Bad Medicine

- Jim Edwards

In January of 2000, Pharmacia CEO Fred Hassan received a letter from William Abelove, a medical doctor who specialized in "anti-aging" therapies.

At the time, Abelove was writing a book, described in a draft as "a practical, no-nonsense manual for those of us who would like to live to 100 or more." The key to such a miraculous feat was human growth hormone, the draft said: "Growth hormone not only could stop the aging process but it could reverse the aging process as well."

Abelove told Hassan he was seeking a "strategic alliance" with Pharmacia for "the marketing of growth hormone injections" through his business, the Renaissance Longevity Center chain of clinics in Southern Florida. He wrote, "We would like to discuss your role as a supplier to us."

The letter was stamped "Received" by Hassan's office on Jan. 14, and in the margin was scribbled, "Pl. follow up." The handwriting was signed "FH."

On May 1 of that year, Abelove signed a $50,000 contract as a consultant to Pharmacia on the "adult growth hormone market." The company also began selling Genotropin, its growth hormone brand, to Abelove, the doctor confirmed.

In a nation obsessed with youth, this kind of deal was a marketer's dream. There was just one problem: it is a federal crime to distribute Genotropin for the purposes described in Abelove's book. Selling the drug specifically for anti-aging had been banned by a 1990 law, although the statute is so confusing that even seasoned drug marketers are in the dark about what it actually allows and prohibits.

Nonetheless, the Abelove contract was not unique. It was one of about a dozen that the Peapack, N.J.-based company signed with businesses and pharmacies which appeared to be promoting fountain-of-youth therapies.

Those contracts have potentially far-reaching consequences. They could expose Pharmacia's employees and customers to five years in federal prison—the punishment for dealing illegally in growth hormone, according to the statute and the Food and Drug Administration.

The business stakes could be enormous as well. In October 2005, a rival growth hormone marketer, Serono, pled guilty and paid a $704 million fine for the illegal marketing of a similar drug.

And patients also face risks. In studies, more adults who took growth hormone contracted diabetes than those who were given a placebo, according to the Journal of the American Medical Association. There is also a cancer risk. The drug "may be sufficient to cause breast carcinoma to become invasive and metastatic," the Journal stated in its October 2005 issue. Ironically enough for the countless numbers of Americans in quest of a magical return to youth, various tests performed on laboratory rodents show that the drug actually reduces life expectancy.

"It's a serious problem," said S. Jay Olshansky, the professor at the University of Illinois in Chicago who wrote the article that appeared in JAMA. "You should stay away from it for several reasons," Olshansky said. "There's no demonstrated effect on aging. All the associated benefits you can get from exercise, which is free." And, he added, "It's illegal."

Which is why Pfizer—the company that bought Genotropin as part of an acquisition of Pharmacia in 2003—is under investigation by federal authorities for past sales of the drug, according to two former executives who say they have testified to a grand jury on the issue. Pfizer also stated in its most recent financial statement that its Genotropin business was under investigation by the U.S. Department of Justice. There are no allegations of wrongdoing against Hassan, Abelove or Pfizer.

The central issue, then, is this: Was Pharmacia and its marketing department in knowing violation of an established (albeit confusing) law, or were they merely pigeons, bagged by a genuine ignorance of regulations and internal communication failures within the company? In the beginning

Pfizer came to be at the center of this mess in part because, between 2000 and 2003, Pharmacia's marketers were struggling to increase sales in a market that had essentially been tapped out. At the same time, Hassan was negotiating the sale of the company to Pfizer, creating increased pressure to find new revenues.

The tale emerges from interviews conducted with more than a dozen former Pharmacia employees, doctors, vendors and customers. Circumstances of the case are also described in four lawsuits—filed in Massachusetts, New York, New Jersey and Florida—in which Pharmacia's internal memos have also been published.

Two of those suits were filed by Peter Rost, the controversial former vp of marketing for Genotropin, who alleges he was fired by Pfizer because he complained that some sales were against the law. Pfizer, which declined to comment on the specifics of this story, denies Rost's claims.

