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Audio Transcript

Mr. Schiff: Hello I’m Neal Schiff and welcome to Inside the FBI, a weekly podcast about news, cases, and operations. Count ‘em up: $2.3 billion settlement with the U.S. Department of Justice by the Pfizer corporation on a fraudulent marketing scheme.

Mr. Bamford: “We have a regional sales manager who pled guilty to off-label promotion; we had a district sales manager who was found guilty of destroying evidence.”

Mr. Schiff: That’s Warren Bamford. He’s the special agent in charge of the Boston FBI field office talking about the largest health care fraud settlement in history. The Boston FBI office began an investigation of Pfizer and its subsidiaries after some employees called the FBI about some alleged illegal activities.

Mr. Bamford: “When something like that happens, it’s so great in these types of investigations because you really need people from within the company to kind of identify something that isn’t right; something that is just going wrong within the company. And that was the case here. They came forward and said really that the company intended to circumvent FDA (Federal Drug Administration) regulations and to market this drug by the name of Bextra and market it incorrectly. We call that ‘off brand promotion.’ And so that kind of the allegation they came forward with and that resulted in an investigation on our part.”

Mr. Schiff: How did investigators investigate this?

Mr. Bamford: “The investigation started out very manpower intensive. Really we had boxes and boxes of information to go through. In 2005, much of the searching was done by hand and then it came down to looking through documents, looking at pieces of paper and then scanning them into computers and then from there doing searches on names and key words.”

Mr. Schiff: Bamford says that agents and analysts worked together in getting to the bottom of everything they had to put the puzzle together to lock in all the evidence for U.S. Attorneys to use to prosecute.

Mr. Bamford: “The analysts are critical in this because there is so much information. In addition to that, too, we had so many other agencies we work with on cases like this because these cases are huge. We have, in this case, Health and Human Services, we have the FDA, the Veteran’s Administration, the U.S. Postal Service, the Department of Criminal Investigative Services, and OPM (Office of Personnel Management). So you have all these agencies—all contributing personnel, investigators, and analysts—to go full strength, to really look at this type of a violation at a company this large.”

Mr. Schiff: We asked Bamford what these workers were specifically doing to violate federal laws.

Mr. Bamford: “The principle violation that we looked at was the off-label promoting of drugs and the paying of kickbacks to physicians for prescribing these drugs. Really what took place was the company had this particular drug (Bextra) and they wanted it to be sold. So they brought in physicians and they brought in people who would be marketing and really, bribe them so to speak, brought them on junkets, brought them on trips, gave them all sorts of perks to really promote these types of drugs.”

Mr. Schiff: And how high up the chain did the investigation go?

Mr. Bamford: “We went up fairly high in the corporation. We have a regional sales manager who pled guilty to off-label promotion; we had a district manager who was found guilty of destroying evidence. And that was done through computer analysis and looking at the computer records that were generated.”

Mr. Schiff: Bamford says health care fraud is taken very seriously by the FBI other federal agencies.

Mr. Bamford: “White-collar crime is one of our top ten priorities, and health care fraud falls within that program. And it really is so critical for us to be on top of this violation because you’re really talking about the public’s trust in medicine and their trust in these major pharmaceutical companies, and if you don’t stay on top of this, you lose that trust.”

Mr. Schiff: And that’s why the Department of Justice, the FBI, and the other agencies worked so hard. At FBI Headquarters, Kevin Perkins is the assistant director of the Criminal Investigative Division.

Mr. Perkins: “Pfizer agreed to pay at $2.3 billion—that’s made up of actually two parts. There’s a $1.95 billion criminal fine and there’s a $1 billion civil remedy also. Both of these are the largest ever collected by the Department of Justice. The criminal fine, the $1.95 billion, is the largest criminal fine in the history of the country.”

Mr. Schiff: What’s the difference between the criminal and the civil?

Mr. Perkins: “This investigation was worked, as many health care fraud investigations are worked, both civilly and criminally. We work from the criminal side to make, to hold people accountable for the criminal law, as we do in many of our investigations. But we also work on the civil side to try to regain some of the funds that have been stolen from the federal government, in this case through Medicare monies and other things along these lines. And the $2.3 billion settlement by the company is the largest that’s ever been done in history.”

Mr. Schiff: What were the allegations?

Mr. Perkins: “The allegation is against Pfizer and two of its subsidiaries, Upjohn and Pharmacia. They were off-labeling certain drugs that they were producing. And what off-labeling involves, when a company such as Pfizer gets approval from the Food and Drug Administration to produce a certain type of drug, it’s been through extremely rigorous safety and testing and other procedures to make sure this product is designed to do what it’s advertised to do and it’s safe for the public to use. What has happened in this case is that the subsidiaries of Pfizer aggressively marketed a product not only for what it was approved for, but for certain off-label things. In other words, they said it was approved to care of one issue, but it was also aggressively marketed to doctors and other health care professionals to deal with other issues. That’s against the law.”

Mr. Schiff: Were these illegal actions going on during negotiations with the Department of Justice?

Mr. Perkins: “Early on they were. This case took almost four years to complete. Many of these types of cases are complex, they involve a great deal of review of records, both of the company and financial records, interviewing many, many people as witnesses, and sometimes these cases take some to pull together. But in this case, some of this was on-going in early phases of the investigation. At this time none of these products are on off-label; they are not being marketed in that way any more.”

Mr. Schiff: How did these activities affect people, like you and me, around the country?

Mr. Perkins: “There’s a danger involved here to the public when such things happen. For instance, when they’re off-labeled marketed and a physician prescribes a certain drug to you for an off-label purpose, what’s happening is insufficient testing has taken place with that product to make sure that it’s safe. You could take it and have some type of harmful reaction to the drug that would have been found had it gone through the proper FDA testing procedures. In this case this didn’t happen.”

Mr. Schiff: How can citizens be the eyes and ears for the FBI and law enforcement in health care fraud?

Mr. Perkins: “That’s a very good question, and we rely a great deal on citizens and others to discover this health care fraud for us and report it. One of the most key factors that citizens can do is to look at their Explanation of Benefits statements, their EOB statements that they get from the government, for those people covered by Medicaid and Medicare. They should look at these statements; look for things that just don’t seem right. You know, you’ve been to the physician; you know what’s taken place. Look and see what they’re billing for. If they’re billing for something, a procedure they didn’t perform on you, you need to let us know.”

Mr. Schiff: Just so you know the impact of this huge investigation. The Department of Justice says that a billion dollars is going to be put back into Medicaid and Medicare and other government insurance programs. You can help, too. If you know about health care fraud of any kind or think you have been defrauded, contact the nearest FBI office. The number is in the front of your phone book and on the Internet at www.fbi.gov. That concludes our show. Thanks for listening. I’m Neal Schiff of the FBI’s Office of Public Affairs.