Pfizer Fires a Vice President Who Criticized Company’s Sales Practices
Fri, 2 Dec 2005
Word of the day:
“The Department of Justice simply does not have enough lawyers and investigators to handle the volume of false claims act suits coming its way. There are right now 150 cases under seal and under investigation, covering more than 500 drugs.” Patrick Burns, director of communications for the Taxpayers Against Fraud Education Fund, a Washington-based non-profit that assists whistleblowers and their attorneys.
For more than a year, Dr. Peter Rost, Vice-President of Marketing at Pfizer has been engaged in a public battle that focused on the pharmaceutical industry’s scare aggressive efforts to block drug reimportation from Canada, where drugs are much cheaper. Dr. Rost refuted industry’s arguments that reimportation is unsafe, calling it a scare tactic designed to protect profits. Yesterday, Dr. Rost, who is in Costa Rico, learned from reporters that Pfizer fired him.
It turns out that Dr. Rost had filed a whistleblower suit against Pfizer in 2003 charging Pfizer-Pharmacia with illegally promoting the growth hormone, Genotropin, for off-label uses, resulting in millions of dollars of overpayments by the U.S. Medicare and Medicaid health programs. But in the current political climate, the government has yielded to the pharmaceutical industry the “legislative privilege” of fleecing the American taxpayer. See House “Budget Cutting” legislation that exempted the manufacturers of psychiatric drugs from cost cutting measures, essentially giving them a license to overcharge the American taxpayer. In this climate, the Justice Department decided not to join in a whistleblower lawsuit against Pfizer’s corrupt marketing practices.
The decision by the government not to act seems to have prompted Pfizer to fire Dr. Rost. However, AHRP has learned that the same assistant US attorney, Sara Bloom, who handled this case, also decided not to intervene in the whistleblower case against Pfizer’s marketing of Neurontin which was filed by Dr. David Franklin. When Dr. Franklin pursued the suit on his own, the government later collected $430 million when the case was settled.
Below are news reports from Bloomberg News, Associated Press, NJ Star-Ledger, and The New York Times. Only Bloomberg News recognized the significant story beyond the contretemps between Rost and Pfizer: “There are right now 150 cases under seal and under investigation, covering more than 500 drugs.”
The Times has always shown special deference when referring medical doctors–even referring to politicians who happen to be medical doctors as Dr. (e.g. Sen. Frist).
So The Times failure to address Peter Rost as Dr. Rost is a signal of hostility. Indeed the Times report is decidedly hostile to this man of conscience.
Blowing the whistle on corrupt practices by pharmaceutical giants does not earn you a fair portrayal at The New York Times.
Contact: Vera Hassner Sharav
Pfizer Fires Marketing VP Rost After U.S. Spurns Suit (Update1)
2005-12-01 19:06 (New York)
By Cary O’Reilly and John Lauerman
Dec. 1 (Bloomberg) — Pfizer Inc. Vice President Peter Rost, a critic of the drugmaker’s stand against pharmaceutical imports, was fired after the U.S. Justice Department declined to participate in his “whistleblower” lawsuit against the company.
Rost, 46, was notified today by letter of his termination, said Paul Fitzhenry, a spokesman for New York-based Pfizer. “We are prepared to offer him a severance package,” Fitzhenry said.
Rost, a marketing executive for the growth hormone Genotropin, said in the lawsuit filed in 2003 and unsealed today that Pfizer illegally promoted the product for off-label uses, resulting in millions of dollars of overpayments by the U.S. Medicare and Medicaid health programs.
“I had tried since October 2002 to get Pfizer or Pharmacia to take action,” on Genotropin, Rost said in a telephone interview today. “When I didn’t think they would take action, I finally took my own action.”
The Justice Department said earlier today it won’t take part in Rost’s suit under the federal False Claims Act. The law allows individuals, known as whistleblowers, to sue for fraud on behalf of the government and recover part of any settlement or verdict.
