Pharmaceutical giant Pfizer will pay largest health-care fraud settlement in history

U.S. Justice Department announces largest health-care fraud settlement in history

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American pharmaceutical company Pfizer, Inc., and its subsidiary Pharmacia & Upjohn Company, Inc., have agreed to pay $2.3 billion to resolve criminal and civil issues arising from the company's illegal promotion of certain pharmaceutical products, the U.S. Justice Department announced today.

It is the largest health care fraud settlement in the history of the Department of Justice, according to the U.S. Department of Health and Human Services.

Pharmacia & Upjohn pleaded guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding it anti-inflammatory drug Bextra with the intent to defraud or mislead.

Pfizer pulled from Bextra the market in 2005.

The company promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns, the press release said. The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

In addition, Pfizer has 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 off-label promotion of pharmaceutical drugs by Pfizer significantly impacted the integrity of TRICARE, the Department of Defense's health-care system," said Sharon Woods of the Defense Criminal Investigative Service.

The TRICARE system is used by veterans and their families.

"This illegal activity increases patients' costs, threatens their safety and negatively affects the delivery of health-care services to the over nine million military members, retirees and their families who rely on this system. Today's charges and settlement demonstrate the ongoing commitment of the Defense Criminal Investigative Service and its law enforcement partners to investigate and prosecute those that abuse the government's health-care programs at the expense of the taxpayers and patients," Woods added.

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. As well, Pfizer also agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly detect any future instances of similar corporate conduct.

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