Pfizer Inc. has agreed to plead guilty to a criminal charge brought by the federal government relating to an illegal and fraudulent promotion of its now-withdrawn Bextra pain medicine. The giant drug company will pay a record $2.3 billion to settle allegations it improperly marketed 13 different medicines. The world’s biggest drug maker was called a repeat offender by the U.S. government, a label that was well-deserved. Pfizer, with no apparent fear of being caught, was marketing drugs to patients and doctors for unapproved uses. You may recall that Pfizer pleaded guilty in 2004 to an earlier criminal charge of improper sales tactics. The company’s practices have been under U.S. supervision since that time.
Pfizer took a $2.3 billion charge late last year to settle allegations involving Bextra and other drugs, but the company didn’t provide any details at the time. Mike Loucks, acting U.S. Attorney for the District of Massachusetts, had this to say about Pfizer and its conduct:
The size and seriousness of this resolution, including the huge criminal fine of $1.3 billion, reflects the seriousness and scope of Pfizer’s crimes.
Frankly, after having dealt with the drug industry in litigation over the years, I wasn’t a bit surprised at Pfizer’s conduct that led to the criminal charges. Unfortunately, Pfizer isn’t the only bad apple in the drug industry barrel. While this settlement is the largest to date for improper marketing of prescription drugs, Eli Lilly and Co. agreed to pay $1.42 billion earlier this year for off-label sales of Zyprexa, its schizophrenia drug. Pfizer will pay $503 million to resolve marketing practices involving Bextra, $301 million related to its schizophrenia drug Geodon, $98 million for Zyvox and about $50 million for its blockbuster drug, Lyrica, used to treat nerve pain and seizures.
In addition to the $2.3 billion fine, Pfizer will take new charges of up to $33 million to resolve state civil consumer fraud allegations related to promotions of Geodon. Associate Attorney General Thomas Perrelli said the settlement illustrates ways the Justice Department “can help the American public at a time when budgets are tight and health care costs are rising.”
According to federal officials, the U.S. drug industry has paid out more than $11 billion in similar settlements over the past decade. But one consumer advocate voiced hope that the latest penalty was so big it would curb the abuses. Bill Vaughan, an analyst at Consumers Union, the nonprofit publisher of Consumer Reports observed:
There’s so much money in selling pills, that there’s a tremendous temptation to cheat. There’s a kind of mentality in this sector that (settlements) are the cost of doing business and we can cheat. This penalty is so huge I think consumers can have some hope that maybe these guys will tighten up and run a better ship.
You have to wonder how Pfizer can keep operating like it has over the past several years considering that the FDA is supposed to be regulating the drug industry. But this company, like a vast number of drug manufacturers, really believes it is above the law. Criminal charges are now being brought. But to really get their attention individuals — and not just as companies — will have to face criminal prosecution.
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