By Ransdell Pierson and Jeremy Pelofsky Ransdell Pierson And Jeremy=20
Pelofsky 47 mins ago
NEW YORK/WASHINGTON (Reuters) =96 Pfizer Inc agreed on Wednesday to=20
plead guilty to a U.S. criminal charge relating to promotion of its=20
now-withdrawn Bextra pain medicine and will pay a record $2.3 billion=20
to settle allegations it improperly marketed 13 medicines.
The world's biggest drugmaker was slapped with the huge fines after=20
being deemed a repeat offender in pitching drugs to patients and=20
doctors for unapproved conditions.
Pfizer, whose shares slid 0.5 percent, had pleaded guilty in 2004 to=20
an earlier criminal charge of improper sales tactics and its=20
marketing practices have been under federal supervision since then.
The company in January said it took a $2.3 billion charge late last=20
year to resolve allegations involving Bextra and other drugs, but did=20
not provide details at the time.
Wednesday's agreement was unveiled by the U.S. Department of Justice=20
and Health and Human Services Department.
"The size and seriousness of this resolution, including the huge=20
criminal fine of $1.3 billion, reflect the seriousness and scope of=20
Pfizer's crimes," said Mike Loucks, acting U.S. attorney for the=20
District of Massachusetts.
The settlement includes a $1.3 billion criminal fine related to=20
methods of selling Bextra, which was withdrawn from the market in=20
2005 on safety concerns. Pfizer acquired Bextra in its 2003 purchase=20
of Pharmacia Corp.
Pfizer's marketing team promoted Bextra for acute pain, surgical pain=20
and other unapproved uses, while its salesforce promoted the drug=20
directly to doctors for those unapproved uses and dosages, according=20
to the Justice Department.
The company and Pharmacia also used advisory boards, consultant=20
meetings and provided travel to lavish resorts to improperly promote=20
Bextra to doctors and made false and misleading claims about the=20
drug's safety and efficacy, the government said.
The settlement also includes $1 billion in civil payments related to=20
so-called "off-label" sales of drugs -- meaning for uses not=20
authorized by the U.S. Food and Drug Administration -- and payments=20
to healthcare professionals. Pfizer denied all of the civil=20
allegations, except for acknowledging improper promotions of the=20
antibiotic Zyvox.
"We regret certain actions taken in the past, but are proud of the=20
action we've taken to strengthen our internal controls," said Amy=20
Schulman, Pfizer's general counsel.
Justice Department officials said cracking down on fraud in the=20
healthcare industry was a key priority and comes as President Barack=20
Obama is trying to push through reforms of the $2.5 trillion=20
healthcare system to clip soaring costs.
The settlement and guilty plea are not expected to significantly hurt=20
Pfizer's ability to sell drugs, Morningstar analyst Damien Conover=20
said, "however, it could send the wrong message at a time when you're=20
making some pretty critical negotiations with the U.S. government on=20
healthcare reform."
Sandra Jordan, a former federal prosecutor and professor at the=20
Charlotte School of Law in North Carolina, said: "Pfizer can survive=20
this and pay the money. If it had fought the government at trial and=20
lost, and a judge imposed a criminal sentence, that could have=20
resulted in a corporate death penalty. That would have put Pfizer out=20
of business."
The settlement is the largest to date for improper marketing of=20
prescription drugs, topping the $1.42 billion Eli Lilly and Co agreed=20
to pay earlier this year for off-label sales of its Zyprexa schizophrenia=
drug.
Pfizer said it will pay $503 million to resolve practices involving=20
Bextra, $301 million related to its schizophrenia drug Geodon, $98=20
million for Zyvox and about $50 million for its blockbuster Lyrica=20
used to treat nerve pain and seizures.
On top of the $2.3 billion fine, Pfizer said it would take new=20
charges of up to $33 million in the third quarter to resolve state=20
civil consumer fraud allegations related to past promotions of Geodon.
"Pfizer ripped off taxpayers across the country to pad its bottom=20
line," New York Attorney General Andrew Cuomo said.
The company said most of the alleged improprieties took place during=20
or before 2005. But some are as recent as 2007, while Pfizer was=20
essentially still on probation for improper Neurontin promotions.
Six whistle-blowers, including John Kopchinski, a former sales=20
representative who blew the whistle on Pfizer's Bextra marketing=20
tactics, sparking the government probes, will be rewarded with more=20
than $102 million under the False Claims Act.
Kopchinski's share of the reward was expected to be more than $51.5 milli=
on.
Pfizer Chief Executive Jeffrey Kindler had been its general counsel=20
from 2002 until taking the helm in 2006.
Pfizer did not specify whether it had disciplined any executives in=20
connection with the latest infractions.
In the 2004 case, Pfizer agreed to pay $430 million to federal and=20
state governments and pleaded guilty to criminal charges of illegally=20
marketing epilepsy drug Neurontin for migraine headaches, pain and=20
bipolar disorder. Pfizer obtained Neurontin in its 2000 acquisition=20
of Warner Lambert Corp.
Due to the earlier settlement, Pfizer's marketing practices have been=20
under federal supervision for the past five years.
Under the new settlement, Pfizer has entered into another Corporate=20
Integrity Agreement with the U.S. Department of Health and Human=20
Services, requiring it to adhere to a specified compliance program=20
for five more years.
The pact will require Pfizer to post on its Web site information=20
about payments to doctors such as travel or honorarium, and set up a=20
system for doctors to report questionable conduct by Pfizer's representat=
ives.
Pfizer shares were down 9 cents, or about 0.5 percent, at $16.29 in=20
afternoon trading on the New York Stock Exchange.
(Reporting by Jeremy Pelofsky in Washington and Ransdell Pierson,=20
Bill Berkrot, Lewis Krauskopf, Jonathan Stempel and Joan Gralla in=20
New York; Editing by Maureen Bavdek)
http://news.yahoo.com/s/nm/20090902/bs_nm/us_pfizer_settlement_23/print
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