Pfizer’s $2.3 billion settlement, announced in September 2009, resolved federal criminal and civil allegations that the company illegally marketed the painkiller Bextra and three other prescription drugs for uses the FDA had never approved, and paid kickbacks to doctors who prescribed them. It was the largest health care fraud settlement in U.S. history at the time, and the criminal fine inside it was the largest criminal penalty the federal government had ever imposed on any company for any reason.1FBI. Pfizer Settlement
The Criminal Case Centered on Bextra
Bextra was an anti-inflammatory painkiller the FDA had cleared only for rheumatoid arthritis, osteoarthritis, and menstrual pain. Pfizer’s subsidiary Pharmacia & Upjohn Company Inc. pleaded guilty to a single felony count of misbranding Bextra with the intent to defraud or mislead.1FBI. Pfizer Settlement
Prosecutors said Pfizer promoted Bextra for pain after knee-replacement surgery and pushed 20-milligram doses on rheumatologists and orthopedists for arthritis treatment, even though only the 10-milligram dose was approved for that condition.2ABC News. Pfizer Fined $2.3 Billion for Illegal Marketing The FDA had specifically declined to approve those uses and dosages on safety grounds, and pulled Bextra from the market in April 2005.1FBI. Pfizer Settlement
Pharmacia & Upjohn agreed to pay a $1.195 billion criminal fine plus $105 million in forfeitures, for a criminal total of about $1.3 billion.3FindLaw. Pfizer Hit With Largest Criminal Fine in U.S. History The Department of Justice called it the largest criminal fine of any kind the federal government had ever collected. That record held until 2012, when BP agreed to $1.25 billion in criminal fines over the Deepwater Horizon spill.4PBS NewsHour. BP Pleads Guilty to 14 Criminal Charges
The Civil Case Covered Three More Drugs and a Kickback Scheme
Alongside the guilty plea, Pfizer paid $1 billion to resolve civil claims under the False Claims Act. Those claims reached beyond Bextra to three other drugs and to payments the government said were designed to buy prescriptions.1FBI. Pfizer Settlement
Geodon, Zyvox, and Lyrica
Geodon drew the most detailed allegations. The DOJ said Pfizer promoted the antipsychotic for depression, bipolar maintenance, anxiety, aggression, dementia, ADHD, OCD, autism, and post-traumatic stress disorder, none of them FDA-approved. Pfizer also pushed Geodon for pediatric and adolescent patients and at doses above what the FDA had cleared, and paid physicians to give promotional talks encouraging those prescriptions.5U.S. Department of Justice. Pfizer Settlement Press Release
Lyrica, a nerve-pain and seizure drug, was marketed for pain conditions the FDA had not approved, and pitched as a more potent successor to Neurontin. Zyvox, an antibiotic cleared only for certain drug-resistant infections, was promoted with unsubstantiated claims of superiority over Vancomycin. The FDA had sent Pfizer a 2005 warning letter over misleading Zyvox advertising. Pfizer later acknowledged that after directing its sales force to drop the cited materials, it failed to give adequate guidance, and representatives kept making the superiority claim.6Washington State Attorney General. Washington State Receives $1.3 Million in Settlement With Pfizer
Kickbacks to Prescribers
The civil case also alleged violations of the federal Anti-Kickback Statute. According to the DOJ, Pfizer funneled payments to doctors through speaker programs, mentorships, journal clubs, entertainment, and continuing medical education. Those inducements were tied not only to the four drugs at the center of the off-label charges but to a broader list of Pfizer products including Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft, and Zyrtec.5U.S. Department of Justice. Pfizer Settlement Press Release Court filings described pressure on sales representatives to promote drugs illegally; one former representative was quoted saying employees who refused were “not seen as a team player.”7Bernstein Litowitz Berger & Grossmann. Pfizer Amended Complaint
Where the Civil Money Went
Of the $1 billion civil recovery, $668.5 million went to the federal government and $331.5 million to state Medicaid programs.8Phillips & Cohen LLP. Pfizer’s Payment of $2.3 Billion Is Largest Healthcare Fraud Settlement Ever The affected payers included Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefits Program, all of which had reimbursed prescriptions written for unapproved uses.9U.S. Department of Justice. Fraud Statistics Overview
Six Whistleblowers Started It
The investigation grew out of six separate qui tam lawsuits, filed under the False Claims Act provision that lets private citizens sue on the government’s behalf and share in what the government recovers. The most prominent whistleblower was John Kopchinski, a former Pfizer sales representative whose complaint drove the Bextra case. Kopchinski received more than $51.5 million from the federal share, with an additional undisclosed amount owed from state recoveries.10NPR. Pfizer Whistleblower Tells His Story The six whistleblowers together received more than $102 million.11National Whistleblower Center. Pfizer Whistleblower’s Ordeal Reaps Big Rewards
What Pfizer Had to Do After the Settlement
Pfizer also entered a five-year corporate integrity agreement with the Office of Inspector General at the Department of Health and Human Services. The agreement required Pfizer to keep a chief compliance officer reporting directly to the CEO and the board’s audit committee, run annual compliance training for all employees, and give staff in promotional roles at least three additional hours of training each year.12HHS OIG. Pfizer Corporate Integrity Agreement
Pfizer also had to publicly disclose cash payments to medical practitioners for consulting, speaking, and clinical-trial work, and to hire an independent review organization to audit its compliance every year. Business unit presidents and finance directors had to personally certify each year that they had reviewed internal reports on speaker programs, consultant payments, and compliance statistics and knew of no violations.12HHS OIG. Pfizer Corporate Integrity Agreement
How Long the Record Stood
The $2.3 billion Pfizer settlement held the top spot in U.S. health care fraud enforcement for about three years. GlaxoSmithKline surpassed it in 2012 with a $3 billion settlement over its own off-label marketing and fraud allegations. Johnson & Johnson followed in 2013 at $2.2 billion, and Abbott Laboratories settled for $1.5 billion in 2012.13U.S. Food and Drug Administration. Major Pharmaceutical Settlements The Pfizer case remains one of the largest ever and set the template for the multibillion-dollar drug-company settlements that followed.