Healthy Skepticism Library item: 329

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Publication type: news

Pollack A.
Suit Charges Promotion of Drug's Off-Label Use
The New York Times 2004 May 12

Full text:

Before she ran afoul of her bosses, Joan Gallagher says, she was a top saleswoman for a small California biotechnology company. Now she is suing the company, saying it fired her last June for refusing to join an illegal effort to sell the company’s main drug for an unapproved use.

The lawsuit, and corporate documents provided by other former sales representatives, depict how the company, InterMune, generated hundreds of millions of dollars from a drug that was approved for only two extremely rare childhood diseases but has been sold as a $50,000-a-year treatment for a far more common adult lung disease.

The case provides a glimpse into issues arising from the sale of drugs for so-called off-label uses – an industry practice drawing increasing scrutiny from government authorities. Doctors are free to prescribe medications approved by the Food and Drug Administration for whatever use they consider promising – as many cancer specialists have done, for example, by prescribing Celgene’s leprosy drug, Thalomid, to treat multiple myeloma. But pharmaceutical companies are not allowed to actively promote drugs except as treatments that the F.D.A. has specifically approved.

Whether InterMune crossed this blurry line with its drug, Actimmune, is not clear. Malcolm McKay, its vice president for corporate compliance, said the company “does not encourage or condone the promotion of our products for unapproved uses.” He declined to comment on the lawsuit or on documents involving anything mentioned in the suit, although InterMune has filed a motion seeking the suit’s dismissal.

Ms. Gallagher says in the lawsuit, filed in March in Federal District Court in Philadelphia, that InterMune sales representatives were ranked and paid bonuses based on the sales of Actimmune, with the vast majority of sales for the lung disease. The sales representatives, she asserts, repeatedly visited lung doctors to promote Actimmune, but disguised their actions by recording the visits in the computer system and on their expense accounts as involving a different drug.

“It’s the most unethical company I’ve ever worked for,” Ms. Gallagher, who lives in Doylestown, Pa., said in an interview. She said she had worked in the pharmaceutical industry for 25 years for companies including Merck and Amgen.

Six other former members of InterMune’s sales force, in separate interviews, backed many of Ms. Gallagher’s accusations, although they said that some practices had been modified in the last year or so. Some provided corporate documents.

Actimmune has been approved by the F.D.A. to treat chronic granulomatous disease, a rare condition that makes people prone to infections, and severe malignant osteopetrosis, a bone disorder. The company has estimated that if all 800 Americans with those diseases used its drug, sales would be $20 million a year.

Yet sales of Actimmune have grown rapidly and last year reached $141 million. The vast majority of use of the drug has been for idiopathic pulmonary fibrosis, a scarring of the lung that afflicts about 80,000 Americans and is usually fatal. InterMune, of Brisbane, Calif., sells two other drugs, but Actimmune accounted for some 90 percent of revenue last year.

InterMune conducted a clinical trial, completed in 2002, suggesting that the drug could prolong lives if used when pulmonary fibrosis was in its early or middle stages. But the evidence was not strong enough for approval as a treatment for the lung disease. Indeed, in an article in The New England Journal of Medicine in January, the doctors who led the 330-patient trial wrote that the drug had not proved effective and more study would be needed to see if it prolonged life. The company is starting another trial but says it may take four years to get results.

Off-label uses of drugs can help patients by letting their doctors adopt the latest medical findings without having to wait for regulatory approval for a new use of a drug. Some doctors say that since there is no other drug approved for pulmonary fibrosis, even less than complete evidence makes Actimmune worth trying for patients who are facing death.

“Compared to other drugs we’ve used for this disease, it still looks good,” said Dr. Thaddeus Bartter, associate professor at the University of Medicine and Dentistry of New Jersey.

The drawback to the off-label practice, some medical experts say, is that companies can lose the incentive to prove that their drugs actually work for such unapproved uses.

The F.D.A. declined to discuss the issue of off-label marketing on the record. But legal experts say court decisions have established that drug companies have a free-speech right to provide factual information about off-label uses, like scientific journal articles. “If it’s truthful information you are disseminating, it wouldn’t be challenged by the F.D.A.,” said Stephen Paul Mahinka, head of the life science practice at the law firm of Morgan, Lewis & Bockius in Washington.

But Mr. Mahinka said other government agencies, including the Justice Department, were investigating off-label promotions on the theory that they defraud the government by inducing Medicare and Medicaid to spend extra money on drugs.

The matter has put pressure on some big drug companies. Pfizer said it had set aside $427 million to settle a whistle-blower lawsuit and federal and state investigations related to off-label sales of the epilepsy drug Neurontin. Eli Lilly and Schering-Plough have said they are under investigation related in part to their communications with doctors.

