Franklin v. Parke-Davis

Last updated
Franklin v. Parke-Davis
District-Massachusetts.gif
Court United States District Court for the District of Massachusetts
Full case nameUnited States of America ex rel. David Franklin v. Parke-Davis, Division of Warner-Lambert Company
DecidedAugust 22, 2003
Docket nos. 1:96-cv-11651
Citation(s)2003 WL 22048255
Case history
Prior action(s)Motion to dismiss granted in part, denied in part, 147 F. Supp. 2d 39 (D. Mass. 2001); protective order modified, 210 F.R.D. 257 (D. Mass. 2002).
Holding
Off-label promotion of pharmaceutical products which causes false claims for payment under the federal Medicaid program is a valid theory of recovery under the False Claims Act.
Court membership
Judge(s) sitting Patti B. Saris
Keywords
False Claims Act

Franklin v. Parke-Davis is a lawsuit filed in 1996 against Parke-Davis, a division of Warner-Lambert Company, and eventually against Pfizer (which bought Warner-Lambert in 2000) under the qui tam provisions of the False Claims Act. [1] The suit was commenced by David Franklin, a microbiologist hired in the spring of 1996 in a sales capacity at Parke-Davis, a pharmaceutical subsidiary of Warner-Lambert (Warner-Lambert was subsequently acquired by Pfizer in 2000). [2] In denying the defendants' motion for summary judgment, the court for the first time recognized off-label promotion of drugs could cause Medicaid to pay for prescriptions that were not reimbursable, triggering False Claims Act liability. The case was also significant in exposing the degree to which publication bias impacts the randomized controlled studies conducted by pharmaceutical companies to test the efficacy of their products. [2] Ultimately, the parties reached a settlement agreement of $430 million to resolve all civil claims and criminal charges stemming from the qui tam complaint. [3] [4] At the time of the settlement in May 2004, it represented one of the largest False Claims Act recoveries against a pharmaceutical company in U.S. history, and was the first off-label promotion settlement under the False Claims Act. [5] [6] : 194 

Contents

Factual background

After four months of employment at Parke-Davis, Franklin became disillusioned by what he believed to be the company's illegal marketing practices in connection with sales of the drug Neurontin.

In December 1993, the Food and Drug Administration (FDA) had approved Neurontin as a secondary course of treatment for epilepsy, to be used only when the first medication had not brought the epileptic seizures entirely under control. [7] Warner-Lambert executives found the potential revenue in that indication was too low, and decided to promote Neurontin for additional indications, for which the drug was not approved by the FDA and for which there was little to no evidence, including migraines, bipolar disorder and attention-deficit disorder. [8] Members of the Parke-Davis sales team, including medical liaisons like Franklin, were hired to conduct this marketing. Franklin also alleged that physicians and other health care providers were paid illegal kickbacks as a quid pro quo for prescribing Neurontin, including expensive meals, stays at luxury resorts, and cash payments [9] and that Parke-Davis hired ad agencies and marketing firms to produce articles about gabapentin describing the drug's emerging uses and recruited physicians and paid them to sign their names to the ghost written articles as authors. [9]

According to Franklin, a case report stating that Neurontin had made a child's attention deficit disorder worse, and his supervisor's dismissal of the report, was a key factor in his decision to leave Parke-Davis in July 1996 after only four months of employment. [8] He also reported being told by a supervisor that his career would be threatened or ended if he continued to raise objections, and this is what finally prompted him to quit and hire a Boston attorney, Thomas M. Greene. [8]

Lawsuit

In August 1996, Franklin and attorney Thomas Greene filed a qui tam complaint in the United States District Court for the District of Massachusetts in Boston under the False Claims Act, a federal statute which permits private citizen-whistleblowers (also known as "relators") to sue on behalf of the federal government for fraud involving federal money. [10]

Franklin's suit proposed a novel theory, that Warner-Lambert had perpetrated a fraud against the federal government by causing doctors and patients to submit claims for reimbursement to Medicaid that Medicaid should not pay for, since by law, Medicaid only pays for treatments that are either approved by the FDA, or are otherwise "medically accepted" (as evidenced, for instance, by being included in an approved list of drugs and their uses). [11] [12] [13] The suit also alleged that Warner-Lambert had broken federal kickback laws.

