Pfizer and the Largest DOJ Settlement Ever: $2.3 billion
Posted by Trevor Reid on September 3, 2009
The CBS Evening News says the government “hit Pfizer, the world’s largest drug maker, with a record $2.3 billion in fines for violating federal drug marketing rules. Among other things, Pfizer was accused of promoting the pain medication Bextra [valdecoxib] for unapproved uses.” NBC Nightly News added that “[Pfizer is] admitting that the painkiller Bextra and 12 other drugs were promoted for what’s known as off-label use, which the FDA says put public health at risk in the process.” While ABC World News exclaimed “Bextra became a blockbuster, bringing in $1.2 billion a year, as sales reps assured doctors it could be used not just for arthritis, but for any acute pain. In exchange for hearing company sales pitches, doctors were paid up to $1,500 to attend meetings, and were treated to conferences at lush resorts, given air fare, hotels, meals, even massages.”
Officials at the departments of Justice and Health and Human Services called the agreement with Pfizer and one of its subsidiaries a cautionary example of their strategy to team up with states to police errant health-care businesses.
The settlement disclosed on Wednesday was the largest ever by a drug maker accused of marketing wrongdoing. Pfizer said in January that it had recorded a $2.3 billion settlement-related charge in the fourth quarter.
The four-year investigation uncovered a range of practices, including kickback payments to doctors in the sale of nine other drugs, among them the impotence drug Viagra and cholesterol pill Lipitor, officials said. The agreement resolves all “material pending matters” with the Justice Department, Pfizer’s general counsel, Amy W. Schulman, said in a statement.
The settlement reflects an emphasis by the Obama administration on holding U.S. healthcare corporations accountable for their activities, especially in trying to market drugs to patients and doctors for uses that have not been approved, Justice Department officials and legal experts said. They also noted that several states, and federal prosecutors in various jurisdictions, had been investigating Pfizer for much of the eight years of the Bush administration as well.
Although the investigation began and largely ended during the Bush administration, top Obama administration officials held a news conference on Wednesday to celebrate the settlement, thank each other for resolving it and promise more crackdowns on health fraud.
As part of the settlement, Pfizer will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the USA for any matter, according to the Justice Department. Pharmacia & Upjohn must pay a $105 million criminal fine.
As part of its illegal marketing, Pfizer invited doctors to consultant meetings at resort locations, paying their expenses and providing perks, prosecutors said.
“They were entertained with golf, massages, and other activities,” said Mike Loucks, the U.S. attorney in Massachusetts.
Loucks said that even as Pfizer was negotiating deals on past misconduct, they were continuing to violate the very same laws with other drugs.
To prevent backsliding this time, Pfizer’s conduct will be specially monitored by the Health and Human Service Department inspector general for five years.
In an unusual twist, the head of the Justice Department, Attorney General Eric Holder, did not participate in the record settlement, because he had represented Pfizer on these issues while in private practice.
Lawyers for whistle blowers have been working on the cases for about three years, according to Simmer and Barbara Bonar, name partner at the Kentucky-based litigation boutique B. Dahlenburg Bonar and another one of the whistle blower attorneys. Bonar represented Robert Liter, a former Pfizer salesman who marketed the anti-epilepsy drug Lyrica, she says. Once the federal government got involved in the whistle blower cases, Bonar says she focused primarily on obtaining information and passing it along to the government. Simmer says the whistle blower attorneys mostly focused on tracking down other Pfizer sales reps to corroborate their clients’ stories.
September 3rd, 2009 at 12:38 pm
As the $1.2 billion criminal plea portion of this settlement is the largest criminal fine ever imposed in the United States for anything and the U.S. is still the largest single-country economy in the world and the world economy is as big as ever: it seems this is very likely the largest criminal fine in human history. I would exclude obligations imposed on nations such as WWI reparations because they operate on a different plane and are more restitution than fine. Can anyone think of another contender?