Following Pfizer's acquisition of Pharmacia —and, hence, of Genotropin—Hassan, 60, went on to become CEO of Schering-Plough, another pharmaceutical company. For the Pfizer deal, and for improving the fortunes of Schering since then, he's been hailed as a "savior" (according to the Financial Times) and a "turnaround artist" (according to BusinessWeek). In the sale of Pharmacia to Pfizer he received $10 million in cash and benefits, according to documents in the federal case.

A representative for Hassan said that Hassan was not able to comment on Pfizer matters as he was bound by a confidentiality agreement. Regarding Hassan's initials on Abelove's original letter, the rep, Stephen Galpin, added that a CEO's office "handles an enormous volume of mail and it's standard operating procedure there for mail to be acknowledged in a timely manner. This is something Mr. Hassan insists on."

Abelove confirmed to Brandweek that the letter and contract were his, and that he has promoted anti-aging uses of growth hormone in the past. He still believes growth hormone has anti-aging effects. "You can say that, yes," he said. "If you take an individual with a low growth hormone level and you start him on growth hormone . . . it will slow down the aging process. I've taken the growth hormone myself and I think it's true. It's a valid statement."

Abelove also says he only prescribes the drug within FDA limits. "I'm not talking about a 40-year-old bodybuilder," he says of his patients. "I'm talking about a 60-year-old, 70-year-old . . . trying to get things back into proper balance."

It's unlikely that all the Americans who take growth hormones are balance-seeking 70-year-olds. The numbers are simply too great. "Some clinics claim [they have] 4,000 patients on growth hormone," said Dr. Thomas Perls, an associate professor of medicine at the Boston University School of Medicine, and a critic of the anti-aging industry. "To me that is not small fish."

The enormous demand for drugs like Genotropin (even baseball great Barry Bonds allegedly used a growth hormone) has created a thriving black market on the Internet for middle-aged people who want to regain the muscles and libido they enjoyed in their 20s—a demand that sets the stage for another key component of the Pharmacia controversy.

If someone wants a drug like Genotropin for anti-aging, but doesn't want to buy it from a dubious seller on the Web, he can try to get his doctor to prescribe it. This is known as "off-label" use (though technically, obtaining the drug online falls into this category, too). About 30% of growth hormone prescriptions from all companies in the U.S. are probably off-label, according to JAMA, which translates to between 25,000 and 100,000 patients.

While physicians have traditionally been given a wide latitude in their prescribing powers to treat patients as they see fit, a pharmaceutical company that distributes growth hormone off-label faces serious trouble. A 1990 law explicitly bans anyone from promoting or selling growth hormone for off-label uses. Under that law, Genotropin was legally approved only for a narrow range of genetic disorders, most commonly for children with stunted bodies that refuse to grow normally. That market is lucrative—treating one child can cost as much as $35,000 a year—but also extremely limited; in the U.S., perhaps 150,000 children need growth hormone treatment at any one time.

In 1996, however, the FDA changed the rules slightly, by approving a new diagnosis under which growth hormone could be administered: "adult growth hormone deficiency." A classic case of AGHD would be a growth-deficient child entering adulthood or a cancer patient whose glands have been crippled by radiation therapy. The new approval still did not cover anti-aging, but an important door had been opened: For the first time growth hormone could be legally given to adults.

By the time Hassan received Abelove's letter in 2000, confusion had grown in the industry as to what, exactly, the FDA now permitted. Marketers and doctors knew the drug was approved for adults—enough of a green light for many in the industry. And so the 1990 law became a distant memory, even though it remains very much in effect.

The FDA takes an unusually strict view of the 1990 statute. "FDA believes that a physician who prescribes, dispenses, and/or administers HGH for an unauthorized use violates federal law," said Crystal Rice, an FDA representative, in an e-mail to Brandweek.

Richard Collier, as the former general counsel at Pharmacia, was the company's chief lawyer. He doubted that the FDA's strict interpretation was correct: "It may be ill-advised or inappropriate to market off-label but it is permissible for a physician to prescribe off-label," he told Brandweek in February.

