September 3, 2009

Pfizer Pays Record $2.3 billion penalty over illegal drug promotions

The U.S. Department of Justice announced yesterday that drug giant Pfizer agreed to pay a $2.3 billion penalty to settle claims over illegal drug marketing and promotion that violated federal drug laws over an extensive period of time. The $2.3 billion settlement is the largest health care fine in U.S. history.

Pfizer was charged with promoting four prescription drugs for "off-label" purposes, meaning that the companies marketed the drugs for uses other than for what they were specifically approved for by the FDA. Drug makers are prohibited by law from marketing or promoting drugs for uses that have not been approved by the FDA. Federal authorities say Pfizer's drug representatives provided unsolicited information to doctors about unapproved uses and dosages of four Pfizer drugs: the already-recalled Bextra (an anti-inflammatory), Geodon (anti-psychotic), Zyvox (an anti-biotic) and Lyrica (an anti-epileptic).

Additionally, Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. As such, Pfizer agreed to pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any health care fraud investigation. Pharmacia & Upjohn (a Pfizer subsidiary) will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

The remaining $1 billion will go toward settling civil claims made by Medicare, Medicaid, Tricare, and other government insurance programs since those programs paid for drugs that were prescribed for unapproved medical uses and therefore not covered. The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these drugs as well as others. The federal share of the civil settlement is $668,514,830 and the state Medicaid share of the civil settlement is $331,485,170.

According to Tony West, Assistant Attorney General for the Civil Division, "Illegal conduct and fraud by pharmaceutical companies puts the public health at risk, corrupts medical decisions by health care providers, and costs the government billions of dollars. This civil settlement and plea agreement by Pfizer represent yet another example of what penalties will be faced when a pharmaceutical company puts profits ahead of patient welfare."

Pfizer also agreed to a separate $33 million settlement of off-label marketing claim with 42 states, including Florida.

Click here to read more about this massive health care fraud settlement 


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