PharmExec Blog

Pfizer Settles Whistleblower Case for $2.3 Billion

WASHINGTON - SEPTEMBER 02:  Associate Attorney...
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Pfizer, on Wednesday, agreed to pay $2.3 billion to end a US Department of Justice investigation citing the company for illegal off-label marketing tactics related to a number of products. It represents the largest single settlement of its type for a pharmaceutical company, topping Lilly’s $1.4 billion Zyprexa settlement reached in January of this year.

Pfizer was accused by company sales representatives of encouraging promotion of the painkiller Bextra in doses beyond what the arthritis drug was sanctioned for, and at levels for which FDA specifically denied approval due to health concerns. Pharmacia & Upjohn Co., a subsidiary of Pfizer, also pled guilty to a felony count of fraudulent marketing.

Whistleblowers claimed that the drug company fully sanctioned off-label promotions on a number of drugs, even after warning letters were issued. One rep accused Pfizer of placating FDA after receiving a warning letter for Zyvox, yet the firm continued to allow reps to make claims to physicians that the drug was better than its far cheaper generic equivalent. 

The bulk of the money—$1.3 billion—will be used to settle criminal charges involving Pfizer’s promotional tactics, which the company pulled from the market in 2005. However, the DOJ ordered Pfizer to pay $503 million to settle civil charges of shady promotional activities. The breakdown is as follows: $301 million for Geodon, $98 million for Zyvox, and $50 million for Lyrica, as well as a $48 million in civil damages for payments given directly to physicians.

“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,” stated Kathleen Sebelius, Secretary of the Department of Health and Human Services.

Pfizer stated adamantly that it denies all of the civil allegations, with the exception of “certain improper actions” surrounding marketing strategies for Zyvox.

“These agreements bring final closure to significant legal matters,” stated Amy Schulman, senior vice president and general counsel for Pfizer.  “We regret certain actions taken in the past, but are proud of the action we’ve taken to strengthen our internal controls. We will continue to take appropriate actions to further enhance our compliance practices and strengthen public trust in our company.”

The $2.3 billion expense was accounted for in the company’s Q4 2008 earnings.

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  1. Posted September 2, 2009 at 2:44 pm | Permalink

    Eli Lilly’s #1 cash cow Zyprexa drug sale $38 billion dollars so far,has a ten times greater risk of causing type 2 diabetes over the non-user of Zyprexa.
    So,here we have a conflict of interest that this same company also is a big profiteer of diabetes treatment.

    Daniel Haszard

  2. Justice
    Posted September 3, 2009 at 7:44 am | Permalink

    The key to this case is that many of the off-label uses promoted were explicitly rejected by the FDA because of safety concerns. And what is unprecedented is not only the size of the penalty but the guilty plea to a felony, rather than simply a misdemeanor–something which essenially never happens in the context of pharma.

    We didn’t need another such case. But I was not long ago on a panel is which a senior exec at Pfizer wondered out loud (yet again) why public trust in the industry has fallen so low.


  3. Posted September 8, 2009 at 3:28 am | Permalink

    Eli Lilly has made $38 billion on Zyprexa and it was way oversold and caused diabetes and in some cases sudden death.

    Lilly still criminal on Zyprexa
    Please do a report on Lilly’s (NOW up to $4.6 billion) Zyprexa setllement payout is being stonewalled. 8 Lilly employees who are supposed ‘whistleblowers’ are getting $ 10 million each the real victims like me are being ignored.

    I am a living example of Zyprexa gone/done wrong was given it 1996-2000 off-label for PTSD got sudden high blood sugar A1C 14.7 in January 2000.The stuff was worthless for my condition PTSD and cost me thousands in co-pays gave me diabetes.

    Daniel Haszard

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