Energizing A Litigation Group - Results - Part II

Wednesday, March 1, 2006 - 00:00

The Editor interviews Lisa Martinez Wolmart, Lauren
Freeman-Bosworth
, Elizabeth Hall, Beth
Trent
, Jonathan Wasserman and Paul Weissman,
Litigation and Conflict Management, Schering-Plough.

Editor: Please tell us about your background and your role in
Schering-Plough's litigation group.

Martinez Wolmart: I came to Schering-Plough with extensive experience
as outside counsel, having spent a total of 15 years in private practice, most
recently as a partner at Pitney Hardin. My experience includes handling various
complex litigation matters including commercial, business disputes, business
torts, franchise litigation, restrictive covenants, and trade secrets.

I spend approximately 30% of my time managing my litigation docket (including
managing all of the company's product liability litigation) and the rest
advising management. I like the philosophy of Tom Sabatino, our general counsel,
and PD Villarreal, that an in-house litigators' most important role is to
partner with our business clients, and provide sound legal advice to help them
achieve their business goals within the bounds of the law.

Freeman-Bosworth: Prior to joining Schering-Plough, I worked as a
litigator at Kramer Levin Naftalis & Frankel in New York where I handled
complex securities litigation, environmental disputes, white collar criminal
defense, and other commercial cases.

I work on major complex commercial cases. I spend most of my time either
discussing litigation concerns with the business people or working directly with
outside counsel on litigation matters.

Hall: I clerked immediately after graduating and then joined
Lowenstein Sandler's litigation department. A year later, I received a call
about the position at Schering, which I viewed as a unique opportunity for a
relatively new lawyer. I support PD, Lisa and Jonathan in the management of
large litigations and have direct responsibility for some smaller disputes. I
also spend time working closely with our business people to resolve potential
disputes before they escalate to litigation.

Trent: I began my career at Cravath Swaine & Moore, then worked at
GE Capital and most recently at PriceWaterhouseCoopers as a corporate governance
and compliance consultant. When PD told me that Schering was expanding its
litigation department, it was a great fit for me.

I handle the company's Average Wholesale Price (AWP) cases. This type of
litigation is endemic in the pharmaceutical industry. These cases allege that
the AWP used by pharmaceutical companies for certain drugs results in unlawful
inflation of certain government drug reimbursements. We recently won a case in
West Virginia because we were able to explain to the jury that our use of the
AWP was entirely lawful.

Wasserman: My first legal job was with the U.S. Department of Justice
in their honors program. I was there for three years and then went to work for
Lowenstein Sandler until 2000 when I joined Schering-Plough's litigation group.

I am currently Senior Legal Director for Antitrust and Litigation and handle
the company's antitrust litigation, antitrust counseling and general litigation.
I also counsel our client on licensing and acquisition opportunities and, as an
example, provided antitrust counsel on a deal with Bayer whereby we are now the
exclusive distributor of their primary care products in the U.S., which include
Levitra, Avelox, and Ciprofloxacin.

Weissman: I was a prosecutor in the U.S. Attorney's Office in New
Jersey for 19 years before I came to Schering-Plough. I specialized in
white-collar prosecutions especially large securities fraud, bank fraud, and FDA
related fraud cases.

I have been at Schering-Plough for four years and work primarily on criminal
investigations launched by the U.S. Attorney's Offices in Philadelphia and
Boston. I also work with our compliance people and oversee internal
investigations.

Editor: What actions contribute to energizing the Schering-Plough
litigation group?

Freeman-Bosworth: We have a formal process for evaluating cases early
on and bouncing those assessments off others in the group. By representing the
same client, you can see consistent patterns in disputes or potential disputes
that may confront the company. We can then counsel our clients proactively to
address ways to avoid litigation. That is our preventative law role.

We partner with the business people to work with them in making decisions
about specific litigation strategies. We also work with our business people in
deciding whether to fight a particular case or to resolve it for business or
other reasons. The culture within the legal department encourages an open and
free-flow of ideas. It is often useful for me to get another person's feedback
on something I am working on so I can learn from their experiences.

We know the company and its people, so we can save outside counsel time in
locating the right information or witness. We handle that process internally and
bring outside counsel in once we have identified the right individuals, alerted
them that they might be contacted by our outside counsel and, to the extent
appropriate, explained why. People in the company feel a level of comfort if
they are first briefed by lawyers in the legal department before outside counsel
contacts them.

