Amid the all the numbers in Pfizer's ($PFE) third-quarter earnings announcement, the drugmaker disclosed one particularly newsworthy figure: A $491 million charge for a Rapamune marketing settlement. As Dow Jones first reported, the company made a deal with the U.S. Justice Department to resolve the longstanding probe, which Pfizer inherited when it bought Wyeth in 2009.
The drugmaker had faced allegations that Wyeth pushed Rapamune for unapproved uses--and that it used kickbacks to persuade doctors. In 2010, the feds joined a whistleblower case, filed by two former Wyeth salespeople, claiming that the company not only touted the organ-transplant drug for off-label use, but specifically targeted hospitals that mostly treated African-Americans, despite higher risks in those patients.
At the time, Pfizer said it welcomed the government's involvement in that case. "[W]e believe its doing so will allow for a more orderly process and efficient conclusion" of the lawsuit and the federal probe, the company said. After all, the alleged misconduct didn't extend past 2007, Pfizer pointed out, two years before it bought Wyeth.
Pfizer says it's committed to marketing Rapamune according to its FDA-approved label. And as Dow Jones notes, the company also says the transplant drug was "never contraindicated" for African-American patients or "or other high-risk populations."
Wyeth's legacy may be to blame here, but Pfizer is no stranger to off-label marketing settlements. It agreed to pay $2.3 billion in criminal and civil penalties to settle off-label marketing allegations involving Bextra and a handful of other drugs. That settlement includes the biggest criminal penalty in a drug-marketing case. The latest deal is, obviously, less than one-fifth of that previous settlement, and it's not big enough to qualify for FiercePharma's Top 11 Marketing Settlements list.
The settlement hit Pfizer's earnings, of course. Without the charge and some other one-time items, EPS came in at 53 cents. Including those items, earnings amounted to 43 cents per share.
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Special Report: Pharma's Top 11 Marketing Settlements