Pfizer to pay record $2.3B in fines

Pfizer to pay record $2.3B in fines

WASHINGTON (AP) — Federal prosecutors hit Pfizer Inc. with a record-breaking $2.3 billion in fines Wednesday and called the world’s largest drug maker a repeating corporate cheat for illegal drug promotions that plied doctors with free golf, massages and resort junkets.

Announcing the penalty as a warning to all drug manufacturers, Justice Department officials said the overall settlement is the largest ever paid by a drug company for violations of federal drug rules, and the $1.2 billion criminal fine is the largest ever in any U.S. criminal case. The total includes $1 billion in civil penalties and a $100 million criminal forfeiture.

Authorities called Pfizer a repeat offender, noting it is the company’s fourth such settlement of government charges in the last decade. The allegations surround the marketing of 13 drugs, including 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.

In an unusual twist, the head of the Justice Department, Attorney General Eric Holder, did not participate in the record settlement because he had represented Pfizer on these issues while in private practice.

Associate Attorney General Thomas Perrelli said the settlement illustrates ways the Justice Department “can help the American public at a time when budgets are tight and health-care costs are rising.”

Perrelli announced the settlement terms at a news conference with federal prosecutors and FBI and Health and Human Services Department officials.

The settlement ends an investigation that also resulted in guilty pleas from two former Pfizer sales managers.

Officials said the U.S. industry has paid out more than $11 billion in such settlements over the past decade, but one consumer advocate voiced hope that Wednesday’s penalty was so big it would curb the abuses.

“There’s so much money in selling pills that there’s a tremendous temptation to cheat,” said Bill Vaughan, an analyst at Consumers Union, the nonprofit publisher of Consumer Reports.

The government said the company promoted four prescription drugs, including the painkiller Bextra, as treatments for medical conditions different from those the drugs had been approved for by federal regulators. Authorities said Pfizer’s salespeople created phony doctor requests for medical information in order to send unsolicited information to doctors about unapproved uses and dosages.

Use of drugs for so-called “off- label” medical conditions is not uncommon, but drug manufacturers are prohibited from marketing drugs for uses that have not been approved by the Food and Drug Administration. They said the junkets and other company-paid perks were designed to promote Bextra and other drugs to doctors for unapproved uses and dosages, backed by false and misleading claims about safety and effectiveness.

Bextra, for instance, was approved for arthritis, but Pfizer promoted it for acute pain and surgical pain, and in dosages above the approved maximum. In 2005, Bextra, one of a class of painkillers known as Cox-2 inhibitors, was pulled from the U.S. market amid mounting evidence it raised the risk of heart attack, stroke and death.