Confirming illegal activities by drug companies for years, in an historic case against a major drug company, the U.S. Justice Department today announced the largest health care fraud settlement in history, for the illegal marketing and of paying kickbacks to doctors as incentives to perscribe drugs.

American pharmaceutical giant Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. have agreed to plead guilty to felony violation for misbranding Bextra with the intent to defraud or mislead. The company has agreed to pay $2.3 billion to resolve criminal and civil liability arising from the illegal marketing.

Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – i.e., any use not specified in an application and approved by FDA.

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, for a total criminal resolution of $1.3 billion.

In addition, Pfizer has agreed to 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.

 
Kickbacks

 The civil settlement also resolves allegations that Pfizer paid kickbacks to health care 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.

As a part of today’s resolution, six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery.

Historic Settlement and a Change

“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,” 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 size and seriousness of this resolution, including the huge criminal fine of $1.3 billion, reflect the seriousness and scope of Pfizer’s crimes,” said Mike Loucks, acting U.S. Attorney for the District of Massachusetts. “Pfizer violated the law over an extensive time period. Furthermore, 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, Pfizer was itself in its other operations violating those very same laws. Today’s enormous fine demonstrates that such blatant and continued disregard of the law will not be tolerated.”

One can only say about time.   It appears there has een a shift since the election, and a good one.   As the drive towards health care reform goes into high gear, ond can only hope this an indication of things to come.

Source

Department of Justice