Former Amgen Rep Stymied By Arbitration

by Ed Silverman | Pharmalot
January 11, 2010

In October 2006, a former Amgen sales rep filed a complaint against the biotech for $10 million before an arbitrator, claiming she was fired in retaliation the year before for not complying with an allegedly improper marketing strategy for the Enbrel rheumatoid arthritis med. Elena Ferrante claimed Amgen sales managers encouraged reps to promote off-label and encouraged docs to prescribe Enbrel to patients who may not have needed the drug, according to Ferrante’s lawyer, Lydia Cotz.

When Ferrante refused to cooperate, Lydia Cotz, Ferrante’s attorney, says her client was fired, but ostensibly for other reasons, including not attending client dinners. Ferrante was a top seller who made about $400,000 a year in sales at the time she was dismissed, according to Cotz.


Three years later, the dispute remains unresolved, and Ferrante and her attorney contend the arbitration has amounted to a thinly disguised and expensive stalling tactic. Consequently, they say the proceedings have prevented the full extent of Amgen’s marketing actions from coming to light at a time when 15 state attorneys general are pursuing their own lawsuit against Amgen for an alleged ‘kickback scheme’ to boost sales of a different anemia med, Aranesp.

“As one of the most significant aspects of my arbitration case against Amgen involves allegations of Medicaid fraud, I believe that Andrew Cuomo, NYS Attorney General, should issue subpoenas to JAMS (the arbitration service), as should all of the states’ Attorneys General who are suing Amgen for Medicaid fraud,” Ferrante wrote us. “I am confident that this move would uncover a wealth of documentation supporting allegations of fraud.”

The issue, according to Cotz, is that JAMS arbitration proceedings allow employers to pursue confidentiality, even though she maintains an agreement that Ferrante was required to sign didn’t specify that arbitration would be kept confidential. “She never signed to that effect,” she says. “But the issues raised by clients should be mandated for public disclosure, because they affect the health and safety of the public.” As a result, she argues, info from the Ferrante case that may be pertinent to the multi-state investigation is unavailable for the state AGs to pursue.

“Arbitration can become a burial ground for misdeeds, which is why corporations want it,” says Rob Henning, another lawyer who represents a former Amgen employee in California. “With court records you can look up documents. The problem is in arbitration, it’s almost impossible to get those documents. It becomes a secretive forum. Some times, all parties want that – i. e. a private contract with salacious details…But when you’re talking about corporate fraud or the public policy interest of the state, this is of concern to all citizens. To use arbitration to essentially bury misdeeds presents a larger problem and should affect everyone.”

Meanwhile, Cotz maintains Amgen has used the arbitration to draw out the proceedings and generate thousands of dollars in legal costs to her client. “The cost to a plaintiff of initiating an arbitration is almost always higher than the cost of instituting a lawsuit,” she writes us. “These costs have a deterrent effect, often preventing a claimant from even filing a case.”

Henning notes that employers pay JAMS (Judicial Arbitration and Mediation Services), which is a for-profit service and, in turn, compensates individual arbitrators. “JAMS is a for-profit and owned by the people who do all the arbitration,” says Henning. “It’s significant because if you are the arbitrator and you know its always the employer paying for the arbitration, its not a fair system.”

Spokespeople for Amgen and JAMS declined to respond.

photo courtesy of ohadweb on flickr creative commons