Pfizer has to pay the government $2.3 billion for a series of drug marketing suits, including marketing the painkiller Bextra “with intent to…mislead the public,” a felony violation of the Food, Drug and Cosmetic Act. FindLaw has more:
(T)he criminal charges against Pfizer come from “off-label” marketing of…Bextra, an anti-inflammatory which Pfizer yanked from the shelves in 2005. According to the Department of Justice (DOJ), Pfizer marketed the drug for a variety of uses which the Food and Drug Administration (FDA) specifically refused to approve due to safety concerns.
The criminal fine against Pfizer is $1.195 billion, with another $105 million to be paid by its subsidiary Pharmacia & Upjohn Company Inc. Whistleblower suits filed in Massachusetts, Pennsylvania and Kentucky triggered the federal investigation.
According to the DOJ, the size of Pfizer’s fine came in part because of the company’s duplicitous dealings with federal prosecutors. As one US attorney put it, “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.”
In addition to the honor of largest criminal fine of any type from the feds ever (according to the DOJ), Pfizer will also pay the largest civil fraud settlement ($1 billion) ever forced on a pharmaceutical company in the US.
BusinessWeek has this to say about the fine:
“It’s an ugly blemish for Pfizer, but at least it’s essentially over. And while $2.3 billion ain’t chicken feed, it’s affordable,” said Carol Levenson, research director at Gimme Credit, a corporate-bonds research service. The settlement had little effect on Pfizer’s stock price—shares closed 10¢ lower on Wednesday, at 16.28.
The affordability of the fines is a problem regulators face in deterring such activity, say industry critics. If a drug generates billions of dollars each year in sales, fines totaling even $1 billion do not offset the money to be made from off-label marketing. “Time will tell” whether the Pfizer fine will stop other companies from unlawful promotions, said Scott Simmer, an attorney with Blank Rome who represents three of the whistleblowers involved in the settlement. “I do believe these practices are endemic throughout the industry.”