InterMune has never been publicly reprimanded by the F.D.A. and has not publicly indicated that it is under investigation.

Doctors interviewed on the matter generally said they were not bothered by the company’s sales tactics. Dr. Philip Marcus, a pulmonologist in Massapequa and Great Neck, N.Y., described them as “a soft sell.”

But two doctors among the handful interviewed said they had believed that Actimmune was approved for pulmonary fibrosis, based on the general sense they got from discussions in medical meetings and journals.

W. Scott Harkonen was the company’s chief executive until he resigned last June over what he now says were strategic differences with the board. He said InterMune had not promoted the drug as a treatment for the lung disease, but simply responded to demand from pulmonologists.

Asked why sales representatives received commissions for such sales, he said it was to provide an incentive “to be responsive to physician demand.”

The former sales representatives disputed that explanation. “We were not responding,” one said. “We were targeting and selling.” This person, and the other former members of the sales force, spoke on the condition their names not be used, because publicly criticizing an employer would jeopardize their careers.

InterMune was founded in 1998 and licensed Actimmune, which had originally been developed by the big biotechnology company Genentech.

The drug had already been approved for one rare disease in 1990 and received its second approval in 2000. In 1999, a study by Austrian doctors not connected with InterMune showed that the drug might work for pulmonary fibrosis, although the test involved only 18 patients.

InterMune decided to conduct a clinical trial to seek approval for treating the disease. It also began a campaign to promote off-label sales based on the Austrian study.

Slides from a 2001 InterMune sales meeting state a strategy to “increase the safe and appropriate use of Actimmune in the treatment of IPF” – or idiopathic pulmonary fibrosis. The strategy was to talk about the science behind the drug to “uniquely brand Actimmune as the treatment of choice for IPF,” and to “create dissatisfaction with other treatment options” by pointing out poor results.

The company sponsored educational meetings for doctors where experts spoke about pulmonary fibrosis and mentioned Actimmune. It financed the formation of a patient advocacy group, the Coalition for Pulmonary Fibrosis, to increase awareness of the disease. It set up a system to help patients get their insurance companies to pay for the drug.

In late 2002, some of the former sales representatives said, InterMune began reining in its sales force.

Dr. Harkonen, the former chief executive, confirmed that the company was “very proactively trying to button down our educational practices” because of new marketing guidelines from the pharmaceutical industry.

Sales commissions became less explicitly tied to Actimmune, and representatives were told that doctors had to sign a form requesting information before they could say anything about using Actimmune for pulmonary fibrosis.

But the former sales representatives said they were still under pressure to sell the drug off label because the company was so heavily dependent on that revenue. “It was like you were in the twilight zone,” one former representative said. “Regulatory would say these things like ‘Don’t sell off label,’ but then you have a $60 million quota.”

Despite the changes, a slide presented at the national sales meeting in January 2003 set an Actimmune sales goal for the year that would mean hundreds of new patients getting the drug – at the rate of one patient per sales agent each week. Such large numbers could not possibly come from the approved uses.

The company also merged the sales force selling Actimmune with one selling a hepatitis drug, Infergen, that accounted for only a few percentage points of its revenue.

Dr. Harkonen said this combination was meant to give more emphasis to the hepatitis drug. But some of the former sales agents said they suspected that the change was made because it looked suspicious to have a dedicated pulmonology sales force with no approved lung drug.

The company’s third drug, Amphotec, an antifungal drug, could conceivably be used by pulmonologists, and it was the one listed as the reason for sales calls to those doctors, according to Ms. Gallagher’s

suit. But Amphotec sales amounted to only a few million dollars a year.

Ms. Gallagher said in her lawsuit that she had been hired in January 2002 to sell the hepatitis drug. When the sales forces were merged and she was asked to start selling Actimmune off label, she refused. Her performance review cited “lack of IPF product interest/support and initiative to embrace the IPF portfolio,” according to the suit.

Since early last year, InterMune has had a nearly total change in upper management, including its top marketing and sales executives. Daniel G. Welch, the new chief executive, has stressed to investors that while the company is still enthusiastic about Actimmune, it would place increasing emphasis on the hepatitis drug, Infergen.

With Infergen sales expected to be only about $20 million this year, though, InterMune is still highly dependent on Actimmune sales – which now seem to be in danger.

On April 29, after the stock market closed, InterMune announced that sales of Actimmune had dropped 13 percent in the first quarter from a year earlier, to $32.9 million. The company also said it was withdrawing its projection of $130 million to $155 million in Actimmune sales this year because it could no longer accurately forecast demand for the drug.

The next day, the stock fell 18 percent, to $14.71. It closed yesterday at $14.77.