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By John Ashcroft Institute for Constitutional Studies

Pfizer and a subsidiary agree to settle fraud claims with the United States Justice Department. Kansas City Business Journal.

Pfizer Inc. and a subsidiary agreed to pay $2.3 billion to settle charges that it illegally promoted certain drugs. Missouri will get $22 million as its share of the settlement, and Kansas will get $6 million.

The U.S. Department of Justice said in a Wednesday release that the settlement with Pfizer and its Pharmacia & Upjohn Co. Inc. unit is the largest health care fraud settlement in the agency?s history. The agreement resolves criminal and civil liability of Pfizer (NYSE: PFE) in the case. Pharmacia & Upjohn agreed to plead guilty to violating the Food, Drug and Cosmetic Act for misbranding anti-inflammatory drug Bextra with the intent to defraud or mislead. Pfizer withdrew the drug from the market in 2005. Pfizer promoted the sale of Bextra for several uses and dosages that the Food and Drug Administration wouldn?t approve because of safety concerns.

Pfizer will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter, the DOJ release said. Pharmacia & Upjohn will forfeit $105 million, for a total criminal resolution of $1.3 billion.

Pfizer also will pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs ? Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug ? and caused false claims to be submitted to government health care programs for uses that weren?t medically accepted and therefore weren?t covered by those programs.

The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these and other drugs. The federal share of the civil settlement is $668.5 million, and the state Medicaid share of the civil settlement is $331.5 million ? the largest civil fraud settlement ever against a pharmaceutical company.

Full post as published by Showmeblawgs on September 06, 2009 (boomark / email).