Settlement amount: $2.3 billion
Drugs: Bextra, Geodon, Zyvox and Lyrica
Pfizer's 2009 settlement with the Justice Department wasn't the first to top $1 billion. But this very different kind of blockbuster was at the time--and remains, at least for now--the biggest healthcare fraud settlement ever. The $1.3 billion in criminal penalties also set a record.
There's a reason for that: In 2004, Pfizer's ($PFE) Warner-Lambert unit settled similar claims about its Neurontin marketing for $430 million. The company also signed a corporate integrity agreement, a more-or-less standard piece of these government settlements. Details vary, but the one common feature is a promise to never do it again. And Pfizer had done it again, the Justice Department said.
"[A]t the very same time Pfizer was in our offices negotiating and resolving the allegations of criminal conduct by its then newly acquired subsidiary, Warner-Lambert, Pfizer was itself in its other operations violating those very same laws," U.S. Attorney Michael Loucks said in announcing the deal.
The Justice Department detailed a variety of marketing infractions. For instance, sales reps were rewarded with junkets and cash for pushing Bextra as a multi-purpose pain reliever when it was approved for arthritis pain. "Sales employees explained that off-label promotion was tolerated and no big deal, even though they knew it was illegal," government lawyers said in a sentencing memo. Two of those employees ended up with criminal penalties of their own; one now-former sales manager was sentenced to six months of home confinement with an electronic ankle bracelet.
We'd be remiss if we didn't put the settlement in some kind of Pfizer-sized context. Bextra was withdrawn in 2005 after its fellow Cox-2 inhibitor, Vioxx. The previous year it had racked up $1.4 billion in sales. Geodon, an antipsychotic, topped $1 billion in 2008 after several years above the $500 million mark. The antibiotic Zyvox brought in more than $1 billion in 2008, too, on top of more than $3 billion for the 7 previous years. Lyrica, an epilepsy and pain drug, also beat $1 billion in 2008, and it continues to grow.