuse the law by filing frivolous suits to reap quick
settlements, not to protect consumers.

Industry attorneys worry 

The law can put firms in great jeopardy, forcing many to settle rather
than take a risk on a judge's ruling, industry lawyers say.

"The standards are so broad, and not necessarily completely defined,
that there is a tremendous risk of liability,'' said Vanessa Wells, an
attorney with Heller Ehrman White & McAuliffe.

If judges uphold suits like PAL's, California courts could become a
separate arena, independent of the FDA, that could strongly influence
drug industry practices nationwide.

PAL's suits against Pfizer revolve around an issue that has long been
a point of conflict between the drug industry and the FDA itself:
off-label promotion. Once the FDA approves a drug for sale as a safe
and effective remedy for one disease, doctors are free to prescribe it
for other conditions not listed on the FDA label if they conclude a
patient will benefit.

But in general, the FDA forbids firms from actively advertising
off-label uses. The agency wants companies to prove that drugs work in
other diseases by conducting more clinical trials. Off-label drugs
have sometimes been linked to patient injuries and deaths.

The PAL-sponsored lawsuits claim that Pfizer caused a different kind
of harm through off-label promotion: inflating health care costs.

Costly off-label uses 

Repeating the allegations of a whistle-blower, PAL claims Pfizer and
its Parke-Davis unit deliberately bypassed FDA rules and touted their
epilepsy drug Neurontin for an array of other off-label conditions
such as migraine headaches, attention deficit disorder and bipolar
disorder.

The suit alleges that Neurontin grew into a $1.3 billion blockbuster,
with up to 90 percent of that coming from off-label sales, according
to some estimates.

The whistle-blower, former Parke-Davis employee David Franklin, claims
the company boosted such sales by giving doctors thousands of dollars
to promote off-label uses at medical meetings, by paying other doctors
to attend such meetings in luxurious settings and by sponsoring flawed
research studies.

Pfizer spokeswoman Mariann Caprino said many of the allegations
concerning Neurontin cover a period before Pfizer acquired
Parke-Davis. "It's a long-standing and very well-known Pfizer policy
that we have not and do not promote our medicines for uses for which
they have not been FDA-approved,'' Caprino said.

The FDA has warned that some Neurontin marketing materials violated
agency rules. But FDA spokesman Brad Stone said he could not comment
on whether the FDA asked prosecutors to take further enforcement
actions.

Government prosecutors are looking into Franklin's charges and might
seek payback for the millions of dollars that public insurance plans
like Medicaid have spent on Neurontin. But it's the potentially larger
outlays by private patients that PAL is going after in California.

A second PAL-backed suit accuses Pfizer and its subsidiary, Pharmacia,
of promoting the arthritis drug Bextra for an off-label use, a charge
Pfizer denies.

Pfizer seeks dismissal 

Pfizer insists that both suits should be thrown out of court because
they trespass on the FDA's jurisdiction over drug promotion. Some
California judges have agreed that federal law pre-empts such state
court actions, but other judges have not. The FDA generally does not
weigh in on such disputes, and the question remains open, legal
experts say.

Consumer advocates say the FDA is now slower to sanction aggressive
drug promotion. Critics also point to a new rule that forbids FDA
staff from warning companies of alleged marketing violations without
the approval of FDA Chief Counsel Daniel Troy, formerly a prominent
drug industry lawyer.

Nancy Ostrove, an FDA risk communication manager, said the agency's
enforcement program has not been deterred by a lack of resources. She
said the review by Troy's office lends force to the FDA's warnings
because violators know FDA lawyers have already agreed that serious
penalties could follow if the violations persist.

"We're trying to get the industry to understand we're serious about
the actions we undertake,'' Ostrove said.

To seek court penalties under California's Unfair Competition Law,
consumer advocates need not prove that any patient was harmed by a
drug, only that its promotion amounted to an unfair business practice.

Hagens Berman attorney Tom Sobol said aggressive marketing of unproven
drugs hurts everyone.

"There ends up being a widespread harm of increased (drug) utilization
and increased cost that ends up being borne by everybody,'' Sobol
said.

As Hagens Berman handles pre-trial skirmishes in the Pfizer suits, the
firm has already settled one suit against a Florida drug firm for $12
million and has filed another state consumer action against a Georgia
company.

Berman, the firm's managing partner, said he is considering three or
four more suits against drug firms under the California law.



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Unfair Competition Law 
Although it's a tool used by state prosecutors to combat
anti-competitive or corrupt business dealings, it also allows private
citizens or groups to file suit in the name of the public. When these
suits succeed, judges can order a halt to unfair business practices.
They can also order firms to forfeit some of the money they made while
those practices occurred -- penalties that can be far higher than
fines imposed by regulators.

E-mail Bernadette Tansey at [EMAIL PROTECTED] 



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