Martinez Wolmart: I am able to provide advice on disputes early before
they become a crisis. Because I and other members of the litigation group manage
groups of cases and share our experiences, we have an overview that enables us
to develop common strategies for managing litigation and moving cases forward.

Our convergence program with outside counsel will provide additional
opportunities for us to benefit the company. We will assist the firms that are
selected to become more familiar with the company, its people, its needs and
expectations. Having participated in convergence processes as outside counsel, I
know from experience that it is an effective way of increasing the
cross-fertilization of ideas not only between us and the firms, but also among
the firms. By a mutual sharing of information, the company can reduce the costs
involved when firms reinvent the wheel. The litigation group will play a key
role in assuring that the company realizes maximum value from the convergence
program.

Hall: PD is an advocate of having the litigation group intervene early
in disputes. Early involvement allows us to gain a greater understanding of the
business interests at stake and to develop stronger relationships with our
clients. It also enables us to work more effectively with our outside firms to
develop litigation strategies that are aligned with the goals and interests of
the Company.

Trent: AWP cases have been filed all over the country, so we work with
our national counsel to manage them. I work closely with them to determine our
strategy and how it should be implemented. They help streamline the cases for
trial, and I serve as a sounding board for their trial arguments.

Wasserman: My role is to be active in the litigation we manage so we
know as much as, if not more than, outside counsel. We participate in interviews
and discussions with all potential witnesses in a case. I review the documents
that have been produced and then I participate in the depositions of witnesses
as well as the filing of necessary motions. As in-house counsel, I like to think
that I know the client better than anyone whereas a law firm litigator only sees
the company through the peephole of the litigation. The insights that I gain as
a result of my active involvement in litigation means that I have first hand
experiences that enrich my role in our compliance programs and in counseling.

Weissman: It is particularly important for pharmaceutical companies to
have someone like myself who is versed in criminal law as part of the in-house
litigation team. Pharmaceutical companies have been under scrutiny from various
quarters. We operate under consent decrees and a corporate integrity agreement,
which provides for the company to be monitored by an independent review
organization.

The process is further complicated because the settlements we have
entered into are often for claims under the Medicaid program, which is a joint
federal and state program. A large portion of the settlement amounts goes to the
states so you also need to have independent agreements with each state. I am
called upon to interpret the terms of the various documents and to advise with
respect to violations or potential violations.

Although we have a state of the art compliance system, it is important to
keep in mind that a compliance system is not a total guaranty that an employee
will not do something contrary to the company's policy. If this happens, I am
called in to advise as to the steps that must be taken to contain those
situations. It may be necessary to reeducate, train, and discipline those
involved. You also need to self-report to the appropriate government body when
required by law or the corporate integrity agreement. That is a tough regime
because it forces you to decide whether something is a probable violation. That
line is often not clear so you may have to report an action which you do not
believe is a violation.

Editor: The litigation group is quite diverse, both as to race and gender.
Why is this beneficial?

Trent: As a woman and a minority it is wonderful to work at a place
where diversity is not just a legal matter or a numerical objective. The
dedication of the company's top management to diversity leads to better
outcomes. Because it is more sensitive to the diverse nature of its customers,
it is better able to meet their needs. Overall, diversity stimulates creativity
so we can meet the challenges the company faces in a global marketplace. For
example, the company is active in the development of drugs for AIDS treatment.
That involves dealing with developing countries as well as the developed world.
Having a diverse workforce allows us to better understand and respond to issues
that arise in our global markets.

Editor: Would you comment on the importance placed by Schering-Plough on
its reputation, including involvement in community service initiatives?

Trent: Corporate reputation is another area where Schering is a
leader. That is an essential and integral part of the ability to do business
successfully. It cannot be a façade but must affect every element of the
business. That is particularly true for pharmaceutical companies because we are
highly regulated. Also, we are constantly being examined by the media in terms
of health and public issues so it is very difficult for a pharmaceutical company
to succeed without having a good reputation.

Hall: I have found that Schering has a genuine interest in
community service. A recent example is a project undertaken by the law
department to refurbish an apartment for young adults recovering from serious
mental illnesses. The day-long project gave us an opportunity to give back to
the community as a team led by our general counsel and his wife, who showed true
dedication to the project.