The suit remained sealed for three years while the Department of Justice decided if it would intervene and take over the case, which it had the right to do under the False Claims Act. In 1999, the government declined, and the case moved forward. [11] The defendants sought to have the complaint dismissed, arguing that the causal link between any representations made by Parke-Davis sales representatives and reimbursements for off-label Neurontin prescriptions was too remote. [14] Furthermore, Warner-Lambert argued that Franklin could only prove the pharmaceutical company's liability by showing that Parke-Davis sales liaisons made fraudulent misrepresentations about the drug, as opposed to merely engaging in truthful off-label promotion. [15]

In an opinion handed down on August 22, 2003, District Judge Patti B. Saris agreed with David Franklin, denying Warner Lambert's summary judgment motion to dismiss the lawsuit. Judge Saris found that, if it could be proven that the off-label marketing of Neurontin caused doctors to prescribe the drug and submit prescriptions to Medicaid, then the company would indeed be liable under the False Claims Act. In addition, Judge Saris found that the submission of false Medicaid claims was a foreseeable result of Warner-Lambert's marketing scheme. [16] The case established for the first time that drug companies could be held liable under the False Claims Act for off-label promotion of pharmaceutical products.

Settlement

On May 13, 2004, the Department of Justice announced that it had reached an agreement with Warner-Lambert and Pfizer. Warner-Lambert agreed to pay $430 million to resolve criminal and civil liability related to the off-label promotion of Neurontin, and also agreed to plead guilty to two felony counts of misbranding drugs under the Federal Food, Drug, and Cosmetic Act, resulting in a $240 million criminal fine. [3] Civil damages under the False Claims Act were paid out to the federal government in the amount of $83.6 million, and damages paid out to the states totaled $106.4 million. Relator David Franklin was awarded one of the highest shares ever under the False Claims Act, 29.5% of the settlement, in recognition of his important role in exposing the illicit marketing scheme. [3] Pfizer agreed to institute a corporate compliance program as part of the settlement. [3] Also as part of the settlement the Consumer & Prescriber Grant Program was established to fund public programs to raise awareness of problems with pharmaceutical advertising. [17]

Impact

Since the settlement in 2004, whistleblowers and the federal government have prosecuted numerous off-label promotion cases under the False Claims Act using this case as a precedent. [18]

Subsequent research reported that the wrongful promotion of the drug was planned by integrating it into Continuing medical education, supporting consultants and members of medical advisory boards to recommend the use to institutions, and paying people to write about the drug in any positive context including in academic literature, letters to the editor, and managing the STEPS trial as a seeding trial. [19]

Litigation around the marketing of ethyl eicosapentaenoic acid (branded as "Vascepa") by Amarin Corporation led to a 2015 court decision that changed the FDA's approach to off-label marketing. [20] [21]

Related Research Articles

<span class="mw-page-title-main">False Claims Act</span>

The False Claims Act (FCA), also called the "Lincoln Law", is an American federal law that imposes liability on persons and companies who defraud governmental programs. It is the federal government's primary litigation tool in combating fraud against the government. The law includes a qui tam provision that allows people who are not affiliated with the government, called "relators" under the law, to file actions on behalf of the government. This is informally called "whistleblowing", especially when the relator is employed by the organization accused in the suit. Persons filing actions under the Act stand to receive a portion of any recovered damages.

<span class="mw-page-title-main">Pfizer</span> American multinational pharmaceutical and biotechnology corporation

Pfizer Inc. is an American multinational pharmaceutical and biotechnology corporation headquartered on 42nd Street in Manhattan, New York City. The company was established in 1849 in New York by two German entrepreneurs, Charles Pfizer (1824–1906) and his cousin Charles F. Erhart (1821–1891).

<span class="mw-page-title-main">Gabapentin</span> Anticonvulsant medication for seizures and pain

Gabapentin, sold under the brand name Neurontin among others, is an anticonvulsant medication primarily used to treat partial seizures and neuropathic pain. It is a first-line medication for the treatment of neuropathic pain caused by diabetic neuropathy, postherpetic neuralgia, and central pain. It is moderately effective: about 30–40% of those given gabapentin for diabetic neuropathy or postherpetic neuralgia have a meaningful benefit.

<span class="mw-page-title-main">Valdecoxib</span> Nonsteroidal anti-inflammatory drug

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Many countries have measures in place to limit advertising by pharmaceutical companies.

