Pfizer will pay $2.3B to settle allegations of illegally promoting drugs

Pfizer Inc. and a subsidiary agreed to pay $2.3 billion to settle charges that it illegally promoted certain drugs. Missouri will get $22 million as its share of the settlement.

The U.S. Department of Justice said in a Wednesday release that the settlement with Pfizer and its Pharmacia & Upjohn Co. Inc. unit is the largest health care fraud settlement in the agency’s history. The agreement resolves criminal and civil liability of Pfizer (NYSE: PFE) in the case.

Missouri Attorney General Chris Koster said in a separate release that Missouri’s share of the settlement “shows why it is so important to our state to stay focused on Medicaid fraud.”

Information about whether Kansas is party to the settlement wasn’t immediately available from the DOJ, the Kansas attorney general’s office or Pfizer.

The DOJ said in its release that Pharmacia & Upjohn agreed to plead guilty to violating the Food, Drug and Cosmetic Act for misbranding anti-inflammatory drug Bextra with the intent to defraud or mislead. Pfizer withdrew the drug from the market in 2005. Pfizer promoted the sale of Bextra for several uses and dosages that the Food and Drug Administration wouldn’t approve because of safety concerns.

Pfizer will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter, the DOJ release said. Pharmacia & Upjohn will forfeit $105 million, for a total criminal resolution of $1.3 billion.

Pfizer also will 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 weren’t medically accepted and therefore weren’t covered by those programs.

The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these and other drugs. The federal share of the civil settlement is $668.5 million, and the state Medicaid share of the civil settlement is $331.5 million — the largest civil fraud settlement ever against a pharmaceutical company.

Pfizer acknowedged in a release “certain improper actions related to the promotion of Zyvox” but denied all other civil allegations.

Pfizer also agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services, that provides for procedures and reviews to avoid and detect similar conduct.

“Today’s landmark settlement is an example of the Department of Justice’s ongoing and intensive efforts to protect the American public and recover funds for the federal treasury and the public from those who seek to earn a profit through fraud,” Associate Attorney General Tom Perrelli said in the DOJ release. “It shows one of the many ways in which federal government, in partnership with its state and local allies, can help the American people at a time when budgets are tight and health care costs are increasing.”