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Two former Amgen salespeople allege improper drug marketing

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Times Staff Writer

Until last spring, Marc Engelman was a successful salesman for biotech giant Amgen Inc. His specialty: selling Enbrel, a powerful psoriasis treatment that costs nearly $20,000 a year.

The highly profitable medication is approved only for patients with serious forms of the skin disease and comes with side effects including an increased risk of severe infection and congestive heart failure.

But after five years at Amgen, Engelman says he left the company after failing to go along with aggressive and possibly improper marketing practices to boost Enbrel sales beyond its approved uses. The Laguna Niguel resident contends that the company required salespeople to gain access to patient medical information in doctors’ offices and market the drug directly to patients, many of whom may not have needed the medication.

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Another former employee, Elena Ferrante of New Jersey, says she was fired in 2005 for the same reason. Both are seeking damages in arbitration proceedings.

Amgen, based in Thousand Oaks, insists that its sales force plays by the rules. “Our sales creed emphasizes that Amgen sales representatives follow compliance guidelines with absolute consistency,” spokesman David Polk said. As for the arbitration cases, he said, “the company does not comment on pending litigation or personnel matters.”

Federal privacy laws strictly protect patient medical information. Allowing salespeople access to confidential patient information could violate those laws, experts say.

Doctors are allowed to prescribe a Food and Drug Administration-approved drug for any reason. But drug companies are barred from marketing drugs for uses beyond what’s listed on its label, or so-called off-label uses.

In recent years, many top drug companies, but not Amgen, have been fined by the federal government as much as hundreds of millions of dollars for violations, and the industry has increased self-regulation -- although critics say the practice remains pervasive.

The former employees’ allegations against Amgen come as the company is confronting a host of regulatory and financial pressures. Its stock lost a third of its value last year after studies found its top-selling anemia drugs may increase the risk of heart attacks and strokes in some patients. Amgen cut as many as 2,600 jobs, about 13% of its total, this fall.

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On Tuesday, Chief Executive Kevin Sharer said Amgen’s year-end results, due this month, were better than expected, largely on companywide cost cutting. “Amgen has never been through anything of this scale before,” Sharer said in a presentation to investors, referring to recent setbacks with its anemia franchise. “We dealt with the situation effectively and stabilized our business.”

Amgen’s stock rose 94 cents to $46.33 on Tuesday.

The two former salespeople contend that Amgen executives inappropriately instituted a promotional campaign in 2005 to pump Enbrel sales by requiring salespeople to visit dermatologists’ offices and request to look through medical files.

If allowed, they say, the sales team would search for patients with psoriasis, then compose and send letters -- on the doctor’s letterhead and signed by the physician -- suggesting patients consider Enbrel.

In some cases, they said, the salespeople would pose as office employees and contact insurers to request whether a patient could get pre-approval to use Enbrel, clearing the way for physicians to prescribe the drug.

The two former employees filed evidence in the arbitration proceedings including company memos, supporting e-mails, documents and an audio recording made by a sales manager to Engelman that partially describe or make reference to the sales program at issue.

Both former employees say doctors weren’t directly paid for access to patient files. But many of the same doctors who allowed access to their patient charts, they say, were paid as much as thousands of dollars to host dinners and lectures advising physicians and patients about the drug.

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In papers filed in Ferrante’s arbitration hearing, Amgen denied her claims, saying the suit “fails . . . to state a claim or claims upon which relief may be granted.” The company said Ferrante was an “at will” employee with no contract and could be terminated at any time. The company has not yet filed a response to Engelman’s arbitration claim.

In 2002, Amgen paid almost $10 billion to purchase Immunex Corp., which created Enbrel. The drug first was approved to treat rheumatoid arthritis and later for psoriasis. Sales have slowed in recent years with more competition from a new generation of psoriasis drugs. Enbrel sales in 2006 were just under $3 billion.

By 2005, “Enbrel sales were slowing and the feeling you got was do what you need to get sales, period,” said Engelman, 45. “I felt it was wrong and we were crossing lines.”

“My client is prepared to prove he was harmed by not following these improper activities,” said his lawyer, Lydia Cotz, who also represents Ferrante.

Several doctors and drug industry experts interviewed by The Times said the sales practice -- as described in the arbitration claims -- appeared to violate patient privacy laws.

But the experts had differing opinions as to whether the program amounted to off-label marketing, saying the regulations that prohibit illegal promotion of drugs are open to interpretation.

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Peter Barton Hutt, a former FDA lawyer who teaches a class on drug law at Harvard Law School, said it would be hard to prove Amgen violated marketing rules by going after patients with a milder form of the same disease for which a drug was approved.

“Off-label marketing to me is if you have a drug for colon cancer that you promote for brain cancer. It has to be that clear,” he said.

Others were less sure. Former Medicare chief Gail Wilensky said the test would be which patients were contacted and what was marketed to them. “It smells bad on the surface,” she said.

Dr. Seth Matarasso, a San Francisco dermatologist, said such a program would be “clearly unethical” if proved true. “Are you kidding me? This would break so many no-nos, it isn’t funny.”

Engelman began working as a salesman at Immunex in 1996, and when the company was acquired, he moved to Amgen. He said he exceeded his sales goals every year and had good performance reviews until his last year after he declined to ask physicians for access to their patient medical files.

Engelman provided The Times with what he identified as a voice mail recording from his sales manager as evidence that the company was insistent its sales team promote Enbrel using information culled from patient files.

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According to the recording, she asked Engelman to visit a minimum of two medical offices in his area and pull psoriasis patient medical records “since we need a significant boost in sales.”

“I know this is something you weren’t able to do last year, so that is something that absolutely needs to be done,” she added.

A separate undated memo was distributed to sales representatives in Engelman’s district spelling out “Best Practices Guidelines” for reviewing psoriasis patient files.

The memo states the program is “one, if not the most important aspect of how [our psoriasis business] will grow in 2006. . . . This process is a win-win for all involved as the patients that have given up on traditional therapies are educated on new ones, customer’s patient base increases and patient flow for biologics increases. “

Engelman voluntarily left the company last spring after receiving his negative performance review. He is now working outside the drug industry.

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daniel.costello@latimes.com

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