<span class="mw-page-title-main">Parke-Davis</span> Pfizer subsidiary

Parke-Davis is a subsidiary of the pharmaceutical company Pfizer. Although Parke, Davis & Co. is no longer an independent corporation, it was once America's oldest and largest drug maker, and played an important role in medical history. In 1970 Parke-Davis was acquired by Warner-Lambert, which in turn was acquired by Pfizer in 2000.

In common law, a writ of qui tam is a writ through which private individuals who assist a prosecution can receive for themselves all or part of the damages or financial penalties recovered by the government as a result of the prosecution. Its name is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning "[he] who sues in this matter for the king as well as for himself."

<span class="mw-page-title-main">Off-label use</span> Use of pharmaceuticals for conditions different from that for which they were approved

Off-label use is the use of pharmaceutical drugs for an unapproved indication or in an unapproved age group, dosage, or route of administration. Both prescription drugs and over-the-counter drugs (OTCs) can be used in off-label ways, although most studies of off-label use focus on prescription drugs.

The ethics involved within pharmaceutical sales is built from the organizational ethics, which is a matter of system compliance, accountability and culture. Organizational ethics are used when developing the marketing and sales strategy to both the public and the healthcare profession of the strategy. Organizational ethics are best demonstrated through acts of fairness, compassion, integrity, honor, and responsibility.

The Drug Industry Documents Archive (DIDA) is a digital archive of pharmaceutical industry documents created and maintained by the University of California, San Francisco, Library and Center for Knowledge Management. DIDA is a part of the larger UCSF Industry Documents Library which includes the Truth Tobacco Industry Documents. The archive contains documents about pharmaceutical industry clinical trials, publication of study results, pricing, marketing, relations with physicians and drug company involvement in continuing medical education.

David Franklin is an American microbiologist and former fellow of Harvard Medical School who while employed by Parke-Davis filed the 1996 whistleblower lawsuit exposing their illegal promotion of Neurontin (gabapentin) for off-label uses. Franklin's suit, filed on behalf of the citizens of the United States under the qui tam provisions of US federal and state law, uncovered illegal pharmaceutical industry practices and created new legal precedent that resulted in a cascade of criminal convictions and civil and criminal penalties against Pfizer and several other pharmaceutical companies totalling more than $7 billion. Civil cases also followed Franklin v. Parke-Davis. Insurance companies, led by Kaiser Permanente, sued Pfizer for fraud and violation of the federal Racketeer Influenced and Corrupt Organizations Act; the Kaiser case settled in April 2014 after Pfizer's appeal at the US Supreme Court was rejected. Franklin v. Pfizer also spawned more than a thousand wrongful death (suicide) suits associated with use of Neurontin. Numerous books have addressed the social, economic and healthcare implications of Dr. Franklin's stance and actions. The settlement was the first off-label promotion settlement under the False Claims Act.

Warner–Lambert was an American pharmaceutical company.

<span class="mw-page-title-main">Stefan P. Kruszewski</span> American clinical and forensic psychiatrist

Stefan Philip Kruszewski is an American clinical and forensic psychiatrist, active as a whistleblower in medically related cases. He is principal in the company which bears his name, Stefan P. Kruszewski, M.D. & Associates, P.C. in Harrisburg, Pennsylvania.

Pharmaceutical fraud involves activities that result in false claims to insurers or programs such as Medicare in the United States or equivalent state programs for financial gain to a pharmaceutical company. There are several different schemes used to defraud the health care system which are particular to the pharmaceutical industry. These include: Good Manufacturing Practice (GMP) Violations, Off Label Marketing, Best Price Fraud, CME Fraud, Medicaid Price Reporting, and Manufactured Compound Drugs. Examples of fraud cases include the GlaxoSmithKline $3 billion settlement, Pfizer $2.3 billion settlement, and Merck $650 million settlement. Damages from fraud can be recovered by use of the False Claims Act, most commonly under the qui tam provisions which rewards an individual for being a "whistleblower", or relator (law).

The STEPS trial was a clinical trial sponsored by Parke-Davis to evaluate the anticonvulsant Neurontin. It is notable for being a seeding trial to promote that drug and for contributing to the drug companies loss in the court case Franklin v. Parke-Davis.

Marketing of off-label use is advertising the use of drugs for purposes not approved by the regional government. The practice is often illegal and has led to most of the largest pharmaceutical settlements after Franklin v. Parke-Davis, in which a court ruled off-label marketing a violation of the False Claims Act.

