Legal News

Pfizer Makes History With $2.3B Fraud Settlement

By Ashby Jones

Well, if the DOJ comes up with a few more settlements like this, we might actually see the needle move on that budget deficit.

The news: Pfizer and its subsidiary, Upjohn, have agreed to pay $2.3 billion to settle criminal and civil liability arising out of the illegal promotion of painkiller Bextra, which was pulled from the market in 2005, as well as a handful of other drugs. As part of the agreement, Pfizer agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud. The company has also settled civil charges related to Bextra, schizophrenia drug Geodon, antibiotic Zyvox, and anti-epilepsy drug Lyrica.

According to the DOJ’s press release (link not available), the deal represents the largest health-care fraud settlement in DOJ history.

In a statement (link not available), Pfizer said it has also reached agreements with attorneys general in 42 states and the District of Columbia to settle state civil consumer protection allegations related to past practices concerning Geodon. The company will pay a total of $33 million to settle these.

"These agreements bring final closure to significant legal matters, said Amy W. Schulman, Pfizer’s GC, in a statement. "We regret certain actions taken in the past, but are proud of the action we've taken to strengthen our internal controls and pioneer new procedures so that we . . . comply with state and federal laws . . . ”

According to the DOJ press release, Pfizer promoted Bextra for off-label uses not approved by the FDA. The DOJ also alleges that Pfizer paid kickbacks to health-care providers to induce them to prescribe Bextra and the other drugs. In its statement, Pfizer denies all the kickback charges, but concedes “improper actions related to the promotion of Zyvox.”

Providing even more reason to hope that, in our next life, we come back as a whistleblower, the government will pay $102 million to six whistleblowers who helped trigger the False Claims Act investigation, which made up the backbone of the civil charges lodged.

Full post as published by Law Blog - WSJ.com on September 02, 2009 (boomark / email).