Pfizer to pay $2.3B for marketing fraud
American pharmaceutical corporation Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. have agreed to pay $2.3 billion to settle criminal and civil liability charges of marketing fraud.
“This historic settlement will return nearly $1 billion to Medicare, Medicaid, and other government insurance programs, securing their future for the Americans who depend on these programs,” said Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services.
The case is officially the largest healthcare fraud settlement in the history of the Department of Justice, according to officials.
Pharmacia & Upjohn Company has pleaded 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.
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.
Pfizer will also 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 healthcare programs for uses that were not medically accepted and therefore not covered by those programs.
“Illegal conduct and fraud by pharmaceutical companies puts the public health at risk, corrupts medical decisions by healthcare providers, and costs the government billions of dollars,” said Tony West, Assistant Attorney General for the Civil Division. “This civil settlement and plea agreement by Pfizer represent yet another example of what penalties will be faced when a pharmaceutical company puts profits ahead of patient welfare.”
The civil settlement also resolves allegations that Pfizer paid kickbacks to healthcare 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.
As part of the settlement, Pfizer also has agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter.
Six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery.
“The Department of Health and Human Services will continue to seek opportunities to work with its government partners to prosecute fraud wherever we can find it,” said Sebelius. “But we will also look for new ways to prevent fraud before it happens. Healthcare is too important to let a single dollar go to waste.”
Photo by vlauria obtained via Creative Commons license.