Still, Collier said Pharmacia staffers were instructed to avoid promoting off-label. "I know specifically that Pharmacia personnel were trained to the illegality of off-label sales . . . We had a compliance department. We conducted sales and other forms of training," he said.

But according to Rost, that training was inadequate. Rost and three of his former underlings all said that few staffers seemed to know that federal law specifically criminalizes both off-label distributing and selling.

Not many of Pharmacia's customers were familiar with the law, either. In a series of interviews, Genotropin customers who had promoted anti-aging uses of the drug gave Brandweek accounts of the law that differed wildly to the FDA's interpretation. Among them:

• Renew Youth Centers in Atlanta ordered nearly $162,000 of Genotropin, according to an internal Pharmacia billing analysis. "It's approved for use for anti-aging back in 1996, '97, '98, somewhere 'round in there," said James Michels, the company's president. "Using it for anti-aging is not off-label anymore."

• NuLife Solutions CEO John Gangemi, who said he currently buys Genotropin from Pfizer, said he was aware of the legal distinction between off-label anti-aging and approved AGHD. But, he said, patients may get the drug for anti-aging purposes "if the doctor so chooses to write the prescription. Nobody is going to tell a physician how to practice medicine." The NuLife Web site, which advertises Genotropin, promises that growth hormone will "significantly reverse many of the effects of aging . . . [and] can reverse the biological effects of aging by as much as 20 years." Isn't that an off-label anti-aging claim? "We're just quoting what has been told to us in research journals," Gangemi said.



Center of the Storm

The central—and unusual—figure in the Genotropin debacle is, of course, Rost. He's a 46-year-old non-practicing doctor with a long resume at medical advertising agencies before he switched to the client side. He also is relentlessly upbeat, despite the fact that the Genotropin controversy cost him his $636,000 a year job. Rost lives in Short Hills, N.J., the heartland of the American pharmaceutical industry. He's currently unemployed but sought-after as a speaker at conferences, where he often denounces the drug industry for having abandoned its ethics in pursuit of profits.

Because Rost headed up marketing for Genotropin, the logical question one might ask is: If Rost's department was engaging in illegal sales, to what extent did he know about it and—more critically—when? Rost's version of the story begins with a specific memorandum. Shortly after his arrival at the company in June 2001, Rost received "a very strange memo handed to me by my superiors," he said.

The memo, dated May 21, 2001, was titled, "Growth hormone in aging patients." It stated, "Recently, much media attention has been placed on the use of GH in elderly patients to reduce the impact of the various consequences of aging." Then, in bold letters, it said, "Pharmacia does not, may not and will not promote or encourage the usage of our products outside the approved labeling." It was written by Pharmacia's former group vp for specialty products, Margriet Gabriel-Regis. She is now an svp under Hassan in the specialty care customer group at Schering-Plough. She did not return three calls for comment. The memo's bolded portion "seems to be very good practice," Collier said.

But the memo went on to say that in 2002 the company would be starting "a series of clinical studies" to "explore clinical endpoints in the elderly." (Legally, pharmaceutical companies are perfectly entitled to conduct research into new, as-yet-unapproved uses for one of their drugs.)

Still, wasn't it confusing to say within a single document that off-label promotion was frowned upon but the company would explore off-label uses in the future?

"Not at all," responded Collier. "How can you read it that way? It seems to me the appropriate thing to say. If there are other indications for which the drug is used off-label isn't it appropriate to study those for FDA [approval]?"

It seems quite clear that Pharmacia's sales staff was already considering off-label uses. According to internal marketing presentations, by 2001 roughly half the U.S. Pharmacia sales force was devoted to finding adults—both on- and off-label—not children, to try the drug.

Pharmacia's internal sales charts show that in the year of the Abelove contract, Genotropin's U.S. sales were $69 million. Of that, $11 million were for unapproved adult sales. The off-label total was forecast to rise to nearly $17 million in 2006, the documents show, on sales of more than $170 million. While those numbers indicate that only about 10-16% of revenues came from off-label, they likely understate the portion of Genotropin patients in that category because off-label patients tend to take smaller, less expensive doses of the drug than legitimate ones.

