PHARMA: Peter Rost’s confessions of a healthcare hitman

Rost_smallSo the book that Rost has been working on is out. (Here’s a very quick summary of his story I wrote back in March). It’s called The Whistleblower: Confessions of a Healthcare Hitman.

In contrast to John Mack’s review which calls it a little dull, I think it’s a very, very interesting tell-all and much more interesting than a fictionalized version would have been. It’s 200 pages and I devoured it in 2 hours. I am of course bitter that he stole my title, but we’ll let him off!

There are some problems with the book. First, Rost is a little late to the game on the series of corrupt practices that big Pharma has been involved in over the years. Marcia Angell did it better, and John Abramson gets better into the details. Rost’s chapter on that corruption (ch 19) is a big mess, because it presents several different types of malfeasance as being the same thing, whereas there are activities within big pharma that are way over the line, and others where the line may been approached but not crossed. In the latter case a pharma company may settle because it didn’t want to run the “death penalty risk” of not settling with an aggressive prosecutor and potentially being banned from government programs. The key point of that chapter gets a little lost—and that point is that breaking the law is a considered business risk for pharma and many other health care entities; more so when the “law” is unclear—which it often is.

However, the rewards are worth it and not just in pharma. After all St Barnabas paid a Medicare fine recently of $265m odd when it acknowledged overcharging some $630m! So crime does pay, and it pays in the health care world to fuzz up the notion of “crime”. (There is one great catch, which is that the front organization that nominated Rost for whiny whistleblower of the year was headed by a guy who’d done Federal time for Medicaid fraud). But I think the whole chapter could have been cut.

The other frustration with Rost’s book is that we don’t learn much about some key issues that are ongoing in the Genotropin suit and he hid the whole existence of the suit from the narrative, whereas I think it would have been better done to introduce it with everything else he was up to chronologically, as the rest of the book is organized. However, some of the lack of details is inevitable as that one has some while to play out…and at the moment it looks like Rost is facing an uphill battle. We do learn that there is or at least was an ongoing criminal investigation into the the Genotropin issue as well as Rost’s civil Qui Tam suit. That may have been public information but I didn’t know about it. But it’s a little like Wayne Rooney writing his autobiography aged 20!

Finally, Rost spends much time going on about how tough it is to be poor–but he was earning $500K a year until recently and must have some stashed away. He also doesn’t tell us how much he got out of Wyeth (and maybe he can’t under that settlement) even though he details in the book that apparently many Wyeth execs had to settle with their local tax authorities at great personal pain.

But in any event the book is mostly about what happened when Pfizer took over Pharmacia, and has some interesting revelations about how Pharmacia may have juiced its earnings to indue Pfizer to overpay. That, of course, wouldn’t exactly have been an unknown act (Enron? Worldcom?)—although Pfizer today is at pains to say that the SEC has already investigated this and found it baseless. Not that corporate America has any sway over the SEC, the DOJ or anything, unless your name is the same as the leader of the Senate’s, or the current President’s!

Other than those quibbles I genuinely found this a terrific page turner. For sure it’s written in a self-sympathetic manner. Well what did you expect? There’s no doubt that Rost enjoys pissing people off, and knows his way around some Internet tracking tools that few corporate suits understand. We also of course don’t hear Pharmacia/Pfizer’s side of the story—but it’s going to be very interesting if they try to explain that Rost was behind the Genotorpin scheme himself. Because their defense must be either that or he’s made the whole thing up. (And if they really are withholding a database of contracts from the DOJ, as Rost says, I assume that they’ll be found out one way or another).

But it’s a great read straight from the horse’s mouth of a guy fighting a massive corporation with the weapons he has at his disposal. And very entertaining too. I know that it will be read alot, especially in the pharma business! And it’s yet more embarrassment for a big corporation that had a knee-jerk reaction to a problem that it could have solved easily by a) coming clean and b) buying off the squeaky wheel.

It reminds a great deal of the Thatcher government that could have got rid of the whole Spycatcher scandal by paying the ex-spy his pension, and instead landed itself in deep doo-doo, while helping the ex-spy turned author Wright sell a ton more books!

Categories: Uncategorized

Tagged as: ,

8 replies »

  1. Thanks, Matt, I don’t need the ruling. Interesting that he won 3 of 4 but the headlines said he lost.
    It seems to take a combination of anger, dismay, guts and sometimes greed (if there is a reward attached) for someone to become a whistle blower. Can he go practice medicine?

  2. Don, if you really want I’ll send you the full ruling. Basically there were four hurdles, Rost won 3 and lost 1. He needs (I think) on appeal to show that there was a database of the malfeasance with an example of Medicaid/care paying for the drug in quesiton off label and I think he wins. Either it exits and Pfizers hiding it, or it doesnt. But this urely aint over, especailly as there’s a parallel criminal investigation into the same thing.
    But its pretty weird that he’d ruin his career over somehting that never happened?

  3. Don. No question that Medicare is a complex and overly complex program. But saying that “Medicare is a fraud in itself” is completely meaningless. And plenty of hospitals (Columbia/HCA & Tenet for a start) clearly did things well outside the spirit as well as the letter of the law.
    And given that there’s still a criminal investigation into Pfizer and Rost, whether blowing smoke or not, is appealing and thinks that he has a good shot at winning his civil suit (not to mention his unfair dismissal suit, which looks pretty strong to me given that he fits the description of a whistleblower according to the Judge in the round he just lost), I would say the jury is still out. Whether Rost wins or loses, this has hurt Pfizer which acted very foolishly by not solving the problem and not buying him off.

  4. Interesting review, Matt. Didn’t Rost lose his suit against Pfizer? What does that tell you?
    As for hospitals stealing from Medicare, how about Medicare stealing from consumers and providers? Goes on all the time. The reason hospitals and companies that are caught over billing Medicare is that the politicians and regulators write such confusing regulations that it’s never perfectly clear whether the over billing was due to misinterpretations of the regs or fraud. Often it’s a combination of both. Lots of investor-owned and not-for-profit hospital systems have been caught up in such mazes. Medicare is a fraud in itself.

  5. I’m pissed off at the hospitals who are allowed to steal money from the federal government by overbilling/defrauding Medicare.
    If I steal from the fed, I’m going to jail, i’m going to lose my house, car, etc.
    A big hospital steals a billion dollars from Medicare and the WORST case scenario is they get caught 5 years later and only have to pay back half of what they stole.
    What kind of sick joke is this? If I’m a hospital CEO, I come up with a plan to steal as much money from Medicare as possible. Whats the worst that could happen? I might have to pay back half of it.
    I want these hospitals closed, I want these CEOs going to jail. That will never happen, because the idiotic attorney general buys the hospital line about how they will be forced to close if they actually have to pay back the full amount they stole.
    Hospitals have a “license to steal” and a “get out of jail free” card courtesy of the federal government. What a sad pathetic world we live in.

  6. //knows his way around some Internet tracking tools that few corporate suits understand//
    Now I’m curious! Can I have your dog-eared copy when your done?

  7. I’m only half way through the book but find it a very fascinating read. It has been extremely revealing about how a gigantic corporation can (and will) whittle away at an executive that doesn’t like their embarrassing and illegal activities, and is willing to talk about it. That “We don’t learn much about …. the Genotropin suit” would, I expect, have been influenced by Roth’s attorney. I’d give this a MUST READ rating, just based on the first half that I’ve read, and it’s getting better with every page I turn.