Pfizer pays for fraudulent activities

Pfizer’s trademarked tagline ‘Pfizer Inc: Working together for a healthier world’ may not have been entirely accurate in view of the company’s recent US*$2.3 billion health care fraud settlement.

The company was found to have illegally promoted four drugs as treatments for conditions different to those which regulators had approved and a subsidiary of the firm pleaded guilty to misbranding drugs "with the intent to defraud or mislead".

Under the agreement with the US Department of Justice (DOJ), Pfizer will pay a total of $2.3 billion ($1.0 billion in civil payments related to a number of medicines and a $1.3 billion criminal penalty related only to Bextra) and a Pfizer subsidiary, Pharmacia & Upjohn Company, will plead guilty to one criminal count of violating the US Food, Drug, and Cosmetic Act related to its past promotion of Bextra. A portion of the civil payments will be distributed to 49 states and the District of Columbia, pursuant to agreements with each state’s Medicaid division.

The civil settlement also relates to allegations that Pfizer paid bribes and offered lavish hospitality to health care providers to encourage them to prescribe four of the company's drugs. These were Bextra, an anti-inflammatory drug, Geodon, an anti-psychotic drug, Zyvox, an antibiotic and Lyrica, an epilepsy treatment.

Pfizer has finalised a previously reported agreement in principle with the DOJ to settle an investigation regarding past off-label promotional practices related to Bextra, which Pfizer voluntarily withdrew from the market in 2005. The final agreement also resolves other DOJ investigations involving alleged past off-label promotional practices concerning Zyvox, Geodon and Lyrica, allegations related to certain payments to healthcare professionals involving these and nine other Pfizer medicines and several related qui tam actions.

The terms of the DOJ settlement require Pfizer to pay approximately $503 million to resolve civil allegations concerning past promotional practices related to Bextra. In addition, the company will make payments to resolve other civil allegations involving past promotional practices as follows: approximately $301 million for Geodon, approximately $98 million for Zyvox and approximately $50 million for Lyrica. The settlement also includes a civil payment of approximately $48 million to resolve allegations relating to certain payments to healthcare professionals involving nine other Pfizer medicines.

As part of the DOJ settlement, Pfizer has entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the US Department of Health and Human Services. The CIA institutes certain new measures and requires Pfizer to continue maintenance of a corporate compliance program for a period of five years.

Pfizer’s existing compliance program includes a dedicated chief compliance officer, corporate compliance committee, code of conduct, extensive compliance training, policies and procedures regarding the appropriate promotion of Pfizer’s products, auditing and monitoring, a compliance hotline and extensive procedures to investigate and remediate potential issues of noncompliance with company policy or applicable legal requirements. Pursuant to the CIA, Pfizer will engage an Independent Review Organization (IRO) that will help the company assess and evaluate its promotional and product-related business functions.

The CIA memorialises additional voluntary initiatives that reflect the company’s efforts toward greater transparency such as Pfizer’s plan, announced in February 2009, to disclose publicly its financial relationships with physicians, medical organisations and patient advocacy groups, including investigators who conduct clinical research. Pfizer is the first biopharmaceutical company to commit to reporting payments for conducting Phase I-IV clinical trials in addition to disclosing payments for speaking and consulting. Although Pfizer was subject to a prior CIA, it has consistently and voluntarily strengthened its compliance program beyond those requirements, including enhancements to the company’s comprehensive product risk assessment and mitigation process and compliance monitoring operations.

*All references to dollars are US dollars.