In fact, one PowerPoint slide, prepared by Rost's people for monthly internal strategy sessions, showed how the Genotropin sales force picked up 160 patients with an approved diagnosis of adult growth-hormone deficiency in January 2001.

But the same chart shows 193 new patients the same month under the heading "OPP." The presentation makes it clear that "OPP" stands for "opportunity," a euphemism within Pharmacia to describe off-label sales, Rost said.

A more blatant slide, also created for the monthly meetings, discussed ways to strengthen Genotropin sales. It said, "Attempt to promote/distribute product through alternative channels (such as the Internet) to focus on alternative indications (such as Healthy Aging)."

The growth of off-label patients did not go unnoticed. In August 2000, a committee of endocrinologists based in Sweden complained to CEO Hassan that the company's policies might be triggering the entry of inappropriate information into its massive international database of people who were on growth hormone. The database is used to track side-effect trends in the patient population.

In careful and diplomatic language, the eight scientists told Hassan in a letter of their "most sincere concerns" regarding the "intention to incorporate patient groups other than those with GHD [growth hormone deficiency] . . . into the existing databases." Having the wrong patients in there would "have major adverse implications," they stated.

The letter does not specifically cite anti-aging patients, but according to two of the letter's authors, the issue was on their minds: "Of course Mr. Hassan knew what we were talking about," wrote one, professor Bengt-Åke Bengtsson of Gothenburg, Sweden, in an e-mail to Brandweek. "I . . . meet a lot of endocrinologists that have expressed a concern over off-label use of growth hormone in the U.S. mainly as an anti-aging drug . . . I knew Fred Hassan since we have met a number of times. After our letter these suggestions [of inappropriate data entry] never occurred again. Mr. Hassan is very familiar with these databases and has also visited our meetings."

Another of the authors, Prof. John Monson of London, had a different recollection. He said he found "something like 30" anti-aging patients in the database when they should not have been. But, said Monson, the letter was not primarily about anti-aging. It was a more general plea to stick to the rules of the database. "We were concerned that pseudoscience might creep in. We did not have any specific proof," said Monson. "At no stage did I believe that Pharmacia was in any sense encouraging off-label use."

Rost said he does not know whether Hassan had knowledge of the illicit sales, but that Hassan was familiar with the drug's marketing. "When Fred Hassan joined Pharmacia in 1997 Genotropin was the company's No. 1 product," said Rost. "He personally met with many Genotropin opinion leaders and approved large projects, from a new hospital wing, to research for which they requested funding."

Rost believes that Hassan should have taken the protest letter as a red flag. But Pharmacia continued to supply Genotropin to businesses that had an anti-aging bent.

Trouble Ahead

By the winter of 2001, Rost said he began to get nervous about Genotropin's sales. First he ordered his staff to determine just how profitable the segment was. When the numbers were crunched, it turned out that the new adult market was actually losing the company money. The reason: unlike children, adults need such small doses that delivering the drug actually cost the company more than it made on the sale of each dose. Exacerbating the problem was the fact that, according to Rost, sales reps received bonuses for recruiting adult patients—the least-profitable sources of business. A chart created by Rost for internal use in 2002 showed profit margins on Genotropin broken down by dose type. For the adult doses, the graph dipped below zero dollars.

In early 2002, it began to dawn on Rost that Pharmacia may have a significant legal problem on its hands.

So Rost moved against one of his lieutenants, former senior director of U.S. marketing Carl Worrell. It was Worrell who had signed the Abelove consulting contract, prior to Rost's arrival. He was terminated in April 2002, according to Rost's federal lawsuit.

Worrell, who says he was never told why he was asked to leave, denies he promoted Genotropin off-label. "Off-label promotion in the industry was one of those things you don't do. That's a bright line, folks. People lose their jobs and are not working in this industry for that," he said. Worrell says the Abelove contract was simply to have the doctor, who has studied the drug for years, educate Pharmacia about the legitimate adult market, nothing more. Such consultancies are routine in the drug business.

