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.Â
The bulk of the moneyâ€”$1.3 billionâ€”will be used to settle criminal charges involving Pfizerâ€™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 â€œcertain improper actionsâ€ surrounding marketing strategies for Zyvox.
â€œThese agreements bring final closure to significant legal matters,â€ stated Amy Schulman, senior vice president and general counsel for Pfizer.Â â€œWe regret certain actions taken in the past, but are proud of the action weâ€™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.â€
The $2.3 billion expense was accounted for in the companyâ€™s Q4 2008 earnings.