Updated 4:15 p.m.
In the largest ever settlement in health care fraud enforcement, Pfizer and a subsidiary have agreed to pay $2.3 billion to resolve criminal and civil claims stemming from the illegal promotion of certain pharmaceutical products, the Justice Department announced today. Three whistleblower suits triggered the investigation.
Pfizer will pay $1 billion in civil payments and a $1.3 billion criminal penalty related to promotional practices involving the drug Bextra.
The Justice Department, along with several federal agencies, announced the settlement today at a news conference in Washington.
“Illegal conduct and fraud by pharmaceutical companies puts the public health at risk, corrupts medical decisions by health care providers, and costs the government billions of dollars,” Tony West, assistant attorney general for the Civil Division, said in a statement. “This civil settlement and plea agreement by Pfizer represent yet another example of what penalties will be faced when a pharmaceutical company puts profits ahead of patient welfare."
Pfizer's subsidiary, Pharmacia & Upjohn Co., agreed to plead guilty to a felony violation for misbranding of the anti-inflammatory drug Bextra, which Pfizer pulled from the market in 2005.
To resolve allegations under the civil False Claims Act, Pfizer agreed to pay $1 billion for the illegal promotion of Bextra and three other drugs: Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug. Justice officials said the settlement resolves claims that Pfizer paid kickbacks to health care providers to induce them to prescribe certain drugs.
The Justice Department said six whistleblowers will receive more than $102 million from the federal share of the civil recovery against Pfizer. The company also said it agreed to a corporate integrity agreement.
One whistleblower, John Kopchinski, a former sales representative for Pfizer in Florida, said in a statement: "At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn’t do that.”
Kopchinski's lawyer, Erika Kelton, said in a statement that Pfizer "had the gall to push" Bextra for certain uses that the FDA did not approve. “Ignoring serious health risks to increase sales is outrageous,” said Kelton, who practices in the Washington office of Phillips & Cohen.
A lawyer for Pfizer, Ropes & Gray partner Brien O’Connor, did not immediately comment on the settlement. Pfizer’s general counsel, Amy Schulman, said in a statement that the agreement brings “final closure to significant legal matters” and the company regrets “certain action” taken in the past. “Corporate integrity is an absolute priority for Pfizer, and we will continue to take appropriate actions to further enhance our compliance practices and strengthen public trust in our company,” Schulman said in the statement.
The U.S. attorney’s offices for the District of Massachusetts, the Eastern District of Pennsylvania, and the Eastern District of Kentucky and Justice’s Civil Division handled the cases.