Pfizer Agrees to Pay Largest Healthcare Fraud Penalty in History

Source: BBC

US drugmaker Pfizer has agreed to pay $2.3bn (£1.4bn) in the largest healthcare fraud settlement in the history of the Department of Justice.

A subsidiary pleaded guilty to misbranding drugs “with the intent to defraud or mislead”.

Pfizer illegally promoted four drugs and caused false claims to be submitted to government healthcare programmes for uses that were not medically accepted.

US officials said Pfizer would have to enter a corporate integrity agreement.

It will be subject to additional public scrutiny by requiring it to make “detailed disclosures” on its website.

Pfizer’s general counsel said: “We regret certain actions taken in the past, but are proud of the action we’ve taken to strengthen our internal controls.”

“The size and seriousness of this resolution, including the huge criminal fine, reflect the seriousness and scope of Pfizer’s crimes,” said Mike Loucks, acting US attorney for the District of Massachusetts.

The company faces a criminal fine of $1.195bn and a subsidiary company of Pfizer – Pharmacia & Upjohn – will forfeit $105m, totalling a criminal resolution of $1.3bn.

The remaining $1bn fine was levied to resolve the allegations under the civil False Claims Act.

Four drugs

The civil settlement also relates to allegations that Pfizer paid bribes to healthcare providers to induce them to prescribe four named drugs. These are Bextra, an anti-inflammatory drug, Geodon, an anti-psychotic drug, Zyvox, an antibiotic and Lyrica, an epilepsy treatment.

The investigation was trigged by allegations made by six whistleblowers. They will receive $102m of the civil fines paid by Pfizer.

“Although these types of investigations are often long and complicated and require many resources to achieve positive results, the FBI will not be deterred from continuing to ensure that pharmaceutical companies conduct business in a lawful manner,” said Kevin Perkins, FBI assistant director, Criminal Investigative Division.

The pharmaceutical firm said earlier this year that it would pay the fine “to put issues that diminish trust behind us”.

Pfizer reported a 90% drop in profit to $268m in the fourth quarter of 2008, because of the $2.3bn legal settlement, indicating that the company was aware they would be paying this sum before the terms of the deal with the Department of Justice were announced.

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