Rost, who has had a series of public disputes with his employers, joined Pharmacia in 2001, two years before the company was acquired by Pfizer, the world’s largest drugmaker. He criticized the drug industry last year for opposing legislation that would let Americans buy drugs abroad.
Pfizer voluntarily reported Genotropin issues to the Department of Health and Human Services’s Office of the Inspector General a month before Rost filed his suit, the company said in a motion to dismiss the case. Rost knew that the Pfizer had reported itself, Fitzhenry said.
Rost asked for $12.5 million in July 2004, saying that he was in “employment purgatory” because of his status as a whistleblower, the Pfizer motion said.
“Shortly after Pfizer refused to pay,” the motion said, Rost “embarked on a very public campaign of criticizing Pfizer and the pharmaceutical industry on the issue of prescription drug importation.”
Rost said today that he didn’t know Pfizer had reported itself to HHS until after he filed his suit, and that in 2004 Pfizer invited him to estimate what his financial damages would be if he left the company.
“I never asked them for money in return for dismissing the” whistleblower suit, he said by telephone. “They’re trying to get back at me now, there’s no question about that.”
In 2001, Rost sued Wyeth, his employer before Pharmacia, claiming he was forced to quit his job at the drugmaker after he told superiors that managers were helping workers evade taxes in Sweden. Rost settled the case with Wyeth.
The fact the Justice Department won’t join the suit doesn’t mean the end of Rost’s case, said Patrick Burns, director of communications for the Taxpayers Against Fraud Education Fund, a Washington-based non-profit organization that assists whistleblowers and their attorneys.
“The Department of Justice simply does not have enough lawyers and investigators to handle the volume of false claims act suits coming its way,” Burns said in an interview. “There are right now 150 cases under seal and under investigation, covering more than 500 drugs.”
Northrop Grumman Corp., the third- largest U.S. defense contractor, said in March that it will pay $62 million to settle a 16-year-old whistleblower suit claiming it overcharged the U.S. Air Force for a radar-jamming device for the B-2 Stealth bomber.
The Justice Department declined to join that lawsuit, which was filed by two former Northrop employees in 1989.
Shares of Pfizer rose 20 cents to $21.40 as of 4 p.m. in New York Stock Exchange composite trading. They have declined 20 percent this year.
–With reporting by Nicole Ostrow in New York. Editor: Aarons To contact the reporters on this story:
Cary O’Reilly in Washington at (1) (202) 624-1859
John Lauerman in Boston at (1) (617) 210-4630
To contact the editor responsible for this story: Patrick Oster in New York at (1) (212) 893-4088
December 1, 2005
Pfizer fires outspoken exec Peter Rost
By THE ASSOCIATED PRESS
Filed at 8:26 p.m. ET
NEW YORK (AP) — Drug maker Pfizer Inc. fired outspoken executive Peter Rost on Thursday, citing the government’s decision not to participate in a whistleblower suit he brought against the company.
Rost, vice president of marketing, charged in a 2003 complaint that Pharmacia, a Pfizer subsidiary, marketed the human growth hormone Genotropin for unapproved, or “off-label” uses, and improperly sought reimbursement from federal health plans.
On Nov. 10, the U.S. Attorney for Massachusetts declined to intervene in the lawsuit and a federal judge later ordered the complaint unsealed. Pfizer filed a motion Thursday to dismiss Rost’s complaint altogether.
“My understanding is that I’ve been terminated,” Rost said Thursday. “I need to check what this all means with my lawyers,” before making any decisions, he added.
Rost said Pfizer’s motion to dismiss was premature because he hasn’t decided whether to continue with the suit.
Rost’s position has been in a kind of limbo since he came to Pfizer in that company’s 2003 acquisition of Pharmacia. Pfizer says it didn’t have the position Rost requested; he claims he didn’t rule out accepting another position. He has essentially been working for Pfizer without any executive responsibilities.
On Thursday, Pfizer spokesman Paul Fitzhenry said: “Peter Rost’s employment at Pfizer had been maintained over the past two and half years to avoid any complications in light of the government’s review of the claims that he raised.”
