Zyprexa suit highlights CVS links to Lilly

The subsidiary of CVS, the largest US drugstore chain, touted Zyprexa starting in 2003, according to e-mails made public by lawyers suing Lilly for overpayment. CVS's AdvancePCS, a pharmacy benefit manager, or PBM, offered to send 120,000 letters to doctors promoting the drug, Lilly's top-seller with $4.7 billion in sales last year, according to a confidential 2004 proposal. The CVS unit said it would charge $5 per letter.

CVS's contracts with insurers and pensions meanwhile place it in an adversarial posture with Lilly, requiring it to use its buying power as leverage in drug-price negotiations.

"The problem is that PBMs are negotiating these hidden deals while at the same time telling employers that they represent them at the negotiating table," said Gerry Purcell, a former PBM executive who advises companies on their drug plans. "These documents will add fuel to the perception that the companies and the PBMs are in cahoots with each other."

AdvancePCS, acquired by Woonsocket, R.I.-based CVS in 2007, said in the documents that the direct-mail campaign was "designed to influence key prescribers" as part of a "tactical plan for Zyprexa."

The insurers suing Lilly, the biggest maker of psychiatric drugs, contend the drug maker should pay as much as $6.8 billion in damages for downplaying Zyprexa's health risks and marketing it for unapproved uses to increase profits. About 10,000 pages of internal Lilly documents were unsealed as part of the suits.

"This is the kind of stuff the drug companies and the PBMs hate to see get out," said Purcell.

Lilly declined to comment on whether it accepted CVS's $5-per-letter offer. CVS rival Express Scripts Inc. also sent out Zyprexa marketing letters, according to the unsealed documents and also isn't named as a defendant in the suits.

"To engage in a point/counterpoint in a media outlet rather than in court would not be productive," said Lilly spokeswoman Marni Lemons.

Lemons declined to answer specific queries about the CVS or Express Scripts letters, whether Lilly paid for the practice, or other questions raised by the unsealed documents, including the "ghostwriting" of medical articles by the drug maker and the marketing of Zyprexa to the elderly.

CVS said in its e-mailed statement that it has "no active educational programs" related to Zyprexa.

"CVS Caremark discloses to its PBM clients that it may have financial relationships with pharmaceutical manufacturers in connection with these educational programs," said Christine Cramer, a spokeswoman for the chain. "CVS Caremark's PBM clients are aware of these programs and have the opportunity to opt out."

Maria Palumbo, a spokeswoman for Express Scripts, didn't respond to eight telephone and e-mail requests seeking comment.

Lilly employees compiled a guide to hiring scientists to write favorable articles, complained to journal editors when publication was delayed, and submitted rejected articles to other outlets, according to the documents.

The use of ghostwriters has created "a huge body of medical literature that society can't trust," said Carl Elliott, a University of Minnesota bioethicist who has written about the practice.

The documents also showed that Lilly urged doctors to prescribe Zyprexa for elderly patients with dementia, an unapproved use for the antipsychotic, even though the drug maker had evidence the medicine didn't work for such patients.

Zyprexa costs $3,000 to $9,000 more per year than an older, generic antipsychotic drug called haloperidol, according to the Lilly suit, citing a study of Veterans Administration hospitals.

The insurance plans sued the drug maker in 2005, contending it used researchers, pharmacy benefit managers, advocacy groups, and public agencies to promote Zyprexa.

In September, US District Judge Jack Weinstein allowed the plaintiffs, so-called third-party payers, to sue Lilly as a group. He also said he found "sufficient evidence of fraud" to justify letting the case go to trial. Indianapolis-based Lilly appealed that ruling to the US Court of Appeals in New York, which has yet to rule.

While PBMs negotiate on behalf of insurers, most states don't designate them as agents of the benefit plans, said Robert Garis, a pharmacy professor at Creighton University in Omaha who studies the industry. As a result, they aren't legally required to act only in the best interest of their clients, he said. Maine is one of a few states that have specified PBMs as fiduciaries, or agents, he noted.

"The companies have gotten around that by adding language to their contracts that exclude them from having to meet those fiduciary duties," Garis said.

Since PBMs process prescriptions, they possess information about which doctors treat the mentally ill, and thus would be good targets for Zyprexa marketing letters, Garis said. Firms such as AdvancePCS advise companies on creating formulary lists and setting required copayment amounts. The PBMs also operate their own mail-order prescription services, he said.

In AdvancePCS's 2004 pitch to Lilly offering to send out letters promoting Zyprexa, Kevin Aholt, the company's assistant vice president in charge of strategic alliances, said he could target physicians based "on the most recent AdvancePCS claims data," according to the unsealed documents.

Cramer, the CVS spokeswoman, said in her statement that the chain "includes disclosures in these communications to physicians indicating that funding has been provided by a pharmaceutical manufacturer," and that "CVS Caremark does not share any patient health information with the pharmaceutical company sponsor."

The proposal by AdvancePCS to Lilly didn't include a reference to a requirement that it disclose to doctors that the letters were being sent under an agreement with Lilly.

"There's no question that these folks are all in bed together," said Richard Beck, executive director of the Texas Pharmacy Business Council, a trade group. "They make these deals and never disclose them. It's the clearest example of a conflict of interest I can think of."

Internal e-mails also showed that Lilly benefited as early as 2003 from information gleaned from Zyprexa letters sent by AdvancePCS.

Lawyers for the health plans suing Lilly over Zyprexa contend the AdvancePCS letters contained information that "was false and misleading regarding the safety, effectiveness and risks" of the drug, according to court filings unsealed along with the e-mails.

Steven Fuchs, an official at the PBM, asked Lilly officials in an April 2004 e-mail whether he should include information about Zyprexa's ability to calm agitated patients in the next round of letters to doctors.

"Would a discussion of that be something you would want to include?" Fuchs asked, according to the document.

Lilly marketing executive Scott Dell responded in an e-mail that officials at the drug maker had discussed asking AdvancePCS to include material highlighting "the new bipolar maintenance indication for Zyprexa."

"These kinds of undisclosed relationships are a form of self-dealing," he said.

On Express Scripts' website, the company has a "client pledge" in which it vows to "always align our interests with those of our clients and our members." It also promises to "provide our clients with a detailed disclosure of our sources of revenue and financial relationships with drug manufacturers."

Beck, the Texas pharmacists' lobbyist, said the conflicts of interest for companies that both represent health insurers in their search for cheaper medicines and market those drugs for the drug makers "are just too obvious to ignore."

"How does marketing a manufacturer's drug help hold down costs?" he said.