How One Pharma Allegedly Covered Up Illegal Drug Sales -- by Phone!
Eisai (4523.T), a Japanese company that makes the cancer drug Ontak, drew up a marketing plan which consisted mostly of illegal activity, according to a whistleblower lawsuit filed by a former employee. Drug companies are frequently accused of juicing sales by unlawfully promoting drugs for unapproved, "off-label" purposes and then trying to cover up the evidence afterward. Eisai allegedly went a step further than that: The coverup was the marketing plan, the suit suggests.
It illustrates the old management adage: secrecy is not a marketing plan. If your brands depend on black ops then you've already failed.
Former sales rep Michael Keeler claims that when Eisai acquired the drug in 2006 from Ligand, just two days after Ligand had been warned by the FDA not to promote the drug off-label, the very first sales training session Eisai held for its reps used off-label medical studies that reps were to hand out to doctors. Ontak was approved by the FDA for T-cell lymphoma, but Keeler claims Eisai pushed it for numerous other conditions such as ovarian cancer, melanoma, and non-Hodgkin's lymphoma.
In order to avoid discovery by the FDA or federal prosecutors, Keeler claims, reps were instructed to use their private cell phones when calling each other or members of management. Reps were admonished if they actually used Eisai's corporate phone system to make calls. Reps were also banned from claiming expenses relating to any doctor known to be using the drug off-label, and Eisai rigged the drop-down menus in its internal software to prevent reps from entering sales call notes that might discuss off-label uses for Ontak.
In 2008, Eisai's Ontak reps became so annoyed at the pressure to allegedly push off-label that all of the 24-person sales team had complained to management about it. That prompted management to host a mass conference call, Keeler claims. During the call it emerged that up to 70 percent all Ontak's sales were off-label, which was unfortunate because the reps' bonuses were based on those sales, Keeler claims.
In other words, it was impossible to earn a bonus at Eisai if you did not make off-label sales, and impossible -- if you followed Eisai's policies -- to create any evidence that you'd done so, Keeler alleges.
A federal judge in Florida yesterday dismissed four of the case's 34 counts but allowed the remainder to proceed.
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