Improper arm-twisting or simple settlement talks? You decide. In an investigative piece published this weekend, the New York Times fingered Pfizer ($PFE) lawyers for wining, dining and otherwise influencing an attorney general to get a favorable lawsuit settlement. Pfizer says the back-and-forth was all aboveboard and part of routine legal negotiations.
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| Missouri Attorney General Chris Koster |
The NYT dug into emails it obtained via open records requests, finding that Pfizer lawyers--in-house and outside counsel--cozied up to Missouri Attorney General Chris Koster while negotiating a settlement deal. Missouri had opted out of a multistate off-label marketing suit.
Before that opt-out, Pfizer had backed Koster's election campaigns, and donated even bigger money to the Democratic Attorneys General Association, which gave money to Koster's election efforts, the NYT notes. Koster blamed the state's opting-out on a missed filing deadline. As settlement negotiations wore on, Pfizer flew Koster in to speak at a breakfast for its political action committee. Topic: The importance of building productive relationships with AGs.
"As you know, these relationships are important to allow AGs and corporations to work together to address important public policy issues," Pfizer's law firm Dickstein Shapiro wrote in an email to the deputy AG (as quoted by the Times). "The conference participants also would like to hear how these relationships can help to efficiently address AGs' questions or concerns before they escalate into major problems (like multistate investigations or litigation), as well as how they can carry over when AGs are elected to higher offices."
In a letter to the editor published Sunday, Pfizer EVP and general counsel Douglas Lankler said that the paper's coverage "casts Pfizer's conversations with the Missouri attorney general in a negative light by implying that the company engaged in inappropriate conduct rather than in common negotiations" to resolve a pending case.
"It is in the public interest for parties involved in legal disputes to engage directly with state attorneys general to explore fair and efficient resolutions ... which is what occurred in this case," Lankler wrote.
You don't have to know much about Big Pharma's relationship with the Justice Department and various state AGs to realize that Pfizer and its rivals have been involved in a plethora of "multistate investigations" in recent years. Off-label marketing and kickback settlements with the feds and state AGs have ranged into the billions.
Pfizer's big off-label settlement--$2.3 billion, covering a range of drugs including the now-withdrawn painkiller Bextra--wrapped up in 2009. At the end of 2012, the company settled another round of allegations with a group of 33 states. That's the group Missouri opted not to join.
According to the NYT, Pfizer ended up with a $750,000 settlement with Missouri, $350,000 less than the state might have collected under that multistate agreement. Oregon, another state that went solo with the allegations, won a $3.4 million settlement deal, the Times notes.
Pressing politicians for help is nothing new, of course. Pfizer may have found itself on the losing end of one recent lobbying effort. When Pfizer was pursuing a tax-inversion deal with AstraZeneca ($AZN) earlier this year, the U.K.-based drugmaker reportedly hired some financiers close to the White House to plead its case. Later, amid public pressure, the Obama administration rolled out rules designed to limit the tax-friendly deals. But now that the midterm elections have put Republicans in control of Congress, the influence may sway in the opposite direction.
- read Pfizer's letter to the editor
- read the NYT story (sub. req.)
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