ADVERTISEMENT
latest stories:

Record Pfizer $2.3-billion fraud settlement, windfall payout to states

record pfizer settlementPfizer executives have again promised to play by the rules after a record-setting $2.3 billion settlement announced Wednesday for fraudulent drug marketing, and the upshot could be a windfall of millions of dollars for state Medicaid programs.

The pharma giant Pfizer agreed to settle the pending lawsuits about wrongful marketing claims for Bextra (an anti-inflammatory), Geodon (an anti-psychotic), Lyrica (an anti-epileptic) and Zyvox (an antibiotic), all of which the company was pushing doctors to prescribe "off label"—for conditions for which the drugs had not been approved. It had also been accused of incentivizing doctors for prescribing these drugs for unapproved uses via kickbacks.

Under the False Claims Act, the encouragement of off label uses—those that the U.S. Food and Drug Administration (FDA) has not okayed—is illegal. Claims for reimbursement through Medicaid for these un-condoned uses were not ultimately accepted, setting off problems for both patients and the government.

"Illegal conduct and fraud by pharmaceutical companies puts the public health at risk, corrupts medical decisions by healthcare providers, and costs the government billions of dollars," Tony West, an assistant attorney general for the Civil Division, said at a press conference, the Los Angeles Times reported.

Representatives from Pfizer assert that the company has cleaned up its act, despite having faced similar allegations for fraudulently marketing Neurontin (an anti-epileptic drug) in 2004. "The reasons to trust Pfizer are because…the vast majority of our employees spend their lives dedicated to bringing truly important medications to patients and physicians in an appropriate manner," Amy Schulman, Pfizer's general counsel told The New York Times.

Much of the payout will be going back to the states and into the Medicaid programs. Illinois, for example, should get $11.3 million, much of which will go to its Medicaid program, and $1.3 million of which it will be used help to strengthen consumer protection, reported the Chicago Tribune.

A separate Pfizer settlement yesterday, for questionable marketing of the drug Geodon, will send $33 million to 42 states and the District of Columbia, welcome funds in tight times.

The six whistleblowers who tipped off investigators to the wrongdoing—five Pfizer employees and a doctor—will split $102 million of the settlement.

One of the whistleblowers, John Kopchinski, a former Pfizer sales rep and Gulf War vet said in a statement, "In the Army I was expected to protect people at all costs…At Pfizer I was expected to increase treatments at all costs, even when sales meant endangering lives," Reuters reported.

Image courtesy of Marc Smith via Flickr

Share this Article:

Comments

You must sign in or register as a ScientificAmerican.com member to submit a comment.
Scientific American Holiday Sale

Limited Time Only!

Get 50% off Digital Gifts

Hurry sale ends 12/31 >

X

Email this Article

X