By Bob Van Voris and Janelle Lawrence
March 26 (Bloomberg) -- Pfizer Inc. violated U.S. racketeering law in the marketing of its epilepsy drug Neurontin and should pay $142.1 million in damages, a jury decided.
Kaiser Foundation Health Plan Inc. and Kaiser Foundation Hospitals claimed in a monthlong trial in federal court in Boston that Pfizer illegally promoted Neurontin for unapproved uses. The insurer said it was misled into believing migraines and bipolar disorder were among the conditions that could be treated effectively with Neurontin, approved in 1993 by the U.S. Food and Drug Administration for epilepsy.
“The jury found Pfizer engaged in a racketeering conspiracy over a 10-year period,” Tom Sobol, a lawyer for Kaiser, said after yesterday’s verdict. “That bodes well for future cases.”
U.S. District Judge Patti Saris, who presided over the trial, is overseeing federal lawsuits from throughout the U.S. targeting Pfizer with injury claims and allegations of fraudulent sales and marketing of the drug. In a ruling last year, Saris said that fraud findings against Pfizer in the case decided yesterday could be binding against it in future trials.
Oakland, California-based Kaiser, the first insurer to try a Neurontin case against the world’s biggest drugmaker, claimed it was forced to pay $90 million more than it should have for Neurontin.
The jury, which deliberated for two days, found that New York-based Pfizer violated the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, and California’s Unfair Competition Law. Under RICO, the amount of actual damages found by the jury, $47.36 million, will be tripled.
‘A Triumph’
“This is a triumph for evidence-based medicine over marketing-based medicine,” said Thomas Greene, a Kaiser lawyer.
Pfizer made no offer to settle the case before trial, Greene said.
“We are disappointed in this verdict,” said Chris Loder, a Pfizer spokesman. Pfizer will file post-trial motions challenging the verdict and plans to appeal, he said.
Pfizer fell 22 cents to $17.39 yesterday in New York Stock Exchange composite trading.
During the trial, Pfizer argued that Kaiser doctors continued to prescribe the drug even after the health insurer sued Pfizer in 2005. The insurer’s Web site also still lists Neurontin as a drug for neuropathic pain, Pfizer lawyers said in closing argument.
“We took that into consideration,” said Danielle Hurley, a 22-year-old artist who sat on the jury. “Kaiser was proactive, but could have been more proactive.”
Shocked by Evidence
Hurley said she was shocked by evidence that Pfizer knowingly marketed Neurontin for off-label uses without proof that it was effective.
All of the five jurors interviewed after the verdict said they agreed that Pfizer had demonstrated “a pattern of fraud” in marketing the drug.
“It was clearly a snow job,” said juror Paul Anderson, a technical writer.
“The message, if there was a message, is that they acted in a fraudulent manner,” said Hank Pierotti, foreman of the eight-person jury. “If you’re fraudulent, you deserve to be punished.”
Kaiser claimed Neurontin was wrongly prescribed for off- label uses, including treatment of neuropathic pain, and in dosages larger than the maximum approved by the FDA.
Jurors yesterday found that Pfizer violated racketeering laws with respect to four of the five off-label uses in question.
Company’s Studies
The company’s own studies showed that Neurontin was no more effective than a placebo in treating those conditions, though Pfizer never told doctors or patients about the findings, Kaiser said.
Several jurors said they were strongly influenced by the testimony of former FDA Commissioner David Kessler and Kay Dickerson, a Johns Hopkins epidemiologist whose article casting doubt on clinical studies of Neurontin appeared in the New England Journal of Medicine last year. Both testified on behalf of Kaiser.
“Dr. Dickerson was the lynchpin,” jury foreman Pierotti said.
Pfizer argued that Kaiser didn’t present testimony from any doctors claiming they wouldn’t have prescribed the medication if they had known better, Pfizer’s lawyer argued.
“No doctor wants to admit they were defrauded,” Pierotti said.
Warner-Lambert
Warner-Lambert Co. developed and marketed Neurontin for several years before Pfizer acquired the company in 2000. Four years later, Warner-Lambert pleaded guilty and agreed to pay $430 million to resolve off-label marketing allegations by the U.S. Justice Department.
Saris permitted jurors to hear evidence of the settlement during the trial.
“That helped a lot,” said juror Anderson.
The Justice Department claimed in a 2004 sentencing memorandum that Warner-Lambert’s marketing increased off-label sales from 15 percent of all Neurontin prescriptions in 1994, its first year on the market, to 94 percent, or $2.12 billion, of Pfizer’s Neurontin sales in 2002.
In 2002, responding to press reports of Pfizer’s allegedly fraudulent Neurontin marketing, Kaiser began an information campaign that led to a 34 percent drop in Neurontin prescriptions to its members, according to Saris.
Product Liability Suits
Among the cases in Saris’s court are product-liability suits claiming the drug is linked to an increased risk of suicide. The first trial in one of those, over the suicide death of a 39-year-old woman, ended when her family dropped the case. A second trial, involving the suicide of a 57-year-old Massachusetts man, is scheduled to begin next week in Boston.
In January, Saris dismissed fraud claims by Aetna Inc. and Guardian Life Insurance Co. against Pfizer. Unlike those companies, Kaiser showed it had considered Pfizer’s allegedly false claims and data in deciding to pay for off-label Neurontin prescriptions, Saris ruled before the trial.
The case is In re Neurontin Marketing, Sales Practices and Products Liability Litigation, MDL 1629, U.S. District Court, District of Massachusetts (Boston).
--With assistance from Margaret Cronin Fisk in Southfield, Michigan and Jef Feeley in Wilmington, Delaware. Editors: Peter Blumberg, Mary Romano
To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net; Janelle Lawrence in Boston at rvanvoris@bloomberg.net.
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.
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