Announcement of Pfizer’s Off-Label Settlement a Harbinger of Increasing Accountability

Last Wednesday, the Justice Department held a conference to announce Pfizer’s off-label criminal and civil settlement for its fraudulent marketing practices.

Pfizer’s subsidiaries will plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding with the intent to defraud or mislead. It will pay a criminal fine of $1.195 billion and forfeit $105 million, bringing the total criminal settlement to $1.3 billion.

The civil settlement of $1 billion will resolve claims under the False Claims Act that Pfizer illegally promoted four of drugs (most notably the anti-inflammatory drug Bextra), caused false claims to be submitted to government healthcare programs for indications other than those approved by the FDA, and provided kickbacks to doctors to induce them to prescribe these drugs.

Pfizer has also entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services that will subject the company’s marketing practices to additional review procedures and safeguards to help avoid and promptly detect similarly offending conduct. For example, Pfizer’s executives will need to complete annual compliance certifications and the company will be required to make detailed disclosures on its website.

The settlement is notable enough for its sheer magnitude: it is the largest in the Department of Justice’s history; it also represents the largest criminal fine imposed ever in the United States for any matter.

But the story behind the story is also interesting. The settlement itself was already announced–and largely completed–by the Bush administration. But whereas the Bush administration was less likely to tout its strikes against big pharmaceutical companies, the Obama administration is happy to take the credit. This certainly signals a bleak future for the drug companies. The administration appears poised to go after these cases with more gusto, especially as it faces criticism for the high cost of Obama’s healthcare proposals.

In January, Eli Lilly and Company settled similar claims over its marketing of Zyprexa for $800 million. The success of that case can be traced directly to courageous stands taken by employee whistleblowers.

The six whistleblowers in the Pfizer case will share some $102 million of the federal portion of the civil recovery. As employee whistleblowers continue to work with the current administration, we can expect to see more of these announcements in the coming months.

Learn more about the Justice Department Conference
Learn more about Pfizer’s Corporate Identity Agreement
Learn more about Eli Lilly and Company’s Zyprexa case

Posted in Damages, Healthcare Fraud, Off-Label Marketing, Qui Tam Litigation, SettlementsNo Comments

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