Worrell later sued Pharmacia claiming he was wrongfully dismissed. The case was settled. Worrell declined to talk about it.

After Worrell's departure, Rost says he continued to discover evidence of off-label activity: The front of the application form that doctors filled out when prescribing Genotropin suggested uses that did not include the wording approved by the FDA, and next to those, "Please see reverse side for approved indications." Boston University's Perls said at least two of those check boxes appear to suggest off-label uses.

And Pharmacia was paying for hundreds of doctors to attend an endocrinology conference in Puerto Rico—at a value of about $1,800 each—at which they heard about new growth hormone research, according to Rost and a copy of the conference agenda, which lists "obesity" and "Crohn's Disease" among its topics. Pharmacia even contracted with a travel agency in Moonachie, N.J., to handle the doctors' flights, according to a copy of the contract.

At the same time, Pharmacia started an internal "review" of the brand, according to a memo. The review identified a dozen or so contracts that bore signs of anti-aging sales, according to copies of the review analysis and Rost's federal lawsuit.

Some of the contracts were terminated over the protests of the customers, the documents show.



Blowing the Whistle

In July 2002, Hassan announced that Pharmacia had entered talks to be acquired by Pfizer to create a behemoth worth $50 billion in annual sales. Rost wanted Pfizer to keep him on after the merger. He received a performance evaluation from Pharmacia that described him as "tremendous" and said, "Peter is a key leader with potential for an even larger senior Marketing role or a high-level role within Operations."

But Rost also wanted Pfizer to report the off-label situation to federal authorities because, in his opinion, the company could only end its potential legal problems if it did so.

In October 2002, the management of Genotropin, including Rost, sat down with their counterparts at Pfizer to brief them on the business. Rost told them about the off-label situation. They asked lots of questions, Rost said, but they did not tell him what they were going to do about it.

Then, on Jan. 17, 2003, an old skeleton emerged to haunt him. The New York Times reported that Rost had settled a whistleblower suit against a previous employer, the drug company Wyeth, where he had been demoted after alleging that executives there were cheating on the company's taxes. The same day, Rost received an e-mail from his new manager at Pfizer. It said, "There will not be a fit with the marketing organization" for him.

Figuring he had nothing to lose, Rost wrote to Pharmacia lawyer Collier on Feb. 4, complaining that, "Your colleagues at Pfizer do not appear to realize how serious the situation is."

The merger was completed in April 2003, but the relationship between Rost and Pfizer was permanently soured.

The company wrote a letter in late May telling Rost that they took his allegations "very seriously" and that it was "in the process of disclosing to the relevant governmental authorities" certain "changes" to the Genotropin business. In fact, Pfizer had already reported the off-label sales to the government, but the company didn't tell that to Rost.

On June 5, 2003, with Pfizer still having not officially fired him, Rost sued his new employer in Massachusetts U.S. District Court, claiming that Pfizer, as Pharmacia's new owner, was liable for its illegal sales.

Given his previous suit against Wyeth, some people view Rost as a career malcontent who sues the industry rather than trying to succeed within it. The American Council of Science and Health—a pro-industry group—called him the "biggest Whiny Whistleblower for 2005." Of course, he denies that. "I'm over 40. I have small kids. I just moved to a new company. Do you think my first inclination would be, 'Let's start hell over here?'" he said. "I didn't want to put myself in this crummy situation."

Thus Rost entered what he describes as the "Twilight Zone" of his career. One by one, all 60 of his former staffers were reassigned to other executives. By the end of summer 2003, he said, he was in charge of no one except his administrative assistant. Pfizer relocated Pharmacia's operations to its 42nd Street headquarters in New York. By summer 2004, Rost's assistant was also reassigned. His own office was moved next to the security station. He found himself virtually alone in the Peapack building, which once bustled with hundreds of employees. Rost stayed in this "purgatory" for two years, until December 2005, he said.



