AG announces settlements totaling over $2.2 billion with Pfizer
(MONTGOMERY)—Attorney General Troy King today announced two major settlements with the drug company Pfizer Inc. totaling $2,233,000,000. The State of Alabama will receive a total of $2,888,464 from these settlements.
In what is the largest health care fraud settlement in history, Pfizer will pay the states and the federal government a total of $1 billion in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct. This first settlement involves an agreement with Pfizer Inc to settle civil and criminal allegations that Pfizer and its subsidiaries paid kickbacks and engaged in off-labeling marketing campaigns that improperly promoted numerous drugs that Pfizer manufactures. A second and separate $33 million dollar settlement with Pfizer related to the alleged improper marketing of the antipsychotic drug Geodon.
“Today’s guilty plea and settlements underscore the need for my office to remain aggressive in our protection of consumers from pharmaceutical companies engaging in this type of conduct,” said Attorney General King. “I am committed to continue to monitor drug companies’ practices and to take appropriate action if we believe wrongdoing has occurred.”
Pfizer subsidiary, Pharmacia & Upjohn Company, Inc., has agreed to plead guilty to a felony violation of the Food, Drug, and Cosmetic Act (FDCA) and to pay a criminal fine and forfeiture of $1.3 billion. The criminal component of the resolution centers on the illegal marketing and promotion of Bextra, an anti-inflammatory drug that Pfizer pulled from the market in 2005. Because of the illegal promotion, Pharmacia & Upjohn Company, Inc. has agreed to plead guilty to a felony violation of the FDCA for misbranding the drug with the intent to defraud or mislead.
The government entities alleged that Pfizer, the largest pharmaceutical manufacturer in the world, engaged in a pattern of unlawful marketing activity to promote multiple drugs for certain uses which the Food and Drug Administration (FDA) had not approved. While it is not illegal for a physician to prescribe a drug for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA.
In addition to the improper off-label marketing of these drugs Pfizer is alleged to have paid illegal remuneration to health care professionals to induce them to promote and prescribe Bextra, Geodon, Lyrica, Zyvox, Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft and Zyrtec. These payments allegedly took many forms, including entertainment, cash, travel and meals. Federal law prohibits payment of anything of value in exchange for the prescribing of a product paid for by a federal health care program.
This first settlement is the result of an investigation by the National Association of Medicaid Fraud Control Units, and will bring $2.2 million in restitution and penalties for the State of Alabama. Assistant Attorney General Bruce Lieberman, chief of Attorney General King’s Medicaid Fraud Control Unit, handled this case for the State of Alabama.
The second agreement settles allegations that Pfizer engaged in unfair and deceptive practices when it marketed Geodon for off-label uses. The State of Alabama will receive $688,364 as a result of this settlement for consumer protection purposes and investigative expenses. Deputy Attorney General Rushing Payne, chief of Attorney General King’s Consumer Protection Division, handled this case for the State of Alabama.
Geodon is the brand name for the prescription drug ziprasidone. The drug has been approved by the FDA for treatment of schizophrenia in adults and for manic or mixed episodes of bipolar disorder in adults. However, Pfizer promoted Geodon for a number of off-label uses, including promoting Geodon for pediatric use and for use at higher than FDA-approved dosages. While a physician is allowed to prescribe drugs for off-label uses, federal law prohibits pharmaceutical manufacturers from marketing their products for off-label uses.
As a condition of the first settlement, Pfizer will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices. The second settlement results in an agreement by Pfizer’s to change how it markets Geodon and to cease promoting its “off-label” uses, which are not approved by the U.S. Food and Drug Administration (FDA).