The Consumer & Prescriber Grant Program was a grant program established with fines paid by Pfizer in the Franklin v. Parke-Davis trial for False Claims Act violations relating to off-label use of gabapentin.

References

  1. ↑ U.S. ex rel. Franklin v. Parke-Davis, Div. of Warner-Lambert Co., No. CIV.A.96–11651PBS, 2003 WL 22048255, at *1 (D. Mass. Aug. 22, 2003) 2003 Decision
  2. 1 2 Melody Petersen, Our Daily Meds: How the Pharmaceutical Companies Transformed Themselves into Slick Marketing Machines and Hooked the Nation on Prescription Drugs, New York: Sarah Crichton Books (2008).
  3. 1 2 3 4 "Press Release: Warner-Lambert to Pay $430 Million to Resolve Criminal & Civil Health Care Liability Relating to Off-Label Promotion". US Department of Justice. May 13, 2004.
  4. ↑ Krautkramer, Christian J. (1 June 2006). "Neurontin and Off-Label Marketing". The Virtual Mentor. 8 (6): 397–402. doi: 10.1001/virtualmentor.2006.8.6.hlaw1-0606 . PMID   23234671.
  5. ↑ Joseph JN, et al. Enforcement Related to Off-Label Marketing and Use of Drugs and Devices: Where Have We Been and Where Are We Going? Archived 2016-03-04 at the Wayback Machine Journal of Health & Life Sciences Law 2(2):73-108. January 2009
  6. ↑ David S. Torborg The Dark Side of the Boom: The Peculiar Dilemma of Modern False Claims Act Litigation 26 J.L. & Health 181 (2013)
  7. ↑ Mack, A (2003). "Examination of the evidence for off-label use of gabapentin" (PDF). J Manag Care Pharm. 9 (6): 559–68. doi:10.18553/jmcp.2003.9.6.559. PMID   14664664. Archived from the original (PDF) on 2010-09-17. Retrieved 2014-08-10.
  8. 1 2 3 Melody Petersen for the New York Times. March 12, 2003 Doctor Explains Why He Blew the Whistle at Pfizer
  9. 1 2 Lenzer J (2003-03-22). "Whistleblower charges drug company with deceptive practices". BMJ. 326 (7390): 620. doi:10.1136/bmj.326.7390.620. PMC   1125531 . PMID   12649230.
  10. ↑ Franklin v. Parke-Davis, 147F. Supp. 2d39 (D. Mass.2001).
  11. 1 2 Hogan & Hartson LLP. June 2003. FDA Update: Government Files "Statement Of Interest" in Neurontin Off-Label Promotion Case
  12. ↑ Greene LLP Franklin v. Parke-Davis: First Off-Label Case Under False Claims Act Page accessed August 8, 2014
  13. ↑ Stephanie M. Greene False Claims Act Liability for Off-Label Promotion of Pharmaceutical Products. Penn State Law Review, Vol. 110, pp. 41-68, 2005
  14. ↑ Franklin at *4
  15. ↑ Franklin at *1
  16. ↑ Franklin at *4-*5
  17. ↑ Rutkow, Lainie; Teret, Stephen (October 2010). "The Potential for State Attorneys General to Promote the Public's Health: Theory, Evidence, and Practice". Robert Wood Johnson Foundation Public Health Law Research Program, via FOLIO.
  18. ↑ Kesselheim, AS; Darby, D; Studdert, DM; Glynn, R; Levin, R; Avorn, J (December 2011). "False Claims Act prosecution did not deter off-label drug use in the case of neurontin". Health Affairs. 30 (12): 2318–27. doi: 10.1377/hlthaff.2011.0370 . PMID   22147859.
  19. ↑ Steinman, Michael A. (2006). "Narrative Review: The Promotion of Gabapentin: An Analysis of Internal Industry Documents". Annals of Internal Medicine. 145 (4): 284–93. doi: 10.7326/0003-4819-145-4-200608150-00008 . ISSN   0003-4819. PMID   16908919.
  20. ↑ Andrew Pollack for the New York Times. 7 August 2015 Court Forbids F.D.A. From Blocking Truthful Promotion of Drug
  21. ↑ Katie Thomas for the New York Times. 8 March 2016 F.D.A. Deal Allows Amarin to Promote Drug for Off-Label Use
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