The New York Times‘ pharmaceutical industry reporter Alex Berenson scored a heck of a Page One scoop last week when he revealed that Eli Lilly was looking to reach a settlement with federal prosecutors over the company’s alleged inappropriate marketing of antipsychotic drug Zyprexa. A staggering “mea culpa” settlement figure of $1 billion or more was mentioned.
This was a big story, no question about it. Eli Lilly is a publicly traded company and the $1 billion settlement would be the largest ever paid by a drug company for improper drug marketing (so said the Times).
In the piece, reporter Alex Berenson cited sources who requested anonymity “because they have not been authorized to talk about the negotiations.” He also included a statement from an Eli Lilly representative saying, in part, “…we regularly have discussions with the government. However, we have no intention of sharing those discussions with the news media and it would be speculative and irresponsible for anyone to do so.”
So how did Mr. Berenson get the scoop? It turns out that it wasn’t through any tried-and-true gumshoe reporting techniques taught at j-school. He simply had the fortune of having the same last name as one of Eli Lilly’s attorneys.
According to a story posted today on Portfolio.com, one of the drugmaker’s outside attorneys at Philadelphia-based Pepper Hamilton had mistakenly emailed detailed, highly confidential information on the settlement talks to the reporter instead of Bradford Berenson, the intended recipient (co-counsel at another law firm).
The email gaffe, unquestionably one of the greatest fears of everyone handling sensitive information, is apparently the result of very similar email addresses: Mr. Berenson, the reporter, simply goes by berenson in his email address while Mr. Berenson, the attorney, goes by bberenson.
We can’t honestly fault the Times or its reporter for breaking this story. I would have done the same thing back in the day. But Mr. Berenson mislead by omission. He should have been upfront with readers about how he learned of the settlement talks. Since there was no official confirmation from either side, doing so would have gone a long way toward letting readers judge the credibility of the story for themselves. Mr. Berenson quotes Nina Gussack, a Pepper Hamilton lawyer representing Eli Lilly, as saying she couldn’t comment on the case. Judging from Eli Lilly’s own statement, it doesn’t appear that anyone alerted the company’s spokesperson as to how Mr. Berenson got the story.
Mr. Berenson’s earlier reporting on this topic has been called into question before. According to a respected federal judge, Mr. Berenson was “deeply involved” in an “illegal” scheme that effectively amounted to “stealing” documents. (Neither the Times nor Mr. Berenson have ever publicly explained the extent of his involvement.)
Eli Lilly is reportedly sticking by Pepper Hamilton, and I applaud the company for its loyalty. That said, I can’t help but wonder why an attorney at Pepper Hamilton had Alex Berenson’s email address in her email database in the first place. As I’ve argued before, reporters and attorneys are best left in separate corners. Especially when the latter specializes in high-profile, high-stakes crisis work. By any measure, Eli Lilly’s PR handling of allegations of wrongdoing regarding its Zyprexa marketing has been a debacle. If its attorneys are driving the media relations strategy, it’s easy to understand why.