Pfizer reaches $2.3 billion federal settlement

By Chris Rizo | Sep 2, 2009


WASHINGTON (Legal Newsline)-- Pfizer Inc. and a subsidiary have reached a $2.3 billion settlement Wednesday with the U.S. government over the pharmaceutical giant's now-withdrawn medication Bextra and other medications.

West Virginia was one of the states that will receive a portion of the settlement, but that amount was unclear at presstime.

The New York-based company agreed to the settlement to settle the claims it illegally marketed the anti-inflammatory painkiller and three other medications for uses that weren't approved by the U.S. Food and Drug Administration.

The other medications covered in the settlement are the anti-psychotic drug Geodon, the antibiotic drug Zyvox and the anti-epileptic drug Lyrica, the U.S. Justice Department said in a statement.

Under the agreement, Pfizer will pay a $1.3 billion criminal penalty and $1 billion in civil fines related to a number of medicines. The Pfizer unit Pharmacia and Upjohn Company will plead guilty to violating the Food, Drug and Cosmetic Act for its promotion of Bextra.

In 2005, Pfizer removed Bextra from the market because federal regulators concluded the medication's risks -- a rare but serious skin reaction -- outweighed its benefit.

The settlement also resolves allegations Pfizer paid kickbacks to physicians and other health care providers for them to prescribe drugs made by the company.

Pfizer said it will pay $33 million to 49 states and the District of Columbia to settle state civil claims related to its past promotional practices concerning Geodon.

The federal share of the civil settlement is $668 million and the state Medicaid share of the civil settlement is $331 million. Six whistleblowers will receive a total of more than $102 million from the federal share of the civil settlement, the statement said.

The Justice Department said Wednesday's agreement with Pfizer was its largest ever health care fraud settlement.

"This historic settlement will return nearly $1 billion to Medicare, Medicaid, and other government insurance programs, securing their future for the Americans who depend on these programs," said Secretary of Department of Health and Human Services Kathleen Sebelius.

"The Department of Health and Human Services will continue to seek opportunities to work with its government partners to prosecute fraud wherever we can find it. But we will also look for new ways to prevent fraud before it happens. Health care is too important to let a single dollar go to waste," she added.

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