Pfizer Inc. to Pay $2.3 Billion in Historic Settlement

BALTIMORE, MD ( September 2, 2009) - Attorney General Douglas F. Gansler today announced that Maryland has joined with other states and the federal government and reached agreement with Pfizer Inc to settle civil and criminal allegations that Pfizer and its subsidiaries paid kickbacks and engaged in off-labeling marketing campaigns that improperly promoted numerous drugs that Pfizer manufactures. This is the largest settlement in history in a health care fraud matter. Pfizer will pay the states and the federal government a total of $1 billion in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct.

In addition, Pharmacia & Upjohn Company, Inc., a Pfizer subsidiary, has agreed to plead guilty to a felony violation of the Food, Drug, and Cosmetic Act (FDCA) and to pay a criminal fine and forfeiture of $1.3 billion. The violation centers on the illegal marketing and promotion of Bextra, an anti-inflammatory drug that Pfizer pulled from the market in 2005. As a result of the illegal promotion, Pharmacia & Upjohn Company, Inc. has agreed to plead guilty to a felony violation of the FDCA for misbranding the drug with the intent to defraud or mislead.

The government entities alleged that Pfizer, the largest pharmaceutical manufacturer in the world, engaged in a pattern of unlawful marketing activity to promote multiple drugs for certain uses which the Food and Drug Administration (FDA) had not approved. While it is not illegal for a physician to prescribe a drug for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA. This promotional activity included:

• Marketing Bextra for conditions and dosages other than those for which it was approved;
• Promoting the use of the antipsychotic drug Geodon for a variety of off-label conditions such as attention deficit disorder, autism, dementia and depression for patients that included children and adolescents;
• Selling the pain medication Lyrica for unapproved conditions;
• Making false representations about the safety and efficacy of Zyvox, an antibiotic only approved to treat certain drug resistant infections.

In addition to the improper off-label marketing of these drugs, Pfizer is alleged to have paid illegal remuneration to health care professionals to induce them to promote and prescribe Bextra, Geodon, Lyrica, Zyvox, Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax,
Zoloft and Zyrtec. These payments allegedly took many forms, including entertainment, cash, travel and meals. Federal law prohibits payment of anything of value in exchange for the prescribing of a product paid for by a federal health care program.

As a condition of the settlement, Pfizer will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

This settlement is based on 9 qui tam cases that were filed in the United States District Court for the District of Massachusetts, the United States District Court for the Eastern District of Pennsylvania and the United States District Court for the Eastern District of Kentucky by private individuals who filed actions under state and federal false claims statutes. As part of the settlement, Maryland will receive in $4,975,451 in restitution and other recovery.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Pfizer on behalf of the settling states. Team members included representatives from the Offices of the Attorneys General for the states of Massachusetts, Oregon, Ohio, New York, Virginia, Texas and Arkansas.