Pfizer Pays $2.3 Billion For Marketing Fraud
September 3, 2009
Pharmaceutical company Pfizer Inc. agreed yesterday to plead guilty to a federal criminal charge of illegally marketing a painkiller drug. The company also agreed to pay $2.3 billion in the settlement as a penalty for illegally marketing and promoting the use of Bextra and other medicines for unapproved uses.
The settlement, which is the largest ever by a drug maker accused of marketing wrongdoing, stems from Department of Justice charges that Pfizer falsely marketed and promoted four of its medicines – Bextra, Lyrica, Zyvox and Geodon. The company agreed to pay $1.3 billion in criminal fines and forfeiture and $1 billion in combined federal and state civil False Claims Act settlements. "We regret certain actions taken in the past, but are proud of the action we've taken to strengthen our internal controls," Pfizer said in a statement. "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."
Amid charges of promoting drugs for uses that they weren't approved for by the Food & Drug Administration, Pfizer was also charged with paying kickbacks to doctors and lavishing them with expensive gifts in a concerted effort to convince doctors about the viability of these drugs. "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," said Tony West, assistant attorney general for the civil division of the Justice Department.
It is such promotional efforts by pharmaceutical companies that compelled Congress to author the Physician Payments Sunshine Act, which is currently being debated and negotiated. The bill would essentially call for pharmaceutical and medical device companies to publicly report all of their gifts to doctors – including ad specialty items. So, while pharmaceutical companies have agreed to stop the kickback and gift marketing policies that they've conducted for decades, they are now being forced to take a more critical look at their ad specialty purchases as well. "To me it was so clear from the start that we [the industry] were going to be made the sacrificial lamb," said Gregg Emmer, vice president and chief marketing officer of Top 40 distributor Kaeser & Blair (asi/238600). "The pharma industry didn't want the government sticking their nose in what they really do so they told the public that promotional products were the problem. It is ludicrous."
As part of the agreement with the Department of Justice, Pfizer will now create a mechanism for doctors to report questionable marketing and promotional conduct by the company's sales representatives.