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Neurontin sales came in at $2.7 billion last year with off-label prescriptions accounting for an estimated 90%. But Pfizer is paying dearly for those sales. Last month its Warner-Lambert division agreed to plead guilty and pay $430 million to resolve civil and criminal charges stemming from the fraudulent sales tactics. Under a federal whistle-blower law, Franklin earned a $26.6 million share of the settlement. Pfizer, meanwhile, says it never saw the kinds of practices that Warner-Lambert engaged in from its own sales force. "Pfizer's approach is proactive," says a company spokesman. "We've got good products and want to promote them in the appropriate ways."
By most accounts, the hard-sell tactics used by Warner-Lambert and other drugmakers have tapered off. Experts say the lawsuits have helped, as has muscle flexing by regulators and a new set of ethics guidelines. In 2000 the American Medical Association launched a campaign to try to curtail freebies and kickback schemes (no more golf outings to Bermuda or Super Bowl tickets, and no more of the infamous "gas and go," in which drug reps would chat up doctors at gas stations while they filled their tanks). The drug industry's trade group, PhRMA, produced similar guidelines in 2002.
At Schering-Plough, under investigation by the Justice Department for off-label marketing, CEO Fred Hassan says compliance has to become "part of the DNA" of a drug company. Since Hassan took office last year, his efforts to crack down on unethical sales pitches have included factoring "business integrity" into the reps' bonuses. The company has also instituted an "integrity hot line" for employees' anonymous tips as well as a chief compliance officer who reports directly to the CEO and the board of directors instead of the legal department, which used to be the standard industry practice.
Yet industry veterans argue that it would be naive to think that drug manufacturers won't continue to promote their medicines for off-label uses. Too much money is at stake. According to industry estimates, it costs around $800 million to bring a drug to market, and once the drug is approved for one use, the race is on to profit from the investment before the patent expires. Moreover, the lines between science and promotion seem to be blurring in the business of continuing medical education (CME), which is required for physician-license renewals. Between 1993 and 2001, medical-school funding for CME dropped 41%, while industry support soared 188%, now accounting for 60% of the total. Says Dr. A. Mark Fendrick, a professor of medicine at the University of Michigan: "Let's face it, industry funding is the lesser of two evils."