Pfizer Inc. will pay $2.3 billion in a massive settlement of civil and
criminal charges for illegally promoting prescription drugs for unapproved
indications and bribing physicians with kickbacks, the U.S. Department of
Justice (DOJ) announced on September 2.
Federal prosecutors alleged that Pfizer and Pharmacia and Upjohn, a company
Pfizer acquired, promoted four of their drugs—valdecoxib, ziprasidone,
pregabalin, and linezolid—to health care professionals for unapproved
indications and thus violated the federal False Claims Act.
In addition to promoting off-label indications, a practice prohibited by
the Food, Drug, and Cosmetic Act, Pfizer was alleged to have induced
physicians to prescribe the company's products by flying them to resort
locations under the guise of consultant meetings and giving them lavish gifts
Pharmacia and Upjohn pleaded guilty to a criminal charge for"
misbranding Bextra [valdecoxib] with the intent to defraud or
mislead," according to the DOJ announcement. Prosecutors alleged that
valdecoxib, a nonsteroidal anti-inflammatory medication, was illegally
promoted for indications and dosages that the Food and Drug Administration
(FDA) had previously declined to approve because of safety concerns.
Valdecoxib was withdrawn from the market in 2005 at the FDA's request as
evidence emerged about serious and potentially fatal adverse events associated
with the drug, including cardiovascular events and severe skin reactions.
Valdecoxib was initially approved in 2001. Its annual sales in 2004 amounted
to $1.3 billion.
Federal authorities said this is the fourth settlement in the past decade
between Pfizer and the government regarding Pfizer's unlawful marketing and
promotional practices. In a previous case, Pfizer paid $450 million and
pleaded to felony charges for illegally promoting off-label uses of gabapentin
(Neurontin)—an activity involving Warner-Lambert, another pharmaceutical
company it had acquired.
U.S. Attorney for the District of Massachusetts Mike Loucks said Pfizer was
illegally marketing the drugs named in this lawsuit during the same time it
was negotiating a settlement for the same charges in the gabapentin case.
The DOJ has resolved a string of similar cases with other pharmaceutical
companies in recent years. In January, Eli Lilly and Co. reached a $1.41
billion settlement for off-label marketing of olanzapine, the largest such
settlement before the current Pfizer case.
Pfizer had already released some information about the settlement figure
eight months ago as it reported a huge markdown on its 2008 fourth-quarter
profit. It came at the same time that Pfizer announced plans to acquire Wyeth,
another major pharmaceutical company, for $68 billion.
The settlement includes a criminal fine of over $1.1 billion for the felony
charge, which is the largest criminal fine in DOJ history, said Associate
Attorney General Thomas Perelli at a press conference. About $1 billion will
go to Medicare, Medicaid, and other government-funded health care programs
because these programs had paid for the drugs under false claims.
The DOJ said it began investigating Pfizer's marketing practice after
whistleblower lawsuits were filed against the company in Pennsylvania,
Massachusetts, and Kentucky in 2003. The six whistleblowers will receive a
total of $102 million from the settlement. ▪