Back in January, Pfizer set aside $2.3 billion to settle a Justice Department investigation. Word was that it dealt with improper Bextra marketing. But the reality is that, while Bextra infractions headline the deal, it also involves several other drugs, including the psychiatric drug Geodon, the zntibiotic Zyvox, and the epilepsy remedy Lyrica. And the most impressive thing about the settlement isn't just its size, but the fact that a whopping $1.3 billion of it is a criminal penalty. Pfizer will pay the criminal fine, but it's the pharma giant's subsidiary, Pharmacia & Upjohn, that will plead guilty to a charge of felony misbranding.
The marketing infractions are familiar to anyone who follows pharma: Touting Bextra for off-label usages and higher-than-approved doses. Promoting the drug using ghostwritten journal articles that never disclosed the company's role. Marketing to doctors via expensive junkets. In fact, some of them are familiar from previous Pfizer settlements with the government. For instance, its $430 million settlement over Neurontin mismarketing.
That Neurontin settlement also included a corporate integrity agreement, a we'll-be-good promise that amounts to a gentle form of corporate parole. And apparently, it was this repeat-offender pattern that inspired the Justice Department to whack Pfizer with such a big fine. "Among the factors we considered in calibrating this severe punishment was Pfizer's recidivism," acting U.S. Attorney Michael Loucks said (as quoted in the New York Times). The deal comes with a new-and-improved integrity agreement that Pfizer pledges to adhere to this time.
The deal was announced with much fanfare, and not just because the Obama administration wants to look tough on healthcare fraud these days. It's also because HHS and Justice want to send a message to the rest of pharma. The Justice Department's civil division has said it's devoting more attention to drug company whistleblowers, for instance. And it was whistleblowers who first brought the Bextra charges to light; together, the four tipsters will collect $102 million off the settlement.
Updated 9/3 1:40p EST - Story corrected to denote Pharmacia & Upjohn Company as the Pfizer subsidiary pleading guilty to the felony charge.