Pzifer to pay $2.3 billion in medicare/medicaid fraud settlement

Sep 4 2009

The Obama administration announced a landmark $2.3 billion health care fraud settlement with Pfizer, Inc. Wednesday, which is expected to change drug companies' promotion of off-label use of medicines.  

The Baltimore Sun reports that the Justice Department "said that Pfizer and its subsidiary Pharmacia & Upjohn Company Inc. have agreed to pay the unprecedented amount of civil and criminal penalties in order to end a series of investigations into their allegedly fraudulent marketing practices and other potentially illegal acts. The settlement reflects a renewed emphasis by the Obama administration on holding health care corporations accountable for their activities, especially in trying to market drugs for uses that haven't been approved, Justice Department officials and legal experts said."

The Sun noted: "Some companies will continue to risk prosecution for such questionable practices because the fines and penalties pale in comparison to the extraordinary profits that are being made on the widespread practice of marketing drugs for 'off-label' uses that have not been approved by the federal government" (Meyer, 9/3). 

Examiner.com notes that it is "the largest fine ever levied for fraud in the Medicare and Medicaid programs. ... Pfizer will be required to pay a $1.3 billion criminal penalty in addition to a civil fine of $1 billion. The charges relate to the marketing of the painkiller, Bextra. Bextra, generic name valdecoxib, was marketed as relieving symptoms of osteoarthritis and rheumatoid arthritis in adults."

Because the announcement was made at a Washington news conference, The Examiner notes that it "may suggest that the political environment for the pharmaceutical industry has become less welcoming despite the industry's promise to save the government $80 billion as part of health care reform" (Guilloton, 9/2).

Philadelphia Inquirer: "Authorities called Pfizer a repeat offender, noting this is the fourth such settlement of government charges in the last decade. The government said it would monitor the company's conduct for the next five years to rein in the abuses" (Hill, 9/3).

The Associated Press: "The allegations concern the marketing of 13 drugs, including Bextra and big sellers such as Viagra, Zoloft and Lipitor. As part of its illegal marketing, Pfizer invited doctors to consultant meetings at resort locations, paying their expenses and providing perks, prosecutors said. 'They were entertained with golf, massages, and other activities,' said Mike Loucks, the U.S. attorney in Massachusetts. Loucks said that even as Pfizer was negotiating deals on past misconduct, they were continuing to violate the very same laws with other drugs."

"To prevent backsliding this time, Pfizer's conduct will be specially monitored by the Health and Human Service Department inspector general for five years" (Barrett, 9/2).

Marketplace also reports on the case and "the down sides to off-label marketing" (9/2).