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FOR IMMEDIATE RELEASE
September 02, 2009
Pfizer Inc. to pay $2.3 billion in historic Medicaid fraud settlement

OLYMPIA… Attorney General McKenna today joined with other states and the federal government to announce a $2.3 billion settlement with Pfizer Inc. to settle civil and criminal allegations that Pfizer and its subsidiaries paid kickbacks and engaged in "off-label" marketing campaigns that improperly promoted numerous drugs that Pfizer manufactures.   "Off-label" refers to uses that have not been approved by the U.S. Food and Drug Administration (FDA).

“This historic settlement is the largest health care fraud settlement to date,” McKenna said. “It sends a message that states and the federal government take this kind of behavior very seriously – and allows us to recover millions for our state and federal health care plans, just when we need it the most.”

Pfizer will pay the states and the federal government a total of $1 billion in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct.

In addition, a Pfizer subsidiary, Pharmacia & Upjohn Company, Inc., has agreed to plead guilty to a felony violation of the Food, Drug, and Cosmetic Act (FDCA) and to pay a criminal fine and forfeiture of $1.3 billion. 

Washington’s share is roughly $9 million. AAG Dawn Cortez, director of Washington’s Medicaid Fraud Control Unit, facilitated the settlement for the state of Washington.

The criminal component of the resolution centers on the illegal marketing and promotion of Bextra, an anti-inflammatory drug that Pfizer pulled from the market in 2005. Because of the illegal promotion, Pharmacia & Upjohn Company, Inc. has agreed to plead guilty to a felony violation of the FDCA for misbranding the drug with the intent to defraud or mislead.

The government entities alleged that Pfizer engaged in a pattern of unlawful marketing activity to promote multiple drugs for certain uses which the Food and Drug Administration (FDA) had not approved. While it is not illegal for a physician to prescribe a drug for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA. 

This promotional activity included:

  • Marketing Bextra for conditions and dosages other than those for which it was approved;
  • Promoting the use of the antipsychotic drug Geodon for a variety of off-label conditions such as attention deficit disorder, autism, dementia and depression for patients that included children and adolescents;
  • Selling the pain medication Lyrica for unapproved conditions; and
  • Making false representations about the safety and efficacy of Zyvox, an antibiotic only approved to treat certain drug-resistant infections.

In addition to the improper off-label marketing of these drugs, the government entities allege  Pfizer paid illegal remuneration to health care professionals to induce them to promote and prescribe:

  • Bextra,
  • Geodon,
  • Lyrica,
  • Zyvox,
  • Aricept,
  • Celebrex,
  • Lipitor,
  • Norvasc,
  • Relpax,
  • Viagra,
  • Zithromax,
  • Zoloft, and
  • Zyrtec.

These payments allegedly took many forms, including entertainment, cash, travel and meals. Federal law prohibits payment of anything of value in exchange for the prescribing of a product paid for by a federal health care program.

As a condition of the settlement, Pfizer will enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

This settlement is based on nine qui tam cases that were filed in the U.S. District Court for the District of Massachusetts, the U.S. District Court for the Eastern District of Pennsylvania and the U.S. District Court for the Eastern District of Kentucky by private individuals who filed actions under state and federal false claims statutes.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Pfizer on behalf of the settling states. Team members included representatives from the Offices of the Attorneys General for the states of Massachusetts, Oregon, Ohio, New York, Virginia, Texas and Arkansas.

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Contacts:
Janelle Guthrie, AGO Communications Director, (360) 586-0725
Kristin Alexander, AGO Seattle Media Relations Manager, (206) 464-6432

 

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