It was March 2010 when Pfizer ($PFE) first lost its bid to escape a $142 million racketeering verdict, with a federal jury ruling the company's marketing of epilepsy treatment Neurontin violated both federal and state law. Now, nearly four years later, Pfizer's appeal process has come to the end of the line. The Supreme Court has refused to hear the drugmaker's appeal, leaving the verdict intact and the door open for similar claims to proceed.
Chalk up a win for Kaiser Foundation Health Plan, a health maintenance organization that claimed Pfizer's marketing damaged it and its affiliates, as it shelled out for scripts relating to conditions Neurontin was not cleared to--and did not effectively--treat. As Reuters notes, Aetna Inc. and Harden Manufacturing Corp. also are free to go forward with their own claims, which a lower court had previously dismissed.
Pfizer first faced penalties for Neurontin marketing in 2004, when it wrapped a $430 million settlement with the feds comprising both civil and criminal fines. A Massachusetts court found that Pfizer marketed the drug for unapproved uses like migraines and bipolar disorder; sales for those and other off-label uses accounted for 94% of the drug's $2.3 billion in 2002 sales, court documents attest.
As Reuters notes, considering the drug's haul and Pfizer's $50 billion in yearly sales, an extra $142 million is but a slap on the wrist for the company. Government settlements totaling in the billions haven't stopped some Big Pharma players from landing on the repeat offender list for their underhanded marketing practices.
Pfizer itself followed up its Neurontin agreement with a $2.3 billion settlement in 2009 involving Bextra and three other drugs; that settlement included a $1.2 billion criminal fine, the largest ever in an off-label case. And just this year, the company agreed to pay another $491 million to wrap up allegations that its subsidiary Wyeth, purchased in 2009, mismarketed the transplant drug Rapamune.
What's more worrisome for Pfizer and other drugmakers on the marketing-violations list is that this decision might embolden other insurers to sue. In the past, the Department of Justice has taken the lead on holding companies accountable for impure marketing tactics, but as Morningstar analyst Damien Conover told Reuters, that could begin to change with Kaiser's win. "I'm a little concerned these litigation trends could spread more widely to private entities," he said.
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