Corporate Comes Clean

A month after the April 2003 merger closed, and two weeks before Rost filed his suit, Pfizer wrote to the FDA and the Office of the Inspector General—unbeknownst to Rost. Pfizer disclosed that there was something clearly wrong with its Genotropin sales, according to its defense papers in the federal suit.

Pfizer said it was unable to act earlier because it was hobbled by merger laws. "Due to the restrictions associated with the exchange of competitive information prior to final regulatory approval of the transaction, Pfizer's access to complete information was restricted, as was its ability to effect any change," Pfizer told the inspector general.

Pfizer took the same position, broadly, as Rost: That there had indeed been off-label "anti-aging" Genotropin sales. "[F]or the past several years, Pharmacia distributed Genotropin directly to doctors, specialty pharmacies, and clinics, some of which sold, promoted, and/or prescribed Genotropin for 'lifestyle' or anti-aging purposes," Pfizer told the FDA. "We have very recently learned that Genotropin is still being distributed directly to many of these same purchasers, although [sales] calls to anti-aging physicians largely stopped by mid-2002."

Pfizer wrote that it had replaced Genotropin's management and disciplined its sales reps. The company asked for time to investigate the Genotropin sales, promising to report back.

The probe, sources said, was thorough. "All we knew was many people were asking us questions and we'd better jump with whatever it was they wanted. And we did," said one former Pharmacia manager who requested anonymity. The manager described Pfizer's attitude to the Pharmacia folks as "hostile."

Pfizer's legal liabilities are unclear. The best-case scenario for Pfizer is that the Justice Department will decline to prosecute. The worst case? Everyone ends up in court.

According to merger experts, management has no general duty to report illegal acts at another company until after a deal is closed. But those same experts warn that acquiring a company engaged in potentially illegal acts carries huge risks.

"Yes, there were legal questions, but there was not obvious legal liability. . . . They took the business decision to accept the risk. And now there may be consequences," said professor Jim Angel, who teaches at Georgetown University's business school.

In November 2005, the U.S. Attorney's Office in Boston told Rost's judge that it was not interested in joining his civil suit. The U.S. Attorney's Office declined to comment. Pfizer filed a motion to dismiss the suit completely, castigating Rost's suit as "parasitical." It claimed Rost's complaints about Pfizer were fueled by the company's refusal to pay him a $12.5 million severance fee. The motion is not yet decided.

In December, Pfizer fired Rost, who heard of the decision when a reporter from Bloomberg News e-mailed him asking for comment.

Rost used his newfound freedom to reveal that he had twice testified as a witness for a federal grand jury in Boston. Worrell, whom Rost wanted out of the company, also told Brandweek that he too had been questioned by the grand jury.

In September 2005, Pfizer lawyers ordered certain employees via email to save any documents relating to Genotropin sales and "anti-aging physicians or clinics," in case they were needed for an investigation, according to the memo. On March 1, 2006, Pfizer said in its 2005 annual report that the Justice Department had requested "information and documents" regarding Genotropin, managed care payments, and "certain physician payments."



Unhappily Ever After

When CEO Hassan first received the letter from Abelove in 2000 asking for a deal on Genotropin, Hassan likely did not guess it would end up being the subject of controversy six years later.

For some, the episode is unlikely to end happily.

Rost believes he has almost no chance of ever working again in the drug business. "People think because you file a [whistleblower case] you're going to get rich," Rost said. "The truth is [you're exposed] to ridicule and you lose your job."

Abelove continues to practice medicine in South Florida. Pharmacia sued Abelove in a Florida court in 2001 after he failed to pay for "goods and merchandise," according to the suit. Abelove eventually settled the case for $95,520 in 2002. He still swears by Genotropin. "As a matter of fact, I still use their product. I think their product is an excellent one," he said.

Pfizer must continue to report on the progress of its self-investigation to the FDA and the inspector general. Both those agencies declined to comment on Pfizer's progress.

Meanwhile, Pharmacia's apparently lax oversight has left former Pharmacia employees bitter.

"If I did anything illegal, which I don't believe I did, but if I did it's because I didn't know what I was doing was illegal," said the former manager who cooperated with the Pfizer probe.

