fizer is to pay out $2.3 billion and has pleaded guilty to illegal promotion of a number of drugs, notably the withdrawn anti-inflammatory Bextra in “the largest healthcare fraud settlement in the history of the US Department of Justice”.
The settlement includes a $1.3 billion “criminal penalty” for promoting several off-label uses and dosages of the COX-2 inhibitor Bextra (valdecoxib) which was voluntarily withdrawn from the market in 2005 over safety concerns. Pfizer is also paying $503 million to resolve civil allegations concerning past promotional practices for Bextra. $301 million for the schizophrenia drug Geodon (ziprasidone), $98 million for the antibiotic Zyvox (linezolid) and $50 million for Lyrica (pregabalin), which is approved for epilepsy, fibromyalgia and neuropathic pain.
The settlement also includes a civil payment of $48 million to resolve allegations relating to certain payments to healthcare professionals involving nine other Pfizer medicines. The company noted that most of the alleged marketing mispractices took place during or before 2005.
Amy Schulman, Pfizer's general counsel, said that “we regret certain actions taken in the past, but are proud of the action we’ve taken to strengthen our internal controls and pioneer new procedures”. She added that “corporate integrity is an absolute priority for Pfizer, and we will continue to take appropriate actions to further enhance our compliance practices and strengthen public trust in our company”.
Kathleen Sebelius, US Secretary of the Department of Health and Human Services, noted that this “historic settlement will return nearly $1 billion to Medicare, Medicaid, and other government insurance programs”. She added that the HHS will “continue to seek opportunities to work with its government partners to prosecute fraud wherever we can find it. But we will also look for new ways to prevent fraud before it happens”.
Tony West, Assistant Attorney General for the Civil Division at the DoJ, said that “illegal conduct and fraud by pharmaceutical companies puts the public health at risk, corrupts medical decisions by health care providers, and costs the government billions of dollars”. This settlement “represent yet another example of what penalties will be faced when a pharmaceutical company puts profits ahead of patient welfare”, he added.
The most critical comments came from Mike Loucks, acting US Attorney for the District of Massachusetts. He said that “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”.
Claiming that the New York-based behemoth “violated the law over an extensive time period”, he noted that “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 over off-label promotion of the epilepsy drug Neurontin (gabapentin), “Pfizer was itself in its other operations violating those very same laws”.
Mr Loucks concluded by saying that the “enormous fine demonstrates that such blatant and continued disregard of the law will not be tolerated”. The DOJ noted that whistleblower lawsuits prompted its investigation, and six of those will receive payments totalling more than $102 million.
Pfizer took a related $2.3 billion charge to its fourth-quarter and full-year 2008 earnings in connection with the agreement, and no additional charge will be recorded in connection with the settlement.
Pfizer to buy Brazil’s Neo Quimica?
Meantime, a Brazilian newspaper has claimed that Pfizer is close to acquiring one of the country’s generic drugmakers Neo Quimica. The O Estado de S. Paulo says that the price could be in the region of 1 billion Brazilian reals, or $525 million.
The newspaper states that Neo Quimica owns a recently-upgraded manufacturing facility. Its unnamed sources also claim the companies had considered setting up a joint venture, but abandoned the idea in favour of a full takeover.