Professionalism/Peter Rost and Pfizer

Peter Rost was a former vice president of Pfizer and author of The Whistleblower, describing firsthand witnesses of Pfizer's unethical practices.

Pfizer, #1 pharmaceutical company.

Peter Rost, M.D. Former Vice President Marketing, Pfizer (2004).

Rost: from Pharmacia to Pfizer

Peter Rost is a medical doctor, author of an emergency medicine textbook and former executive within the pharmaceutical industry. He began his career as an executive at pharmaceutical giant Wyeth and then moved to Stockholm-based Pharmacia. In December, 2002, shortly after the announcement that Pharmacia had been bought by Pfizer, Pfizer began hiring Pharmacia employees. Employees were informed that their salaries would be lower at Pfizer and bonuses less frequent. Pfizer retracted a job offer to one of Rost's coworkers, who was "smart and had a perfect career record", after she asked for an explanation about her financial compensation. This was the first instance Rost saw at Pfizer that indicated unethical business practice. Also, many Pharmacia employees were informed by Pfizer that "the company does not provide written or oral references for current or former employees," making it "all but impossible" for anyone to find a new job.

It seems Pfizer had a hierarchical structure instated before they acquired Pharmacia. This structure is not conducive to reporting unethical practices because it would be detrimental to ones career. Roth had a history at Wyeth where he brought up illegal tax-reducing practices reported to auditors Arthur Anderson. When the New York Times broke the story about Roth's involvement in whistleblowing during his time at Wyeth, his reception to executives in Pfizer changed for the worse.

On December 1, 2005, Pfizer terminated Peter Rost's employment. In an open letter to the Justice Department, Rost claimed, as a witness to a federal criminal investigation, his termination violated the False Claims Act whistleblower protection.

Pfizer: Unethical Practices

2001 Pfizer Employee Survey

After being demoted by Pfizer in 2003, Rost decided to launch a personal attack on the company. He compiled data, specifically highlighting areas with which employees did not agree. The graphic to the right displays these percentages.

In addition to profits being more important to Pfizer execs than ethical behavior, Rost documented many unethical practices he witnessed during his time there.

• "At Pfizer, I was expected to increase profits at all costs, even when sales meant endangering lives," tells John Kopchinski, former Pfizer sales representative.
• Holding consultant meetings with physicians at "exotic locations", bribing them up to $1500 to attend.
• Patients have sued Pfizer over Chantix, Lipitor, Celebrex, Bextra, Neurontin, Lyrica, Viagra, Zoloft, and other drugs.

There were also other instances Rost detailed in his book where Pfizer's behavior was unethical

• Sexual liaisons with potential conflict of interest. (p. 67) A similar situation happened at Boeing in 2003 when executives pursued an affair and Boeing's CEO, Harry C. Stonecipher was forced to resign. Rost felt a similar result could happen at Pfizer if his memos detailing the extramarital liaisons went unnoticed by executives.

• While at Pfizer, Rost received a call from a former coworker at Wyeth whose career fell after Rost exposed illegal practices at Wyeth. Rost felt he was indirectly involved in the death of a Wyeth employee following his expose of Wyeth's illegal tax activities.

• Rost's phone was being monitored in 2003. Pfizer's phone operator gave a former colleague of Rost a hard time while trying to contact him. The operator was screening all of Rost's calls. Even personal calls from friends and family uninvolved in the pharmaceutical industry were being monitored.

These measures that were taken against Rost and that he witnessed could be directly attributed to his known whistleblowing practices after the New York Times chronicled his exposure of illegal tax practices at Wyeth. Pfizer became extra vigilant after Rost began to see false advertisement and marketing of Genotropin.

Genotropin

Genotropin was the highly marketable growth hormone drug manufactured at Pharmacia when Pfizer acquired Pharmacia. Genotropin was one of the main reasons Pfizer became interested in acquiring Pharmacia. Little did Rost and other Pharmacia employees know illegal marketing practices and misuse of the drug at Pfizer would cause careers and corporate ties to dissolve.

What is it?

Genotropin is a growth hormone treatment. According to its official marketing site: "It is an exact copy of the natural growth hormone that our bodies make. The main difference is that Genotropin is man-made." Genotropin is approved by the FDA to treat growth failure in:

• Children with idiopathic short stature (ISS)
• Children born small for gestational age (SGA)
• Girls with Turner syndrome (TS)
• Children with growth hormone deficiency (GHD)
• Children with Prader-Willi syndrome (PWS)
• Adults with growth hormone deficiency (GHD)

2002

Pfizer merged with Pharmacia, acquiring Genotropin. According to Rost, Pfizer began marketing the drug for off-label uses, which he tried to stop.

2006

Rost's book The Whistleblower: Confessions of a Healthcare Hitman documents Pharmacia's suspicious marketing of the Genotropin. Darren McAllister, Rost's boss at Pharmacia, wrote a memo to foreign affiliates and the US sales department of Pharmacia highlighting untrue media statements regarding the use of Genotropin as an age-combatant in adults. Rost claims the use of drugs other than their explicit FDA approved uses can cause hundreds of millions of fines for the company. This was a red light for Rost because a memo should not be needed if the policy is clearly known.

