Philadelphia’s U.S. attorney a drug-case expert

The team of Justice Department lawyers in Philadelphia who engineered today's settlement of charges that drugmaker Eli Lilly illegally marketed its antipsychotic medication to the elderly is at the heart of the government's effort to crack down on health-care fraud.

The U.S. Attorney's Office in Philadelphia, along with Justice Department offices in Boston and San Francisco, has taken the lead in pursuing cases against drugmakers for illegally marketing products or manipulating prices charged to government health-care programs. The settlement with Lilly is by far the largest of these cases.

To a degree, the focus on health care in a handful of Justice Department offices around the country has to do with location - these offices lie amid a rich vein of pharmaceutical research and development. Boston is one of the world's leading centers for biotech while by some measures there is more traditional pharmaceutical development in the Philadelphia region than any other place in the world.

The San Francisco Bay region also is home to a number of leading drugmakers.

But those offices also have developed expertise in health-care fraud and that has attracted the attention of whistle-blowers and their attorneys who bring cases where they think they are likely to succeed.

"If you have a good whistle-blower case, you don't necessarily want to go talk to the U.S. attorney in St. Louis; you want to talk to [Justice Department lawyers] in Philadelphia or Boston or San Francisco," said Jim Pepper, of the Sheller law firm, which represented former Lilly sales representatives who helped the government make its case and stand to reap a windfall from the settlement.

But lawyers familiar with health-care prosecutions say that quite apart from its location, the Philadelphia U.S. Attorney's Office has a deep bench on health-care issues, likely because the office has been aggressively pursuing such cases for more than a decade.

In October, the office announced a settlement of charges that Cephalon had illegally marketed several of its drugs for non-FDA-approved uses, a $443 million hit to the Frazer pharmaceutical company. Earlier, among other cases, the office settled charges of price manipulation by Schering-Plough Corp. for the allergy drug Claritin, said Virginia Gibson, chief of the office's civil division.

"What you see is that the [whistle-blowers] can often bring their cases in any district, but a lot of these cases are filed in [Philadelphia] because we have a track record and we are willing to work with them," said the acting U.S. attorney in Philadelphia, Laurie Magid.

Magid accused Lilly of trying to create another blockbuster medication in Zyprexa with deceptive marketing practices aimed at fattening the company's bottom line, at the expense of patients.

"It was only approved for schizophrenia," added Linda D. Hoffa, chief of the criminal division in the Philadelphia office. "Yet it was being marketed to the elderly and it did have harmful side effects. The money was huge."