Do government probes deter bad pharma behavior? Researchers delved into the Neurontin off-label marketing settlement to find out. Their conclusion: Off-label prescribing continued apace after federal prosecutors started investigating, kept growing after the investigation was made public, and only began to decline after Pfizer's Warner-Lambert unit agreed to pay $430 million to settle the claims.
The Neurontin settlement was announced in 2004. Since then, a host of drugmakers have entered similar--and more costly--settlements with whistle-blowers and the feds. Pfizer ($PFE) itself agreed to pay $2.3 billion to wrap up marketing allegations related to Bextra and several other drugs, with federal prosecutors citing the repeat violation as one reason for the record-setting settlement.
As the pile of fines and payments mounted--and came to include more repeat offenders--questions about their deterrent effect naturally arose. How could Lilly's $1.42 billion Zyprexa settlement warn drugmakers way from marketing offenses when the atypical antipsychotic brought in that much in one quarter? How big would a settlement have to be to counteract off-label promotions, particularly when off-label sales of some drugs far outweighed the sales for approved uses? Had the settlements become just another cost of doing business in pharma?
Knowing the Justice Department is on the case, some pharma execs have said they think twice about promotional practices. In response to the new Health Affairs study, Pfizer yesterday pointed to its own stepped-up compliance efforts. And study author Aaron Kesselheim allowed that the settlements have captured attention within the industry. "Certainly the pharmaceutical companies are saying they're changing their practices," Kesselheim told The Star-Ledger, adding, "The practices are more likely changing rather than disappearing completely."
To really change behavior, off-label probes should come with increased penalties, the study authors suggested. "Settlements to this point have been dwarfed by the financial gains to pharmaceutical companies from engaging in improper off-label marketing,'' the study noted.