Pharmaceutical giant Pfizer, Inc., and its drug subsidiary Pharmacia & Upjohn Company, Inc. are paying $2.3 billion to settle the largest criminal and civil health care fraud action ever brought by the U.S. Department of Justice. According the DOJ, six whistleblowers (‘relators’ in legalese) who filed qui tam lawsuits under the False Claims Act will collectively receive more than $102 million for their roles in uncovering fraud and “off-label” use of Pfizer drugs that were not approved by the FDA.
The civil portion of the settlements charged that Pfizer was in the practice of paying illegal kickbacks to doctors to have them prescribe Bextra, Geodon, Zyvox, Lyrica, and other prescription drugs, and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs.
Pfizer Inc got in trouble with its off-label promotional practices related to Bextra, which Pfizer voluntarily withdrew from the market in 2005. The final agreement also resolves other DOJ investigations involving alleged past off-label promotional practices concerning Zyvox, Geodon and Lyrica, allegations related to certain payments to healthcare professionals involving these and nine other Pfizer medicines, and several related qui tam actions. Pfizer previously disclosed a related $2.3 billion charge to its fourth-quarter and full-year 2008 earnings in connection with the DOJ agreement in principle on January 26, 2009. No additional charge to the company’s earnings will be recorded in connection with this settlement.
In addition, the company has reached agreements with attorneys general in 42 states and the District of Columbia to settle state civil consumer protection allegations related to its past promotional practices concerning Geodon. The company will pay a total of $33 million to the settling states and will take a charge in that amount to third-quarter 2009 earnings.