Former Amgen Rep Says Arbitration Hides Misdeeds

by Ed Silverman | Pharmalot
August 5, 2010

Over the past few years, two Amgen reps have battled the biotech over arbitration proceedings they claim they were forced to enter as a consequence of employment disputes. In 2006, Elena Ferrante filed a $10 million lawsuit, charging she was fired in retaliation for not complying with an allegedly improper marketing strategy for the Enbrel rheumatoid arthritis med. Similarly, Marc Engleman accused Amgen of forcing reps to engage in off-label promotion and patient privacy violations. He subsequently resigned and later sued the biotech and an arbitration group for “procedurally unconscionable” practices.

 

In both cases, arbitration has dragged on with no apparent end in sight. Meanwhile, Amgen has successfully convinced arbitrators in both cases that confidentiality is warranted. As a result, numerous documents have allegedly been kept under wraps. For instance, documents that pertain to the Ferrante case have appeared in the Engleman case, according to their attorneys, but cannot be shared. And they maintain the arbitration groups, which are paid by Amgen, have been complicit. This may seem like inside baseball, but the attorney says the cache of documents may also contain information about alleged off-label marketing that may be of interest to government investigators.

For instance, as Amgen notes in a recent Securities and Exchange filing, subpoenas were received from US Attorneys in New York and Washington pertaining to HIPAA violations. Meanwhile, subpoenas were also received from Attorneys General from New York and New Jersey, who are probing violations of consumer fraud laws and state false claims acts concerning Enbrel. These are related to at least 10 qui tam, or whistleblower lawsuits that have spurred civil and criminal investigations among “a large number of states”.

Among the documents that remain out of view are internal emails and off-label studies, according to Lydia Cotz, Ferrante’s lawyer, who maintains confidentiality was never a condition of arbitration. “The parties agreement to arbitrate use the federal guidelines and also allow for the parties to go to court for injunctive relief, but no where in the agreement does it imply expressly that the arbitration proceeding or the documents are confidential. The documents are not confidential under any court rule or even under the Federal or state rules that are used to seal records,” she tells us. “The courts rely on transparency, but the presumption of confidentiality runs counter to the federal and state court, especially when the documents are serious public policy violations and effect the public’s health and welfare. Amgen has tried to construct an artificial restraint.”

Rob Hennig, who is Engelman’s lawyer, is equally vocal. “Amgen forced Mr. Engelman and Ms. Ferrante to agree to arbitration as a condition of their employment by misrepresenting the arbitration process…and has used arbitration against Ms. Ferrante and Mr. Engelman – both of whom complained of Amgen’s illegal marketing of the drug Enbrel – to minimize any bad publicity of its illegal conduct. (The company) has used the arbitration process as a burial ground for its fraud against the taxpayers and its illegal promotion of drugs for ever greater profits.

“Amgen demanded confidentiality in the Engelman proceeding 18 months after the Engelman arbitration started,” he continues. “Over Mr. Engelman’s vocal objections, this demand was granted by the arbitrator…without any acknowledgement that in whistleblower cases…confidentiality exclusively benefits the employer. Imposing confidentiality on a whistleblower case imposes a gag order preventing the exposure Amgen’s fraud and illegal activity, directly contravening the public policy purpose of these whistleblower laws in the first place.”

Meanwhile, Engleman sent us this note: “It’s a travesty of justice in the legal system. The little guy has no chance for a favorable decision against corporate America when they are paying the arbitrator. What arbitrator would make a ruling against corporate America? They would never be selected to arbitrate another case. My case against Amgen should be heard in the court of law, not hidden under the veil of arbitration, this way the public can know the truth of the illegal tactics that Amgen does in promoting their drugs which can lead to harm to patients.”

An Amgen spokesman sends us this statement: “Amgen believes that the remaining claims in these two arbitrations have no merit. We look forward to concluding these matters in the arbitration process agreed to by all parties. Apart from that, we will not comment on pending litigation or personnel matters.” A spokeswoman for the American Arbitration Association, which is hearing Engleman’s case, did not respond to a request for comment. A spokesman for JAMS, which is hearing Ferrante’s case, says he cannot comment on pending cases.