Curbing The Drug Marketers

Empathizing with the drug industry may be tough these days, especially if you just emptied your wallet to pay for your prescription or rode a Greyhound to Canada to buy the same medicine for less. But just for a moment, put yourself in the shoes of pharmaceutical executives who last week attended a conference in Boston on the latest practice to tarnish their trade: the sale and illegal marketing of drugs for "off label" uses not approved by the FDA. "Rarely has a conference been more timely," warned James Dillon, a partner at Foley Hoag, the Boston-based law firm that sponsored the event. Prosecutors and regulators are circling, the executives were told. Would-be whistle-blowers are collecting promotional materials, saving e-mails, taping phone calls--in the hope of sharing in a jackpot settlement. A PowerPoint slide at the conference showed a kitten (representing the drug industry) in front of a row of German shepherds (the federal regulators), unleashed and ready to pounce.

The notion of Big Pharma cowering before the feds is a bit of a stretch, considering its army of lobbyists encamped in Washington--a total of 526, about one for every member of Congress, according to a report issued last week by the watchdog group Public Citizen. Despite the siege mentality at the conference--and fears of a shortage of blockbusters in the pipeline just as several billion-dollar drugs get ready to come off patent--the industry remains one of America's healthiest. U.S. prescription-drug sales grew 11.5% last year, to $216 billion; the top 10 pharmaceutical firms netted a combined income of some $50 billion; and drug companies booked average profit margins of 14%, among the highest of any U.S. industry.

Yet two recent cases involving off-label sales of prescription drugs, Neurontin and Paxil, are rekindling debate about whether drugmakers are generating profits at the expense and health of consumers. Since 2001, pharmaceutical companies have paid the U.S. government more than $2 billion to resolve charges of fraudulent sales and marketing tactics (including a record $875 million that TAP Pharmaceutical Products paid as a settlement in 2001 over kickback schemes to get doctors to prescribe its prostate-cancer drug Lupron). Almost every major firm is now being investigated. Says T. Reed Stephens, a former federal prosecutor who brought several cases against Big Pharma: "We've got a Titanic situation here. What we don't see is the rest of the iceberg."

Prescribing drugs for off-label uses is nothing new, nor is it illegal. Doctors have been doing it for decades to treat rare diseases, pediatric disorders (for which medicines are often not specially approved) and various cancers. By some estimates, more than half of all oncology patients are treated with at least one off-label drug as part of their chemotherapy regimen. And many doctors see the practice as life-saving science. Statins, for example, were initially approved to lower cholesterol but are now heavily prescribed (and blessed by regulators) to prevent heart attacks and stroke. Says Dr. Cary Gross, assistant professor of medicine at Yale: "You can't tell doctors never to try anything except what's been tested." Since 1998, the number of off-label prescriptions has nearly doubled, to around 115 million, according to an analysis by Knight Ridder Newspapers.