Fitzhenry said Rost will be offered a severance package similar to those offered to other employees of Pharmacia after its acquisition by Pfizer.
The government is currently investigating the Genotropin allegations in a separate criminal case. Fitzhenry said the company continues to cooperate with this probe.
In its motion, Pfizer alleges that Rost’s complaint was filed after the company had already disclosed Pharmacia’s marketing practices for Genotropin. The company said Rost failed to identify any false or fraudulent claims made to a federal health care program involving Genotropin as required under the False Claims Act.
Rost countered that he filed his suit before he received notice from Pfizer that it had reported the matter to the government.
Rost is best known for an appearance on the television news program “60 Minutes” in June, when he criticized the industry’s efforts to block drug reimportation into the United States from Canada, where drugs are much cheaper, and called arguments that reimportation is unsafe a scare tactic designed to protect profits.
Associated Press writer Heidi Vogt contributed to this report.
New York Times
December 2, 2005
Pfizer Fires a Vice President Who Criticized the Company’s Sales Practices
By ALEX BERENSON
Pfizer has parted ways with Peter Rost, its not-so-favorite whistle-blower.
The company, the world’s largest drug maker, said yesterday that it had fired Mr. Rost, a vice president for corporate marketing who engaged in a public campaign against Pfizer over drug prices for the last year.
His dismissal came after a federal judge in Boston unsealed a lawsuit Mr. Rost filed in June 2003 against Pfizer, asserting that Pharmacia, a drug maker Pfizer bought in April 2003, illegally promoted the sale of human growth hormone for unauthorized uses.
Mr. Rost contends that Pharmacia offered doctors illegal inducements to use genotropin, its growth hormone, as an anti-aging drug for adults. The Food and Drug Administration has not approved human growth hormone for that purpose, and drug makers are not supposed to promote their products for purposes that have not received approval.
The fact that the suit was unsealed is actually a positive development for Pfizer, because it indicates that the government has chosen not to participate in the suit alongside Mr. Rost. Whistle-blower lawsuits typically remain secret when the government participates.
A spokesman for Pfizer, Paul Fitzhenry, said, “The government’s action today indicates that after two and a half years of careful evaluation, the government sees no merit in intervening in Peter Rost’s action.”
A separate federal investigation into the way Pharmacia marketed genotropin is continuing, Mr. Fitzhenry said.
He declared that Mr. Rost’s lawsuit was without merit because Pfizer had told the F.D.A. about irregularities in the way Pharmacia promoted genotropin several weeks before Mr. Rost separately informed officials.
“Peter Rost filed his whistle-blower lawsuit after Pfizer brought the matter to the government,” Mr. Fitzhenry said. “His actions in this regard were clearly opportunistic.” Under the law, whistle-blowers can receive part of the money the government recovers in a lawsuit that is begun as a result of information they have provided. In some cases, whistle-blowers have been awarded tens of millions of dollars. Mr. Fitzhenry also remarked that Mr. Rost had been the vice president in charge of marketing genotropin at Pfizer, so that he was essentially blowing the whistle on his own conduct.
Mr. Rost said yesterday that he believed he had filed his suit before Pfizer disclosed any information to the government. He brought the suit, he said, because Pfizer and Pharmacia repeatedly rejected his efforts to tell the F.D.A. about the way genotropin was marketed.”I had spent from October 2002 trying to get Pfizer and Pharmacia to take action,” he added, “and finally took my own action.”
A spokeswoman for the United States attorney’s office in Boston said she had no comment on Mr. Rost’s lawsuit and could not confirm or deny the existence of a separate investigation.
Pfizer’s action was the latest chapter in a long and public skirmish with Mr. Rost, who has drawn a salary from Pfizer since it bought Pharmacia in 2003 despite, by his own account, doing essentially no work. Last year, he made about $600,000 in salary, bonus and other compensation.
