China slaps Pfizer with $500,000 in Viagra penalties for pharmacy tie-up

Pfizer ($PFE) has no problem keeping sales for Viagra flying high in China, where brand awareness campaigns and changing attitudes toward sex have given it a sizable hold on the ED market. But the company has gotten in hot water for its efforts, as Chinese marketing authorities slapped Pfizer with a fine for paying local drugstores to promote its blockbuster ED med.

Between 2011 and 2013, Pfizer inked deals with four Shanghai pharmacies to display the drug, requiring the stores to feature Viagra as a recommended product and make sure that it was given a prominent position on prescription-drugs counters, China Daily reports. In some cases, the company paid nearly 930,000 yuan ($145,645) for the displays, violating China's drug management rules, regulators told the newspaper.

Now Chinese marketing authorities are asking Pfizer to fix the problem, fork over about 2.96 million yuan ($463,559) in alleged income and pay a 100,000 yuan ($15,655) fine, according to the China Daily story.

Pfizer partly blamed Chinese drugstores for the issue, saying that "due to some lapses in supervision, the display agreements were not executed accurately in these pharmacies," it wrote in a note to the newspaper. But the company also said it "took immediate action to investigate the matter and cooperated fully with Chinese authorities," and that it will accept the penalties imposed by Chinese marketing authorities.

"We deeply regret that certain conduct may have violated Pfizer's policies and the laws in China," the company said in its note to China Daily. "Pfizer regularly reviews our processes and we have already incorporated improvements in our policies and practices related to pharmacies, to ensure that we comply with all laws that apply to our business activities in China and throughout the world."

Pfizer enjoys standout sales for the med in China. Last year, sales of the product in the country increased 47% despite generic competition, according to IMS Health data cited by Bloomberg, offsetting declines in other international markets. And Viagra holds about two-thirds of the ED market in China, edging out competitors such as Eli Lilly's ($LLY) Cialis.

Pfizer partly has its education push to thank for that jump, as a series of awareness campaigns have increased brand recognition for the drug in China. Altogether, its educational efforts brought in 9 million media impressions in the country last year.

And Pfizer will need all the help it can get once generic competition for Viagra hits in the U.S. Pfizer has already struck deals with Teva Pharmaceutical ($TEVA) and Mylan ($MYL) to launch U.S. copycats of the drug. The company also faces generic competition in China and Europe, where Viagra is off patent.

- read the China Daily story

Special Reports: 10 big brands keep pumping out big bucks, with a little help from price hikes | Top 10 Pharma Advertising Budgets - 2012 - Pfizer

Suggested Articles

The future may be uncertain for AZ’s Imfinzi in first-line lung cancer, but its targeted med Tagrisso now boasts a green light in that setting.

Ultragenyx is back with another FDA nod, this time for Crysvita to treat X-linked hypophosphatemia in patients one year and older.

Roche got a two pieces of good Hemlibra news early this week—and what's good for Hemlibra must be good for Roche.