Pfizer settles for record federal criminal fine Pfizer to pay record $2.3 Billion

Josh Meyer - Washington, D.C. Bureau

11:38 a.m. CDT, September 2, 2009

WASHINGTON -- The Justice Department today announced the largest health-care fraud settlement in its history, in which American pharmaceutical giant Pfizer Inc. has agreed to pay $2.3 billion for fraudulent marketing and a wide array of other potentially illegal acts.

The landmark settlement was announced at a news conference at Justice Department headquarters and reflects a renewed emphasis by the Obama administration on holding U.S. corporations accountable for their activities, Justice Department officials said.

The settlement ends years of investigation by federal prosecutors in several states into Pfizer and its subsidiary, Pharmacia & Upjohn Company Inc., according to Justice Department documents and officials. Primarily, it resolves criminal and civil liability arising from Pfizer's illegal promotion of certain pharmaceutical products, including the anti-inflammatory drug Bextra.

As part of the settlement, Pfizer also 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 – and caused false claims to be submitted to government health-care programs for uses that were not medically accepted indications and therefore not covered by those programs.

The civil settlement also resolves allegations that Pfizer paid kickbacks to health-care providers to encourage them to prescribe those and other drugs.

The federal share of the civil settlement is $669 million, and state Medicaid programs will collect another $331 million.

"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."

Kathleen Sebelius, secretary of Department of Health and Human Services, hailed the settlement and said her agency ``will continue to seek opportunities to work with its government partners to prosecute fraud wherever we can find it.

"But we will also look for new ways to prevent fraud before it happens,'' Sebelius said. "Health care is too important to let a single dollar go to waste."



http://www.chicagotribune.com/news/nationworld/sns-dc-pfizer-justice,0,4751273.story

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