Fund sues Pfizer board over off-label marketing

A union pension fund is suing Pfizer (NYSE: PFE) and its board, alleging that directors ignored signs that the drugmaker was playing fast and loose with off-label marketing. The fund blames the board, in part, for that record-setting $2.3 billion marketing settlement with the Justice Department.

"The fact that Pfizer has been operated with a systematic disregard for the laws governing its fundamental business was not hidden from the board," the suit claims (as quoted by Bloomberg), "which repeatedly and knowingly disregarded red flags that clearly demonstrated the company's wrongdoing." The lawsuit asks the court to hold Pfizer's directors liable for the company's misdeeds and aims to collect "all profits, benefits and other compensation" they received as board members. Pfizer spokesman Chris Loder didn't return Bloomberg's calls or e-mail for comment on the suit.

Pfizer is hardly alone in settling claims of off-label marketing, nor is it alone in paying a criminal fine as part of a settlement (through subsidiary Pharmacia & Upjohn, in Pfizer's case). And that's just the problem, some pharma observers are saying. A U.S. attorney in Philadelphia went so far as to write a newspaper op-ed scolding drugmakers for their marketing infractions--and promising more enforcement if they don't change their ways.

But with the settlements amounting to a small fraction of a blockbuster drug's sales, some say that government fines and restitution isn't enough of a deterrent. Executives themselves should be on the hook for rule-breaking, or so the theory goes. And some Blue Cross Blue Shield organizations have taken that strategy, naming Pfizer executives personally in a recent suit over off-label Bextra marketing. Will this new personal approach become a trend?

- read the Bloomberg story