Schering-Plough Physician Payments May Be Next Target Of Federal Prosecutors
This article was originally published in The Pink Sheet Daily
Executive Summary
Increasing media coverage, including a CNN interview with the Boston U.S. Attorney and the Neurontin “whistleblower,” has raised the profile of allegations that Schering offered inappropriate payments to physicians to prescribe Intron-A.
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The Boston U.S. Attorney appears to be focusing on Schering-Plough as its next major pharmaceutical prosecution following the Neurontin off-label promotion settlement. Increasing media coverage has raised the profile of allegations that Schering-Plough offered inappropriate payments to physicians for clinical trial recruitment and consulting arrangements. The most recent example is a CNN "Paula Zahn Now" piece that aired Aug. 5. The program interviewed Boston U.S. Attorney Michael Sullivan and Neurontin whistleblower David Franklin. In May, Pfizer settled an investigation by the Boston U.S. Attorney's office into off-label promotion of Neurontin (gabapentin). The $430 mil. settlement resolved charges brought by Franklin related to Warner-Lambert's Neurontin marketing prior to Pfizer's acquisition of the company in 2000 (1 (Also see "Neurontin Settlement Of $430 Mil. Is High For Off-Label Case, Low For Pfizer" - Pink Sheet, 13 May, 2004.)). The program also interviewed Chris Pappas, MD, director of clinical research at St. Luke's Texas Liver Institute in Houston. Pappas claims he was offered over $1,000 per patient by Schering to enroll patients in an Intron-A clinical trial in which participants paid for the drug and accurate data were not collected. A target letter from the Boston U.S. Attorney in 2003 outlined a potential criminal case relating to Schering's promotional activities, including off-label promotion, kickbacks, Medicaid rebate evasion and obstruction of justice. Schering recently reached a $345.5 mil. settlement with Philadelphia federal prosecutors related to the company's managed care contracting practices. The settlement included explicit provisions ensuring it would not interfere with the ongoing Boston case (2 (Also see "Claritin Rebate Settlement Leaves Door Open For Boston Investigation" - Pink Sheet, 30 Jul, 2004.)). One theme of the CNN broadcast may prove troubling for Schering. Franklin described the Neurontin settlement as a slap on the wrist, suggesting that Pfizer executives would be patting themselves on the back for settling for only $430 mil. - Elizabeth Walker |