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Pfizer settles health care fraud suit for record $2.3 billion

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] The US Department of Justice (DOJ) announced Wednesday that pharmaceutical company Pfizer and its subsidiary have settled a health care fraud suit for a record $2.3 billion. The DOJ brought a felony claim against Pfizer under the Food, Drug, and Cosmetic Act alleging that the drug Bextra was misbranded and promoted for "off-label" uses with the intent to defraud or mislead. Subsidiary Pharmacia & Upjohn Company pleaded guilty to the charges and agreed to pay a $1.195 billion fine, the largest criminal fine ever imposed in the US. Pfizer has also agreed to pay $1 billion to settle civil claims brought under the False Claims Act alleging that it illegally promoted the drugs Bextra, Geodon, Zyvox and Lyrica, caused false claims to be submitted to health care programs, and paid kickbacks to health care providers. The settlement is the largest civil fraud settlement against a pharmaceutical company in US history. US Department of Health and Human Services (HHS) Secretary Kathleen Sebelius said that the settlement will secure the future of Medicare, Medicaid, and other government insurance programs. Pfizer denied all of the civil allegations except those that involve the improper promotion of Zyvox. Additionally, the pharmaceutical company entered into an agreement with the HHS that sets new policies and requires them to continue the maintenance of a compliance program for five years. At a press conference Wednesday, Associate Attorney General Tom Perrelli maintained that "combating health care fraud is one of this Administration's top law enforcement priorities." In July, Pfizer reached a final settlement with the Nigerian state of Kano over allegedly illegal clinical trials of the then-experimental antibiotic Trovan conducted in 1996. The suit accused the company of administering meningitis medication to 200 Nigerian children, 100 of which included Trovan, without government authorization or guardian consent. The Nigerian state of Kano claimed that the testing resulted in the death of 11 children and the incapacitation of 181 others and demanded $2.75 billion in damages. The company has denied the allegations, calling its actions ethical and beneficial, and is expected to pay $75 million to settle the suit.

Full post as published by JURIST - The Paper Chase on September 03, 2009 (boomark / email).