Pfizer Inc. reached a $400 million settlement in a class action brought by its investors flowing from the company’s off-label drug marketing scheme. The class action stemmed from a comprehensive government investigation into Pfizer’s off-label marketing practices and payment of kickbacks to physicians. Pfizer ultimately pled guilty to illegally marketing its prescription anti-inflammatory drug, Bextra, in September 2009. The guilty plea came as part of a $2.3 billion settlement with the United States.
The shareholder suit was filed in the U.S. District Court for the Southern District of New York in 2010. The suit focused on allegations that Pfizer made false and misleading disclosures concerning its marketing practices for Bextra, Geodon (an antipsychotic), Lyrica (an antiepileptic), and Zyvox (an antibiotic) and concealed that the company was providing kickbacks to physicians to promote the sale of those drugs. The complaint filed by the shareholders goes on to say that Pfizer was aware of the risky consequences, including criminal and civil fines as well as disbarment from federal health care programs, related to its off-label marketing, yet it deliberately concealed this information from its investors.
Trial was set to begin February 10 after a pretrial victory for the Plaintiffs whereby the judge denied Pfizer’s motion to bar expert testimony claiming that Pfizer’s stock price was artificially inflated by $1.26 per share before its off-label marketing scheme came to light. The expert claimed that Pfizer’s false and misleading statements caused its investors to suffer losses. The $400-million settlement still must be approved by a New York federal judge.
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