Whether you think we need more evidence that drug prices have become outrageous or not, the following blog describes the theft of an estimated $75 million in prescription drug from an Eli Lilly warehouse this week (posted yesterday on POSTSCRIPT.) And stay tuned for details on prescription drug reforms that promote access and affordability in the health reform bill released yesterday.
The astonishing theft of $75 million worth of antidepressants and other drugs through the roof of an Eli Lilly distribution warehouse in Connecticut earlier this week is just the latest and most acrobatic incident in a rash of prescription drug theft, and highlights the importance of establishing better tracking of drugs in the pharmaceutical supply chain. According to Freightwatch, a group that tracks cargo security, reported drug theft has quadrupled in the last four years. Last year, nearly $200 million worth of prescription drugs were stolen in the U.S. There were five pharma thefts in the month of February alone.
The case highlights the need for a start-to-finish, tamper-proof drug pedigree on every prescription drug that’s sold. As the Secure Pharma Supply Chain blog wrote, “the issue of pharmaceutical cargo theft energizes the need for material screening of products within the supply chain, from manufacturer to dispenser, to properly protect consumers everywhere.”
Right now, prescription drugs that go missing (through the roof or otherwise) are often exempt from having a pedigree once they reach a hospital or pharmacy because of regulatory gaps. Under current federal and state regulations, many parties are excluded from pedigree requirements – authorized distributors, for one—so a drug’s paper trail ends once it passes through their hands. Stolen drugs, which may be improperly stored or tampered with, can be sold back to authorized distributors, and pharmacies and hospitals that buy from them have no way of knowing of the risks.
Another problem is that it’s a paper trail—papers can be easily swapped forged or lost. And the documents that are required are for whole lots of drugs, making them meaningless in issues of partial-lot theft and resale we’ve seen occur (like the insulin units stolen from North Carolina cargo truck and found on Texas shelves months later.)
One solution would be to require an e-pedigree, an electronic barcode or radio tag on every bottle or package of prescription drugs, making it possible to track each stop along the supply chain from the factory to the medicine cabinet. California is the only state to have an e-pedigree requirement, but implementation of that law has been delayed till 2015. A federal e-pedigree law has been proposed by Representatives Buyer and Matheson, and would be a more sensible solution for a globalized and interstate industry.
Yesterday we blogged here (“Why Drug Lawsuits are Necessary: FDA “isn’t capable of policing” drug safety, says Alaska Judge”) about Zyprexa lawsuits, particularly the state of Alaska’s (seeking to recoup the cost of treating Medicaid patients who took Zyprexa and whom Alaska alleges suffered diabetes and weight gain as a result) and the national class action in federal Court in New York, alleging that Eli Lilly (NYSE:LLY) illegally promoted Zyprexa for unapproved and unproven uses (so-called “off-label marketing.”)
Zyprexa’s success was due in large part to the enormous marketing campaign that Eli Lilly put behind it. Lilly’s pharmaceutical salespeople were the cornerstone of that effort. One former “sales rep,” Shahram Ahari, saw the error of his ways and now devotes his time to exposing the wrongs of pharmaceutical marketing and to supporting efforts to curtail that marketing.
Last night, he appeared on New England Cable News, talking about his experiences as a drug rep and what’s wrong with drug marketing:
Many readers may be familiar with Shahram as something of a YouTube celebrity for this clip as well:
The state of Alaska is suing Eli Lilly (NYSE:LLY) for failing to disclose health risks (like diabetes and weight gain) allegedly associated with Lilly’s hugely profitable “atypical antipsychotic” drug Zyprexa. Last week, attorneys for the state rested their case, at which point the lawyers for Eli Lilly asked the Judge to dismiss the case, saying that the matter was one for the Food and Drug Administration, and not for individual states.
The Judge disagreed, and refused to dismiss the case, offering an opinion from the bench as to the FDA’s ability to police drug safety. Here’s how the Anchorage Daily News described it:
Without lawsuits like the one the State of Alaska brought against Lilly, claims that drugs cause health problems “might well go unaddressed,” Anchorage Superior Court Judge Mark Rindner said from the bench this week.
The jury was out of the room. The state had just rested. Lilly asked the judge to issue an immediate verdict in its favor, a routine step at that point in a trial.
Rindner was reacting to an assertion by Lilly lawyer George Lehner that drug regulation is a matter for the federal Food and Drug Administration, not any state. Alaska’s Unfair Trade Practices and Consumer Protection Act shouldn’t apply to drugs, Lehner told the judge.
Rindner disagreed. Evidence presented by the state over the past two weeks established that the FDA “isn’t capable of policing this matter,” he said.