2007

In April, 2007, Pfizer settled to pay $35 million fine for bribes and off-label marketing charges over Genotropin. "Pfizer voluntarily fully self-disclosed the off-label promotion of Genotropin by a Pharmacia subsidiary before Pharmacia was acquired by Pfizer," said Allen Waxman, Pfizer's general counsel. "Pfizer's marketing and promotion practices are not involved in the settlement. The company has internal controls to guard against these types of practices."

2008

In February, Rost "cleared a hurdle in his ongoing whistleblower lawsuit against Pfizer." He cited "200 instances in Indiana in which Genotropin was marketed by Pharmacia for unapproved uses, such as combating aging in adults and short stature in children."

2010

In September, 2010, a federal judge dismissed the lawsuit Peter Rost had filed against Pfizer, in which he alleged that Pfizer was marketing Genotropin for off-label use. In November 2010, a federal appeals court overturned the dismissal.

Peter Rost is a former Pfizer executive "who allegated that Genotropin, a human growth hormone, was marketed for unapproved uses, such as combating aging in adults and treating short stature in children." The drug was initially marketed by Pharmacia, where he worked before the company was acquired by Pfizer.

Rost argued, "Pfizer engaged in off-label promotion and provided doctors with kickbacks, which caused pharmacies to submit false claims to state medicaid agenicies."

Bextra

Bextra is a painkiller used to treat arthritis and menstrual pain. Its side effects include cardiovascular problems, gastrointestinal bleeding, heart attack, stroke, stomach ulcers, deadly skin diseases, Stevens-Johnson syndrome, Toxic Epidermal Necrolysis, anaphylactic shock, and liver damage. Pfizer was sued for illegitimate marketing of the drug for off-label use.

2009

In April, Mary Halloway, former Pfizer sales executive, pled guilty to ordering her 100 subordinates to promote Bextra for unofficial uses. She demonstrated an "unusually brazen effort to promote the drug, based extensively on lies," including:

1. Asking that her sales reps not be told that the FDA had not approved Bextra for certain types of post-surgery pain
2. Promoting Bextra for unapproved uses
3. Inventing false safety claims
4. Inventing false clinical claims such as that Bextra was safer than Vioxx
5. Inventing a fictional protocol for Bextra use in OB/GYN surgery pain

During the court hearings, Pfizer attempted to hide its affiliation with Halloway, covering up its unethical practices.

On September 2, Pfizer settled to pay $2.3 billion, the largest fine in U.S. history, for "promoting the arthritis and menstrual pain drug Bextra for uses and in doses not approved by the FDA, putting patients at increased risk for heart attacks and strokes." Despite the magnitude of the fine, drug industry experts believe the verdict "will do little to curb the highly profitable, unethical marketing practices by some companies." Pfizer reported annual profits of $50.0 billion, dwarfing the $2.3 billion settlement 22:1.

2010

In a Department of Justice sentencing for the Bextra case:

"Illegal conduct was pervasive throughout the company and stemmed from messages created at high levels within the national marketing team. Employees, including district managers, explained that they did not question their supervisors about the illegal conduct that they were being instructed to carry out because to do so would be considered a ‘CLM’ or a ‘Career Limiting Move.'"

Whistleblowing

Consequences

Figure 5: Conseqeuences of 233 whistleblowers.

In a study of 233 whistleblowers, most were a "family man in his 40s with a strong conscience and high moral values." The results, shown in Figure 5, include devastating consequences, such as divorce, suicide, and bankruptcy:

This presents a 9-11% gap of people who faced lawsuits, needed physical care, or became alcoholics yet held no regrets.

False Claims Act

The False Claims Act or "Lincoln Law" is a prime example of the Federal Government rewarding whistleblowers through legal measures. In 2009, amendments to the FCA were made to further protect whistleblowers as well as increasing the scope of the law. Programs like the FCA are essential in encouraging people to report malfeasance within organizations to not only prevent accidents, but to also preserve the principles upon which most organizations are founded.

Lessons Learned

Professional reputation

Figure 6: Pfizer's stock over 10 years declining from 45 to 20.

As seen in Figure 6, Pfizer's stock has steadily declined over the past ten years from $45 to $20 per share. This decline in value is arguably a result of Pfizer's unethical practices, which have eroded its reputation and shareholder confidence. As an owner of a company, it is in your best interest to prevent such unethical practices to preserve value. In this way, rational self interest and ethics are not mutually exclusive but codependent.

Consequences of Whistleblowing

One must consider the consequences before whistleblowing. Under no circumstance should it be an impulse decision. There must be a plan of action after the unwanted information is released. One should consider the possibility of termination from employment, demotion, salary cut and/or other punitive measures. In the survey of 233 whistle blowers, life-changing events such as divorce and suicide were common. Interestingly, most individuals said they would blow the whistle again if given the opportunity. Clearly they are driven by a higher, perhaps moral purpose to unveil the truth and prevent harm unto others.