"And if I was, damn it, somebody should have told me," she said.

For the Record: The story "Bad Medicine," Brandweek, March 20, 2006, contained an error in its original version in a description of handwriting in the margin of a letter delivered to former Pharmacia CEO Fred Hassan in January of 2000. The original version stated that the writing appears to say, "Pl. follow up/act etc." However, a review of several samples of Hassan's handwriting indicates that the writing says, "Pl. follow-up/ack etc.," with "ack" being shorthand for "acknowledge." (The original story did state that Mr. Hassan insists that mail to his office "be acknowledged in a timely manner.") This version shortens the quote to "Pl. follow up" in order to avoid confusion.

What Do the Feds Want?

The U.S. Department of Justice's investigation of

Pharmacia and Pfizer may not be restricted to off-label Genotropin sales.

Both former marketing vp Peter Rost and former senior director of U.S. marketing Carl Worrell confirmed to Brandweek that the U.S. Attorney's Office in Boston have asked them about Pharmacia's relationship with a company called Express Scripts.

Based in St. Louis, Mo., Express Scripts is a pharmacy benefit manager—a company that manages prescriptions for patients and retail pharmacies. Its major customers are employee benefit plans and managed care companies. It has $16.3 billion in annual revenues.

Pharmacia used Express to manage its "Bridge Program" for Genotropin, Rost said. Under the program, patients would receive the drug before payment had been received from an insurer or Medicare. This was crucial for Pharmacia because Genotropin is enormously expensive; even the small doses can run to $500 a month. Bridge also employed nurses to usher patients through the early, anxious stages of Genotropin therapy. Pharmacia paid Express more than $12 million to administer the Bridge Program, Rost said.

Rost contends he was not allowed to move the Bridge contract to a competing company that offered to handle it for $2 million less than Express. The reason—Rost says he was told—is that the expensive Bridge contract was balanced out by an advantageous relationship Pharmacia had with Express regarding its much bigger drug, the painkiller Celebrex. "There was some setup in accounting so the Celebrex team reimbursed us $2 million," Rost said.

It is not known exactly why the grand jury decided to ask about this. The U.S. Attorney's Office declined to comment, as did Pfizer (Pharmacia and Genotropin's new owner) and Express Scripts.

But in their financial statements both companies disclose that they are under investigation for issues in this area. In its 2005 financial report, filed March 1, 2006, Pfizer wrote: "We received requests for information and documents from the Department of Justice in 2003 concerning the marketing of Genotropin as well as certain managed care payments, and in 2005 concerning certain physician payments . . . In 2005, the Department of Justice informed us that it is investigating Pharmacia's former contractual relationship with a health care intermediary."

In September 2005, Pfizer's general counsel office sent an e-mail to some its employees that said, "Pfizer has received notice of a government investigation of certain allegations of unlawful conduct in connection with Genotropin." The memo told employees not to destroy any documents relating to "Communications with Express Scripts during the period of January 1, 2002 through December 31, 2003 concerning: (a) distribution or shipment of Genotropin; (b) anti-aging physicians or clinics; (c) off-label uses of Genotropin."

The memo continued, "All documents regarding the consignment provision in the Bridge Program Contract, including any communications with Express Scripts about the consignment provision of the Bridge Program Contract" were also to be preserved.

All of Express' current statements warn that the company is the subject of "investigations of certain PBM practices and pharmaceutical pricing, marketing and distribution practices currently being conducted by the U.S. Attorney offices in Philadelphia and Boston, and by other regulatory agencies including the Department of Labor, and various state attorneys general."

Neither company nor any person has been accused of any wrongdoing. —J.E.

What is HGH?

Human growth hormone has always been controversial. First developed in the 1970s, the drug was obtained by digging into the neck of human corpses and removing the fingernail-sized pituitary gland, which produces the substance.