Since August 2004, Mr. Rost has repeatedly criticized Pfizer for its efforts to block Americans from saving money by importing prescription drugs from other countries. In June, after Mr. Rost appeared on “60 Minutes” to talk about drug pricing, he found that his corporate cellphone and e-mail accounts had been turned off. At the time, Pfizer said it had not deliberately disconnected his service.
Pfizer said yesterday that lawyers for Mr. Rost had asked the company in July 2004 for a severance package of $12.5 million. His public criticism began only after the company rejected the severance package, Mr. Fitzhenry said. Pfizer did not disclose the size of its severance package to Mr. Rost but said it had offered him a package in line with other employees of Pharmacia forced out after the merger.
Mr. Rost said his lawyers had proposed the severance package only in response to Pfizer’s request that they specify something, adding, “I have never asked for any money” to drop the suit.
Pfizer fires industry critic, a whistle-blower
Friday, December 02, 2005
BY GEORGE E. JORDAN AND ED SILVERMAN
Pfizer yesterday said it fired Peter Rost, a vice president of marketing, who for more than a year criticized the drug industry in speeches and press appearances. Rost’s ouster solved one of the drug industry’s great mysteries: Why did Pfizer continue to pay what Rost says was $700,000 annually in wages and retirement benefits while he publicly undermined his employer?
The answer: Rost became a self-styled cause célèbre under the protection of a federal whistle-blower lawsuit he filed in June 2003, just days before Pfizer finalized its merger of Pharmacia.
The whistle-blower suit was unsealed Nov. 10 when the U.S. Attorney’s Office in Boston declined to intervene, clearing the way for Pfizer’s action yesterday.
Pfizer also filed a motion to dismiss. “We informed Peter Rost and his lawyers that the company will be offering him a severance package and that we are terminating his employment,” said Paul Fitzhenry, a spokesman at New York-based Pfizer.
Rost, reached by telephone in Costa Rica, where he is traveling on personal business, characterized his termination in a letter delivered to his lawyer as retribution by Pfizer. “You know what’s been going on in the press, and they are trying to get back at me,” he said. Rost said he has testified twice before a federal grand jury in Boston and “several of my colleagues have also testified.” He said he still must decide whether to press his lawsuit. The lawsuit against Pharmacia and Pfizer, filed under seal since June 3, 2003, claimed Genotropin, a human growth hormone, was illegally promoted for off-label use. Rost oversaw marketing of the drug.
Pfizer has said in its Securities and Exchange Commission filings that the Justice Department is investigating Genotropin. Fitzhenry said Pfizer voluntarily informed the U.S. Justice Department of potential irregularities in the marketing of Genotropin before Rost filed his lawsuit.
Fitzhenry called the lawsuit “opportunistic.”
Also in 2003, Rost settled a separate whistle-blower lawsuit against Wyeth that claimed taxes on bonuses and stock-option gains weren’t paid by Wyeth or executives in its Swedish unit.
Rost ran Wyeth’s operations in Sweden, Denmark and Norway from 1999 to 2001.
He resigned from Wyeth in June 2001 and landed at Pharmacia, which merged with Pfizer in July 2003.
Rost exploded on the media scene in September 2004, when he publicly called for legislation allowing for the import of lower-priced medicines from Canada and elsewhere, a practice the drug industry bitterly opposed. Rost’s public break with his employer made headlines. One Internet-based pharma site began calling him “Pharma’s Black Knight.”
“My lawyer was not a happy guy when I started speaking out,” Rost said. “He was very upset.”
Pfizer opened an internal investigation, but didn’t take action against Rost because of his pending whistle-blower lawsuit, Fitzhenry said.
Rost would eventually testify before Congress and appear on CBS’ “60 Minutes” to voice his view that Americans should be able to buy drugs from Canada. He gave nonstop rounds of speeches and press interviews, and at one point was quoted in major newspapers complaining that Pfizer shut off his mobile telephone and e-mail. Now that his tenure at Pfizer is ended, what is Rost going to do?
“That’s a good question,” he said. “I wish I knew.”
George E. Jordan may be reached at (973) 392-1801.
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