Personal Injury Law

Repeat Offender Pfizer Pays Record $2.3 Billion Fraud Settlement

By Jane Akre

Pay Doctors, Defraud Medicare

Ritzy resorts. All-expense paid golf outings. False claims about drugs and off-label use.

Those are some of the charges that faced Pfizer which has pled guilty to criminal violations of the Food, Drug and Cosmetic Act.

The company has agreed to pay $2.3 billion to put the 'trust issues' behind it, the Justice Department announced Wednesday.

Pfizer agreed it illegally promoted four drugs, among them now-withdrawn painkiller, Bextra.

In a news conference Wednesday, Thomas Perrelli, Associate Attorney General, announced the historic civil and criminal settlement.

'When a drug is promoted for non-authorized uses, that are off-label not approved FDA, as was the case here, public health may be at risk and there is a real danger for patients that medical providers, who prescribe the medicine, don't have full information about the drugs' risks and benefits," he said.

Perrelli said the settlement includes a $1.195 billion criminal fine, which makes it the largest criminal fine in history.

Pfizer allowed false claims to be made about the drugs to Medicare and Medicaid and then was reimbursed for drug uses not medically accepted.

Medicaid and Medicare will be compensated $1 billion, with some of that money going to states, among them New York, which will receive $66 million.

Marketing fraud claims were also made concerning other Pfizer drugs – Zyvox, Geodon and Lyrica. Pfizer is also accused to inviting doctors to ritzy resorts, paying their expenses and perks in exchange for being 'consultants' to the company.

Six corporate whistleblowers brought the misconduct to light, reports the New York Times. They will share more than $100 million of the settlement money.

Kathleen Sebelius, Health and Human Services secretary, told a news conference, the Department of Justice spent four years investigating Pfizer.

'They actually charged and identified the senior managers who were responsible for the fraud' Sebelius said.

Bextra was pulled from the market in 2005 after evidence it raised the risk of heart attack and stroke.

Pfizer will now have to enter a corporate integrity agreement, reports the BBC.

Since the company is a repeat offender, as this is the fourth settlement it's made in the last decade to the government, Pfizer will be monitored for the next five years, the government announced.

Marketing fraud has become commonplace with almost every pharmaceutical company being accused of defrauding Medicaid or giving kickbacks to doctors.

In January, Eli Lilly was filed $1.4 billion for illegally marketing Zyprexa, an antipsychotic.

In addition to Pfizer, subsidiary, Pharmacia and Upjohn Company will also plead guilty to fraud concerning the promotion of Bextra.

The pharmaceutical company recently pledged to give $80 billion in concessions to improve the health care system. But the Obama administration has signaled it will not be business as usual.

Expect higher fines and doctors involved to be charged individually, the New York Times reports.

Pfizer is still expected to acquire Wyeth by year's end. Shares of Pfizer dropped 14 cents in midday trading. #

Full post as published by InjuryBoard on September 02, 2009 (boomark / email).