Pfizer to settle drug marketing case, pay up $430 in fines
Saturday, May 15, 2004 14:00 IST
Pfizer Inc will plead guilty to criminal charges and pay $430 million in fines to settle charges that a company it bought four years ago illegally promoted non-approved uses for a drug by flying doctors to lavish resorts and paying them hefty speakers' fees to tout it.
The settlement with the world's largest pharmaceutical company over the company it bought, Warner-Lambert, includes a $240 million criminal fine - the second-largest criminal fine ever imposed in a health care fraud prosecution, the Justice Department said.
Whistleblower David Franklin, the scientist who reported the marketing abuses to authorities, will receive $26.6 million as part of the settlement.
"This is a standard industry practice," Franklin told The Associated Press in an interview. "Hopefully, real change will happen now, and this will be the start of something and not the end."
Under the agreement announced Thursday by federal prosecutors, the company acknowledged spending hundreds of thousands of dollars to promote non-approved uses for the anti-seizure drug Neurontin.
Pfizer will plead guilty to violating the Food, Drug and Cosmetic Act. Besides the $240 million criminal fine, the company will pay $152 million in civil fines to be shared among state and federal Medicaid agencies. Another $38 million would go to state consumer-protection agencies.
The company said the activity occurred years before it bought Warner-Lambert in 2000.
"Pfizer is committed to compliance with all healthcare laws and FDA requirements and to high ethical standards in all aspects of its business practices," the company said in a statement.
The case began in 1996, when Franklin filed a whistleblower lawsuit against drug maker Parke-Davis and its parent company Warner-Lambert, alleging it used an illegal marketing plan to drive up Neurontin sales in the 1990s.
The lawsuit alleged that while Neurontin was approved only as an epilepsy drug, the company promoted it for relieving pain, headaches, bipolar disorder and other psychiatric illnesses.
While doctors can prescribe drugs for any use, the promotion of drugs for these so-called "off-label uses" is prohibited by the Food and Drug Cosmetic Act.
Last May, federal prosecutors in Boston filed a brief in support of Franklin's lawsuit, and have since been in settlement negotiations with New York-based Pfizer to recover money the Medicaid program spent on Neurontin.
Franklin's lawsuit alleged that the company's publicity plan included paying doctors to put their names on ghostwritten articles about Neurontin and to induce them to prescribe the drug for various uses by giving them tickets to sporting events, trips to golf resorts and speakers fees. One doctor received almost $308,000 to speak at conferences about the drug.
Neurontin's sales soared from $97.5 million in 1995 to nearly $2.7 billion in 2003.
"We believe we have exposed an illegal practice in the pharmaceutical industry that caused the Medicaid program to pay tens of millions of dollars for off-label prescriptions that were not eligible for reimbursement under the Medicaid program," said Franklin's attorney, Thomas Greene.
Franklin, 42, said Warner-Lambert had conducted a clinical trial that showed Neurontin was less effective than a placebo for treating bipolar disorder, but it never published those findings and told doctors the drug was highly effective for treating the psychological condition.
"Patients every day are still taking this drug hoping it's effective, and there's really no evidence for that," Franklin said.