This isn’t the first time that a Judge addressing allegedly illegal Zyprexa marketing by Eli Lilly has dismissed the notion that the FDA was adequate to ensure that Zyprexa was safe and properly marketed. As we reported back in June 2007, U.S. District Court Judge Jack Weinstein, soundly rejected this notion in refusing to dismiss a class action lawsuit brought by consumers and health plans (including PAL coalition member Sergeants Benevolent Association Health and Welfare Fund. That case alleges that Eli Lilly illegally and improperly promoted Zyprexa for “off-label” uses, that is, uses that the FDA has not approved as safe and effective. In his ruling (available here), Judge Weinstein said:
“Under the present organization of the pharmaceutical industry, the official federal Food and Drug Administration (FDA), and the plaintiffs’ bar, the courts are arguably in the strongest position to effectively enforce appropriate standards protecting the public from fraudulent merchandising of drugs.” (Opinion, pp. 3-4)
And he went on…
“Allowing this and like suits to proceed may or may not increase the cost of pharmaceuticals and the efficacy of medical treatment in this country. It does, however, furnish backstop protection against under-regulated potentially dangerous activity by a market where caveat emptor largely rules.” (Opinion, p. 12)
What happens in the Alaska case will be closely watched, as 9 other states have similar lawsuits against Eli Lilly. A potentially incriminating email in which a Lilly vice president appears to advocate marketing Zyprexa for off-label purchases was revealed in the Alaska trial several weeks ago, the New York Times reported on March 14, 2008 (Lilly E-Mail Discussed Off-Label Drug Use). As Alex Berenson of the Times reported:
In the message, Dr. Lechleiter, who was then the company’s executive vice president for pharmaceutical products, noted to other Lilly officials that company representatives were already promoting Strattera, a second Lilly psychiatric drug, to pediatricians and child psychiatrists. The representatives could also discuss Zyprexa with such doctors, he said.
“The fact we are now talking to child psychs and peds and others about Strattera means that we must seize the opportunity to expand our work with Zyprexa in this same child-adolescent population,” Dr. Lechleiter wrote in the message. He also encouraged Lilly to get data on the use of Zyprexa in treating “disruptive kids” in order to increase the drug’s sales.
The Judge in the Alaska case refused to admit the email into evidence in the trial because that case does not concern off-label use. The email, however, is likely to be an issue in the off-label cases, such as the one before Judge Weinstein. In that case, Judge Weinstein will hear from both sides this week on a motion to certify the case as a national class action. These “class certification” motions are a vitally important stage in a class action case, as they determine whether or not the defendant (here, Eli Lilly) will face the claims of potentially millions of individuals and thousands of health plans.
These two Judges have acknowledged what by now is common knowledge: the FDA lacks both the resources (money, staff) and the political will to hold drug companies accountable and to force them to disclose safety risks associated with hugely profitable drugs. In the face of the FDA’s abdication of its core mission, the Courts are a vital safety net to ensure that drug companies cannot rip off and injure consumers with impunity. In the past few years, vital information about dangerous drugs has come to light only through litigation (for more on this, see “The Role of Litigation in Defining Drug Risks,” Journal of the American Medical Association, 2007; 297: 308-311)
To receive updates about the national Zyprexa class action that PAL members are involved in, as well as about other class actions concerning illegal marketing and pricing tactics by drug companies, fill out the form here. To learn more about the Zyprexa class action, go here.
The FDA Division of Drug Marketing, Advertising, and Communications has issued one of its increasingly rare enforcement letters, calling Eli Lilly (NYSE:LLY) to task for overstating the efficacy of its drug Cymbalta in a “professional mailer” sent to physicians. The letter said:
This mailer is false or misleading in that it overstates the efficacy of Cymbalta and omits some of the most serious and important risk information associated with its use. Therefore, the mailer misbrands the drug in violation of Sections 502(a) and 201(n) of the Federal Food, Drug and Cosmetic Act (Act), 21 U.S.C. 352(a) and 321(n), and FDA implementing regulations.
Sending so-called “untitled” letters, like this one, and the theoretically more serious “warning letters” have traditionally been the FDA’s only power to do anything deceptive drug advertisements and promotional materials. Under the FDA Amendments Act of 2007 recently signed by President Bush, the FDA has gained the power to impose monetary “civil penalties” for violations of the regulations concerned drug ads — up to $250,000 per violation, (“up to” being the operative words here) maxing out at $500,000 for a single company in a three year period. Arguably these fines, if the FDA ever actually musters up the gumption to impose them, are a slap on the wrist.
But will the FDA use them? The FDA’s number of enforcement letters has dwindled to a trickle over the past 8 years. This year, letters have hit an all-time low: While the FDA has issued 14 letters so far in 2007 concerning promotions to physicians, here’s how many they’ve issued to drug companies regarding direct-to-consumer ads:
One!
That was a slap on the wrist for Takeda Pharmaceutical’s ad for the sleep aid Rozerem — and even calling it a slap on the wrist is perhaps overstating it — the ad had a “back to school” theme (i.e. August/September) – and the FDA’s letter was issued in March!
