Pfizer to pay $2.3 billion settlement

September 2, 2009 

Pfizer will pay a record $2.3 billion penalty to settle an investigation into illegal prescription drug promotions.

The settlement with the Justice Department includes a $1.2 billion criminal fine, the largest in U.S. history.

The case involves Pfizer's promotion of the painkiller Bexra and other medicines. Authorities said Pfizer's sales representatives created phony doctor requests for medical information in order to send unsolicited information to doctors about unapproved uses and dosages.

The world's largest drug company wined and dined doctors and sent them on exotic trips to induce them to prescribe its drugs including the impotence treatment Viagra and cholesterol medicine Lipitor, they said.

“Combating health care fraud is one of this administration's top priorities,” Associate Attorney General Thomas Perelli said in announcing the settlement. He said it illustrates ways the department “can help the American public at a time when budgets are tight and health care costs are rising.”

The overall settlement is the largest ever paid by a drug company for alleged violations of federal drug rules.

“This is a significant opportunity because it allows Pfizer to return its attention to the things that really should matter most to a biopharmaceutical company, which is the practice of developing innovative medications and bringing them to market in an appropriate fashion,” said Pfizer general counsel Amy W. Schulman in a statement.

The company disclosed in January that it expected to pay $2.3 billion. Pfizer's stock fell 16 cents to $16.22 in midday trading, and is down 15 percent in the past year.

Use of drugs for so-called “off-label” medical conditions is not uncommon, but drug manufacturers are prohibited from marketing drugs for uses that have not been approved by the Food and Drug Administration.

Of the civil penalty, $977,444 will go to North Carolina to resolve allegations that it improperly marketed the antipsychotic drug Geodon, Attorney General Roy Cooper said.

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