Beginning in 1997, Pharmacia, currently a subsidiary of Pfizer, sought to boost its sales of the drug Genotropin. To that end, the company illegally marketed the drug to spur growth in short children and as an anti-aging drug for adults looking for the fountain of youth.
In a nutshell, the off-label marketing scheme included: (1) direct payments to doctors; (2) all-expense paid junkets for doctors; (3) financial incentives to distributors: and (4) phony consultant contracts to funnel payments for the off-label promotion.
As a result of the scheme's success, sales of the Genotropin sky-rocketed and over the years, Medicaid and other public healthcare programs paid millions of dollars for its improper use. The full amount of damage to health care programs is not yet known.
Genotropin is a man made human growth hormone approved to treat a limited range of hormonal deficiencies. The FDA has never approved the drug to spur growth for children without hormonal deficiencies or to prevent aging.
Genotropin has serious side effects according to the National Institute of Health: "If growth hormone is given to children or adults with normal growth, who do not need growth hormone, serious unwanted effects may occur because levels in the body become too high. These effects include the development of diabetes; abnormal growth of bones and internal organs such as the heart, kidneys, and liver, arteriosclerosis; and hypertension."
Dr Rost joined Pharmacia in June of 2001 as a VP of Marketing Endocrine Care. One of his primary responsibilities was to oversee the marketing of Genotropin but he did not handle day-to-day marketing activities.
A group of about 70 people reported to Dr Rost, among them a US marketing director with a group of about 22 people under him. The marketing people who sold Genotropin throughout the US reported to the Endocrine Care sales director.
A few days after Dr Rost came on board he received a copy of a letter from his supervisor that discussed the off-label sale of Genotropin and stated that Pharmacia would not promote or encourage the use of the drug outside approved uses.
Dr Rost said he found the letter unusual because "any marketing director would be well aware that it is illegal to promote drugs for off-label indications." When he asked about it he was told that there had been some problems in the past, but that the issue had since been resolved.
In the fall of 2001, Dr Rost became aware that the company was paying for between 600 and 800 doctors and their spouses to attend an annual meeting at a posh Caribbean resort as part of its marketing of Genotropin. When he expressed concerns, he was assured that the company's legal department had approved this type of trip.
In early 2002, Dr Rost conducted a profitability analysis of the Genotropin franchise and became uneasy when the senior director of marketing would not disclose key sales and marketing information related to the audit.
During the analysis, Dr Rost learned that Pharmacia paid cash incentives to sales reps for each new patient who was prescribed Genotropin and that 16 of the top 20 earning territories came from the adult team, in spite of the fact that adult sales accounted for only about 10% of total sales. He also learned that they received incentives regardless of whether treatment was on-label or off-label.
Dr Rost then decided to track every new patient to determine exactly how many new anti-aging patients were signed on each month. Based on high number in his analysis, Pharmacia agreed to change the incentive payment plan and exclude payments for any patients from physicians known to engage in off-labeling prescribing.
Later in February 2002, Dr Rost learned that Pharmacia had numerous contracts to sell Genotropin directly to doctors specializing in the anti-aging field, as well as contracts with wholesalers who specialized in servicing the off-label Genotropin market.
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