Perhaps the fees that the FDA is now able to collect from drug companies for reviewing drug ads (a power also gained under the recently-enact FDA Amendments Act) will permit the FDA to hire more advertisement reviewers (right now they are woefully understaffed, given the 50,000+ promotional materials filed with the FDA every year). That in and of itself will not mean that the FDA will use its new powers… Only political will can do that, and so far there’s precious little evidence of that at the FDA…
Here’s the FDA’s letter: Here’s the promotional mailer they were concerned about.
P.S. The mailer asked Physicians receiving it to fill it out a survey — in exchange for which they’d receive this handsome simulated leather letter tray! Classy… And oh so “practice related.”
Federal Judge Allows Zyprexa Class Action to Go Forward
Says Courts are “in the Strongest Position” to Protect Public from Fraudulent Drug Marketing
BROOKLYN, NY – A U.S. District Court judge today issued a decision allowing to go forward a class action lawsuit that alleged that Eli Lilly & Co. (NYSE: LLY) fraudulently marketed the atypical antipsychotic drug, Zyprexa, for uses not approved by the FDA. Judge Jack B. Weinstein, of the U.S. District Court, Eastern District of NY, denied Eli Lilly’s motion for summary judgment, as well as a summary judgment motion filed by the plaintiffs.
The 14-page order highlighted the importance of the Courts in protecting the public in the arena of prescription drugs. The Judge stated:
“Under the present organization of the pharmaceutical industry, the official federal Food and Drug Administration (FDA), and the plaintiffs’ bar, the courts are arguably in the strongest position to effectively enforce appropriate standards protecting the public from fraudulent merchandising of drugs.” (Opinion, pp. 3-4)
The lawsuit, brought by the New York-based Sergeants Benevolent Association Health and Welfare Fund and others, alleged that Eli Lilly illegally marketed Zyprexa for “off-label” purposes (i.e. for uses not approved by the FDA), as well as withholding information about Zyprexa’s safety and efficacy. Doctors may prescribe prescription drugs for “off-label” uses but drug companies are prohibited from marketing or promoting drugs for such uses. A 2006 study in the Archives of Internal Medicine found that more than 1 in 7 prescriptions for commonly-used drugs were for off-label uses that lacked scientific support. A study released in January 2007 by the federal Agency for Healthcare Quality and Research found that there was little scientific evidence to support the off-label use of Zyprexa and other atypical antipsychotics.
The plaintiffs in this case alleged that Lilly’s marketing allowed it to charge a higher price than the drug would have been able to command. Lilly sold $4.4 billion worth of Zyprexa in the U.S. in 2006. According to a MarketWatch article, “While U.S. sales of Zyprexa rose 19% in the fourth quarter 2006, Lilly attributed this jump largely to higher prices.” (“Lilly CEO: 2007 Zyprexa sales seen flat,” Val Brickates Kennedy, MarketWatch, Mar 14, 2007)
The Court further said in its opinion:
“Allowing this and like suits to proceed may or may not increase the cost of pharmaceuticals and the efficacy of medical treatment in this country. It does, however, furnish backstop protection against under-regulated potentially dangerous activity by a market where caveat emptor largely rules.” (Opinion, p. 12)
“This ruling underscores the important role that Courts play in protecting patients from illegal drug company tactics,” said Alex Sugerman-Brozan, director of Prescription Access Litigation, a national coalition of which the Sergeants Benevolent Association Health and Welfare Fund is a member. “Unfortunately, the FDA has been trying to slam the courthouse doors in the public’s face by arguing that consumers’ legal claims are ‘preempted’ by the FDA’s authority.”
“We are very excited about this success and are grateful to all those who worked diligently defending the interests of our members,” said Ed Mullins, President of the Sergeants Benevolent Association. “We will continue to pursue any action of wrongdoing that impacts on a NYPD Sergeant or their family.”
The case is part of In re Zyprexa Products Liability Litigation, 04-MD-01596, E.D.N.Y. The Judge’s ruling can be found here.
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About the Sergeants Benevolent Association
The Sergeants Benevolent Association (www.sbanyc.org) is comprised of approximately 10,000 active and retired sergeants of the New York City Police Department. An independent union, it acts as the collective bargaining unit for those officers during contract negotiations with the City of New York, and manages a variety of other projects – including health and welfare programs, political outreach efforts and community service initiatives – for the benefit of its members and their families. The breadth of the association’s activities is wide, but above all else, the SBA is an advocate for New York’s police sergeants, the officers who stand at the Frontline of our nation’s largest metropolitan police department.
About Prescription Access Litigation
Prescription Access Litigation (PAL) (www.prescriptionaccess.org) is a nationwide coalition of over 130 state, local, and national senior, labor and consumer health advocacy groups in 35 states and the District of Columbia fighting to make prescription drugs affordable. The organizations in the PAL coalition have a combined membership of over 13 million people. PAL works to end illegal drug industry practices that increase the price of prescription drugs beyond the reach of the American consumer, using class action litigation and public education. Since 2001, PAL members have filed 28 sets of lawsuits targeting such practices. News about PAL’s cases and public education efforts is published regularly on the PAL Blog at www.prescriptionaccess.org/blog
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