Pfizer Slammed at $2.3 Billion: Largest Health Care Fraud Settlement Ever

9 years ago

The U.S. Department of Justice announced Wednesday, September 2, the "largest health care fraud settlement in its history." Pfizer Inc. with subsidiaries Pharmacia & Upjohn Company Inc. must pay $2.3 billion "to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products," according to the DOJ's news release. The pharmaceutical giant's story is a tale of seeming unrepentant profiteering, not through scarcity but misrepresentation.

All drug companies aren't bad. Who can discount the good humanity's seen through miracle drugs marketed ethically? But when drug companies are bad, they are very, very bad. Pfizer appears to keep falling into the same pit, having to pay government fines or settle lawsuits because it disregards FDA guidelines and patient health when marketing its wares.

Part of the breakdown on Pfizer's settlement from the DOJ press release:

Pharmacia & Upjohn Company has agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called "off-label" uses – i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

In addition, Pfizer has agreed to 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 were not medically accepted indications and therefore not covered by those programs. The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as other, drugs. The federal share of the civil settlement is $668,514,830 and the state Medicaid share of the civil settlement is $331,485,170. This is the largest civil fraud settlement in history against a pharmaceutical company. (DOJ)

Here's video from MSNBC.

As reported by news sources, this is also the fourth time Pfizer has had to settle this type of case since 2002. For instance, in a 2004 San Francisco Chronicle article it is reported that "A division of Pfizer Inc., (Warner-Lambert) agreed to ... plead guilty to two felonies and pay $430 million in penalties to settle charges that it fraudulently promoted the drug Neurontin for a string of unapproved uses."

(It) admitted that it aggressively marketed the epilepsy drug by illicit means for unrelated conditions including bipolar disorder, pain, migraine headaches, and drug and alcohol withdrawal.

... Prosecutors said Warner-Lambert turned Neurontin into a blockbuster drug with tactics like paying doctors to listen to pitches for unapproved uses and treating them to luxury trips to Hawaii, Florida or the 1996 Olympics in Atlanta. One doctor received almost $308,000 to tout Neurontin at conferences.

Doctors are free to prescribe drugs for uses not specified on their FDA- approved labels, but the FDA forbids drug companies from promoting them for those off-label uses. Prosecutors said Neurontin's manufacturers decided not to seek an expanded FDA label for the drug, an expensive process requiring solid proof from clinical trials. Instead, the company boosted sales through aggressive promotional strategies, even when scientific studies had demonstrated that it was not effective, the Justice Department said. (SFGATE, 2004)

Full disclosure: I was prescribed Neurontin in 2002 for an off-label use and it flipped me to a much darker place. Instead of lifting my depression, it exacerbated it. That's all I'll say because it's a painful subject. I was aware of the civil suit but elected not to join it.

This next piece of information reveals Pfizers shallow concern for the public and following the law.

"The size and seriousness of this resolution, including the huge criminal fine of $1.3 billion, reflect the seriousness and scope of Pfizer’s crimes," said Mike Loucks, acting U.S. Attorney for the District of Massachusetts. "Pfizer violated the law over an extensive time period. Furthermore, at the very same time Pfizer was in our office negotiating and resolving the allegations of criminal conduct by its then newly acquired subsidiary, Warner-Lambert, Pfizer was itself in its other operations violating those very same laws. Today’s enormous fine demonstrates that such blatant and continued disregard of the law will not be tolerated." (DOJ press release)

Back in 2004, Pfizer signed an agreement to stop doing this, a "promise to behave" in the words of the NYT. The whistle blower was a former Warner-Lambert employee, David Franklin, per the San Francisco Chronicle, who may have been rewarded more than $26 million for coming forward.

There's a whistle blower connected to Wednesday's announced settlement as well. John Kopchinski, a former Pfizer salesperson may be rewarded more than $50 million for turning on Pfizer. Per the NYT, Kopchinski said, "The whole culture of Pfizer is driven by sales, and if you didn’t sell drugs illegally, you were not seen as a team player."

Under Wednesday's settlement, Pfizer had to sign another agreement like the one it signed during the Neurontin case, another promise to be good.

Also, according to the NYT, while today's settlement announcement relates to an investigation executed largely under the Bush administration, President Barack Obama's administration is celebrating, perhaps with an eye on its critics.

It’s another step in the administration’s ongoing effort to prosecute any individual or organization that tries to rip off health care consumers and the federal government,” said Kathleen Sebelius, secretary of health and human services.

Republicans and Democrats on Capitol Hill have accused the Obama administration of failing to crack down adequately on health care fraud, arguing that huge savings in government health programs could be found with better enforcement. The settlement had been expected. Pfizer, which is acquiring a rival, Wyeth, reported in January that it had taken a $2.3 billion charge to resolve claims involving Bextra and other drugs. ... (NYT, "Pfizer Pays $2.3 Billion ...")

Wednesday's announcement has been blogged throughout the web on sites such as, the Wall Street Journal, and Discover Magazine where Sheril Kirshenbaum, writes that she's always been suspicious when associates who work for big pharmaceutical companies tell of wining and dining doctors, coaxing them to prescribe specific drugs.

And Pfizer's not the only pharmaceutical in the news today for unethical and illegal marketing practices. The New York Times reports in a different story published Wednesday that the Senate’s Special Committee on Aging recently and "quietly" released a document revealing the questionable marketing practices of Forest Laboratories. The article says the released document details how Forest turned Lexapro, not a breakthrough drug but an "afterthought" medicine, into a "best seller." In addition, Forest promoted off-label use in violation of FDA regulations.

In February, federal prosecutors in Boston announced a civil lawsuit against Forest claiming that the company illegally marketed both Lexapro and a closely related antidepressant, Celexa, for use in children and paid kickbacks to doctors to induce them to prescribe the medicines to children.

It is illegal to pay doctors to prescribe certain medicines to their patients. It is not illegal to pay doctors to educate their colleagues about a medicine. In recent years, federal prosecutors have accused many drug makers of deliberately crossing that line.

Lexapro was the sixth drug in a class of medicines that includes Prozac, Paxil, Zoloft, Luvox and Celexa. ... (New York Times, "Document Details Plan to Promote Costly Drug")

Forest, according to NYT, pays lots of money to doctors.

Under “Rep Promotional Programs,” the document said the company planned to spend $34.7 million to pay 2,000 psychiatrists and primary care doctors to deliver 15,000 marketing lectures to their peers in one year.

Only Eli Lilly, Pfizer, Novartis and Merck pay doctors more than Forest, reports NYT.

A key point in the article is that drug companies find ways to brand supposedly new drugs that are no more effective than older, cheaper drugs and pitch them to doctors and the public as an improvement, making a greater profit because they can charge more for "new" drugs. Senator Herb Kohl is quoted in the article saying that legislators wonder if these companies "blur" the line between medical education and marketing. He's concluded that "there is no line." This blogger would ask, "Do you mean marketing or bribery?"

Nordette Adams is a CE and also the African-American Books Examiner at Keep up with her writing adventures via Her411.

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