The difficulty of obtaining the drug and the desperation of parents who wanted to treat children who failed to grow combined to form a lucrative market for any company that had access to the newly dead. It took about 50 cadavers to treat one child for a year. In some countries, like France and Ireland, a vampiric industry developed to collect pituitary glands from autopsy offices. Much of the early growth hormone came from obscure origins, such as the former Soviet Union. Not surprisingly, the business was perpetually dogged by ethical and legal debates.

In the 1980s, some children who had received cadaver-derived growth hormone contracted Creutzfeld-Jakob Disease, a rare condition sometimes associated with cannibalism, and one which gives its victims dementia before killing them. The drug was withdrawn from the market.

But then a Swedish drug company, Kabi Vitrum, genetically engineered a synthetic version of the drug, Genotropin. Kabi merged with Pharmacia in 1990, taking the Pharmacia name in the process, and Pharmacia was in turn bought by Pfizer in 2003.

By 1990, growth hormone had become trendy with body-builders, who noticed that the drug's side effects redistributed stomach fat and increased lean muscle in its users. So Congress passed a law (21 U.S.C. 333, Sect. 303) that specifically made it a crime to "distribute" growth hormone "for any use" other than those "authorized" by the federal government.

In the late 1990s, Pharmacia found itself in a five-way fight for the growth hormone market, against Genentech, Eli Lilly, Novo Nordisk and Serono.

The competition was made especially difficult because, as one doctor told a market research company retained by Pfizer, "All of these drugs are identical." The doctor's quote was contained in a presentation to Pfizer dated February 18, 2003.

The only difference between them is the marketing, the expertise of the companies in specific disease areas, and the level of feedback and logistical support the companies give to doctors.

To compound the problem, doctors know the drugs are all the same. So they rotate their patients through the brands, effectively quadrupling the amount of support they receive.

As Pharmacia's 2003 internal marketing presentations describe it, the pressure on the company was intense. The market consists of "5 extremely aggressive competitors with high levels of investment," and Pharmacia's only choice was to "continuously and relentlessly defend and build market share," the PowerPoint slides say. —J.E.

Who is Peter Rost?

One of the more bizarre twists in the Genotropin story is how Peter Rost first became famous: It had nothing to do with growth hormone.

The former vp-marketing at Pharmacia and Pfizer is better-known for a book review he wrote on Amazon.

The book was The Truth About Drug Companies by

Marcia Angell, a former editor of the New England Journal of Medicine. Angell's book was scathing. It claimed companies rigged clinical trials and deliberately kept drug prices high.

Here is a segment of Rost's review: "Drug companies are their own worst enemies. They have antagonized grannies all over the U.S. with their work to stop reimportation of cheaper drugs into the U.S., a practice that has been in place for many years in Europe."

The review was noticed by USA Today, which wrote an article mentioning his criticisms. Soon, Rost found himself testifying to Congress and writing an op-ed piece for the Los Angeles Times on the evils of Big Pharma's protectionist policies. CBS' 60 Minutes did a segment on him. What made Rost an instant media darling was the fact that his position was the exact opposite of Pfizer's.

From 2004 until December 2005, the looming, unanswered question about Rost was: Why doesn't Pfizer just fire that guy? Only when Rost was terminated did it emerge that Rost had brought his Genotropin suit and, as Pfizer put it in its legal documents, "Pfizer kept [Rost] as an employee after the merger because of the pendency of the government investigation."

Given all the controversy he had stirred internally with his allegations about off-label Genotropin sales, why did he feel the need to open up a second front against Pfizer?

"Because I didn't give a shit," Rost said, referring to the period in which Pfizer had isolated him within the company. "I did it because I thought it was the right thing to do." He didn't think anyone would read the Amazon review—there are millions of them. "Two days later USA Today called. I took that as kind of a sign saying, 'Maybe this is what I'm supposed to do,'" Rost said. "My lawyer was not a happy guy."

Pfizer was even less happy. In its defense papers the company complained that Rost "embarked on a very public campaign of criticizing Pfizer," which included describing Pfizer's policies as being "as bad as terrorism." Pfizer wrote that Rost never mentioned he had a hidden "axe to grind" against his employer, against whom he sought a $12.5 million severance. Rost denies he demanded the sum. —J.E.