Public Citizen v. HHS, No. 11-1681, 2013 WL 5497180 (D.D.C. Oct. 4, 2013) (Howell, J.)

Friday, October 4, 2013
Re: "Annual reports that were required to be submitted by two companies, Pfizer, Inc. ('Pfizer') and Purdue Pharma L.P. ('Purdue'), to the Office of Inspector General ('OIG') of [HHS] as part of the companies' compliance with settlement agreements arising from the companies' illegal off-label promotion of drugs reimbursed by federal health care programs"
  • Adequacy of Search:  The court holds that HHS has not demonstrated that it conducted a reasonable and adequate search.  Plaintiff raised concerns "because certain documents referenced in released documents were not identified in the Vaughn index of withheld Pfizer documents or released to the plaintiff."  Defendant does not dispute that these documents were submitted, but instead says that they are not missing but were "identified in the search and withheld, as described" in the entries for three documents.  However, the court points out that the index only accounts for some of these documents.  "[D]efendant was or became aware that Pfizer's Section V.B.6 documents for five annual reports, not just three such reports, should exist."  "Yet, the defendant offers no explanation, and cites to no produced document, to account for the missing records for at least two annual reports."  Thus, although search adequacy is determined by the reasonableness of the search, "when, as here, the agency concedes that responsive documents exist and, further, that its search should have recovered those documents, by stating as a factual matter that they were, in fact, located, summary judgment is inappropriate when the plaintiff raises substantial questions about those assertions."
  • Exemption 4: The court agrees with defendant that "commercial information does not lose the protection of Exemption 4 'even when that information was directly related to . . . potential wrongdoing.'"  However, the court finds that defendant has not provided sufficient detail with regard to each category of challenged documents for the court to conclude that all categories of documents qualify as commercial. Examining the declarations, the court finds that insufficient information has been provided for it to conclude that "reportable event summaries" qualify as commercial.  The court notes that the declarant stated that these summaries "'often contain sales and marketing tactics, analysis of compliance with the [Corporate Integrity Agreement] and any corrective actions taken.'"  "The import of this statement is that Pfizer's summaries do not always contain information regarding 'sales and marketing.'"  Similarly, the court observes that "[w]ithout more information about the commercial nature of the information contained in the disclosure log summaries, the Court has insufficient information to evaluate whether these documents are being properly withheld."  The court agrees that "modifications to internal processes are sufficiently commercial to qualify for Exemption 4 because they involve the process by which the companies make decisions about managing and conducting their business operations."  However, the "name, title, and responsibilities" of persons deemed Ineligible Persons do not qualify as commercial. With regard to documents concerning reporting of investigations or proceedings, the court finds that while "allegations of the company's criminal or fraudulent conduct" qualify as commercial, "the identity of the agency conducting the investigation and the status of the investigation or proceeding" are not commercial in nature.  The court also concludes that communications about off-label promotions and off-label findings and detailing sessions qualify as commercial.  Additionally, the court notes that independent review organization reports, which "review [the companies'] transactions, systems, and compliance activities" are also commercial.  Finally, the court concludes that "to the extent that the 2009 Purdue Supplement pertains to its promotional monitoring program," it is commercial for Exemption 4 purposes. The court rejects HHS's argument that release of the information will impair its ability to obtain the type of information at issue in the future.  "With respect to the 'quality' of the submissions, the government is well-protected by the penalty terms of the [Corporate Integrity Agreements] for breaches of the reporting requirements." The court next examines each category of documents that are commercial to analyze whether there is possible competitive harm.  It finds that with regard to identification and removal of Ineligible Persons, "disclosure of these process changes may risk competitive harm by revealing confidential information about the companies' broader structure and operations in which the changes to Ineligible Persons processes are implemented."  With respect to "disclosure of documents containing the description of the allegations subject to investigations or legal proceedings," defendant has not provided a sufficient showing of possible competitive harm.  "Exemption Four does not shield embarrassing information or information that may cause reputational harm, but only information that can be affirmatively used by a competitor."  With regard to off-label marketing, "[n]either the Vaughn indices nor the declarations provide sufficient specificity for the Court to determine which documents may contain confidential commercial information and which do not."  Likewise, the "level of specificity provided as to the nature of the detailing session documents is too minimal to demonstrate, as is the agency's burden, that the release of this information would cause competitive harm."  However, "since the off-label findings by Pfizer reflect the company's 'findings' about its own sales force' [sic] activities, the potential risk of competitive harm from disclosure of what those activities are is plain."  Similarly, the court also finds that independent review organization reports also contain information which could cause competitive harm.  "[A] competitor could certainly use internal details of the sale and marketing of Pfizer's products against it a number of ways, such as setting prices, competing for ad space, or identifying areas of strength or weakness." Finally, despite the lack of detail concerning the 2009 Purdue Supplement, the court finds that "the subject matter plainly relates to core aspects of the company's marketing and sales efforts and, thus, how Purdue conducts those activities in compliance with applicable regulations and laws."  "Similar to the changes in business processes that the defendant-intervenors use to fulfill the Ineligible Persons requirement, disclosure of how Purdue has continued to perfect its promotional monitoring program could be put to affirmative use by its competitors."
Adequacy of Search
District Court
Exemption 4
Updated August 6, 2014