DOJ Announces Largest Health Care Fraud Settlement in Its History
In a combination of civil and criminal settlements, Pfizer, Inc. and its subsidiary Pharmacia & Upjohn Company, Inc. (collectively “Pfizer”) agreed to pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice (“DOJ”). The settlement with Pfizer arises out of civil and criminal allegations relating to Pfizer’s allegedly illegal promotion of certain drugs, most notably Bextra.
Pharmacia & Upjohn Company, Inc. agreed to plead guilty to a felony violation of the Food, Drug, and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter according to DOJ.
In addition, Pfizer agreed to pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs – Bextra; Geodon, an anti-psychotic drug, Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug – 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. The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as, other drugs.
Pfizer also agree to enter into an expansive corporate integrity agreement with the Office of Inspector General and the Department of Health & Human Services.
The DOJ press release is here: www.usdoj.gov/opa/pr/2009/September/09-aag-900.html
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