|New York Attorney General Eric Schneiderman|
Pfizer ($PFE) has cleared the decks of a marketing scandal that it inherited with its 2009 acquisition of Wyeth. The New York drugmaker will pay $35 million to 41 states and the District of Columbia to settle a case accusing it of pushing a kidney transplant drug for off-label uses. The states' settlement comes a year after Pfizer agreed to pay nearly half a billion dollars to clear similar accusations with the feds.
According to New York Attorney General Eric Schneiderman, who led the probe, Wyeth got doctors to push the drug for unapproved uses, relying on "misleading presentations of data." The Justice Department last year also accused the company of training sales reps to hype Rapamune for unapproved uses and paid bonuses to persuade them to flog the drug for patients it wasn't cleared to treat. According to Reuters, Pfizer earned $350 million off of Rapamune last year.
"There has to be one set of rules for everyone, no matter how rich or powerful, and that includes big pharmaceutical companies that make unapproved and unsubstantiated claims about products in order to boost profits," Schneiderman said in a statement.
In addition to the fine, Pfizer agreed to 7 prohibitions going forward, including that it will not promote "any FDA-approved prescription drug or biological product" in the U.S. for an off-label use.
In a statement the company pointed out that the practices at issue occurred before Pfizer bought Wyeth and that the company self reported the matter to authorities. "Pfizer and its subsidiaries take compliance very seriously and the company is committed to ensuring that its promotional practices meet or exceed all legal requirements and the expectations of the people we serve."
Pfizer and Wyeth did not admit any wrongdoing or liability in the agreement, but that wasn't the situation last year in the federal settlement. Under that agreement, Pfizer's Wyeth unit pleaded guilty to a criminal misbranding violation under the Food, Drug and Cosmetics Act and agreed to a criminal fine of $157.58 million, as well as an asset forfeiture amounting to $76 million. Civil payments to the government and states added another $257.4 million to tally $490.9 million.
While the Rapamune settlement is one that Pfizer can say was part of the Wyeth legacy and not its own, it is not as if Pfizer has never been accused of similar conduct. In 2004, Pfizer inked a $430 million settlement with the feds for its off-label promotions of the seizure drug Neurontin. Then in 2009, it agreed to a $2.3 billion settlement, including $1.3 billion in criminal penalties, for its promotions of Bextra, Geodon, Zyvox and Lyrica. Among other things, the government alleged it rewarded sales reps with junkets and cash for pushing Bextra as a multipurpose pain reliever when it was approved for arthritis pain. The drug, which sold about $1.4 billion in 2004, was pulled from the market in 2005. At the time, it was the largest healthcare fraud settlement.
Special Report: Pharma's Top 11 Marketing Settlements - Pfizer - Bextra, Geodon, Zyvox and Lyrica