In 2005, the U.S. Food and Drug Administration warned Pfizer Inc. that its ads touting the antibiotic Zyvox as superior to similar drugs could endanger public health.
It continued to tell doctors that Zyvox worked better than cheaper generic competitors and that it was effective for various types of infections, including those that occur after surgery, even though there was no scientific evidence to support such use.
For a time, the company even promoted Zyvox for use against types of bacteria against which the drug had little or no effect.
Those were among allegations unsealed yesterday as Pfizer agreed to pay $2.3 billion to the federal government for illegally promoting Zyvox, the painkiller Bextra, epilepsy and nerve pain drug Lyrica, and the antipsychotic Geodon.
The fine, which had been expected, was the largest ever paid by a drug company for defrauding the government's Medicare and Medicaid programs.
The U.S. Justice Department said that it included the largest criminal fine in U.S. history - $1.2 billion.
Authorities called Pfizer a repeat offender, noting this is the fourth such settlement of government charges in the last decade. The government said it would monitor the company's conduct for the next five years to rein in the abuses.
Lawyers from the Philadelphia U.S. Attorney's Office were part of the federal team that prosecuted the case. Six whistle-blowers, several of them represented by area lawyers, will receive a combined $102 million for helping the government.
Harrisburg psychiatrist Stefan Kruszewski will get $29 million of that total for his testimony. He said Pfizer sales representatives pushed him to prescribe Geodon for such symptoms as anxiety and agitation and for use in children. The FDA had approved Geodon only to treat schizophrenia and bipolar disorder in adults.
"Pfizer targeted pediatrics and adolescents to expand off-label use and maintained on its payroll an army of more than 250 child psychiatrists nationwide," said Plymouth Meeting lawyer Brian Kenney, who, along with Tavy Deming, represented Kruszewski.
Pfizer said it denied the allegations that it promoted Geodon for unapproved uses.
Lawyers Jim Pepper, Steve Sheller, and Brian McCormick of Sheller P.C. in Center City, who represented Ronald Rainero, a Pfizer employee who also blew the whistle, said the off-label promotions helped push Zyvox sales to more than $1 billion.
"Ultimately, does off-label marketing work?" Pepper said. "The answer is yes."
The government said the company promoted the four prescription drugs for uses different from those approved by federal regulators.
Doctors often prescribe drugs for so-called "off-label" medical conditions, but companies can market drugs only for uses approved by the Food and Drug Administration.
Sheller said the government needed to tighten rules around off-label prescriptions. While an off-label use is sometimes appropriate, he said, it occurs too often and usually without patient knowledge.
"The public are guinea pigs, and we're not told," Sheller said.
To promote the drugs, authorities said Pfizer invited doctors to consultant meetings at resort locations, paying their expenses and providing perks.
Neil Fishman, an infectious-diseases doctor at the Hospital of the University of Pennsylvania, said many medical centers and schools, including his, had cracked down on gifts and payments from drug companies to doctors to try to lessen industry influence.
Fishman said Zyvox was the right drug in some situations, but he also said Pfizer's marketing overstated the antibiotic's benefits and underplayed potential problems.
"There are other drugs that can do the same job for less money," he said.
FBI Assistant Director Kevin Perkins praised the whistle-blowers who decided to "speak out against a corporate giant that was blatantly violating the law and misleading the public through false marketing claims."
Bextra, one of a class of painkillers known as COX-2 inhibitors, was pulled from the U.S. market in 2005 amid mounting evidence it raised the risk of heart attack, stroke, and death.
A Pfizer subsidiary, Pharmacia & Upjohn Inc., which was acquired in 2003, has entered an agreement to plead guilty to one count of felony misbranding. The criminal case applied only to Bextra.
The $1 billion in civil penalties was related to Bextra and a number of other medicines.
A portion of the penalties will be distributed to 49 states and the District of Columbia, including $14 million to Pennsylvania and $13 million to New Jersey.
"We regret certain actions taken in the past, but are proud of the action we've taken to strengthen our internal controls and pioneer new procedures so that we not only comply with state and federal laws, but also meet the high standards that patients, physicians, and the public expect from a leading worldwide company dedicated to healing and better health," said Amy W. Schulman, senior vice president and general counsel of Pfizer.
Pfizer said the agreement with the Justice Department resolved the investigation into promotion of all those drugs, plus several related whistle-blower lawsuits.
When Pfizer originally disclosed the settlement figure, it also announced plans to acquire rival Wyeth for $68 billion. That deal, which would bolster Pfizer's position as the world's top drugmaker by revenue, is expected to close before year's end. Wyeth is based in Madison, N.J., but employs several thousand people in Collegeville.
Repeat Offender: Previous Pfizer Settlements
April 2007: Pfizer agreed to pay $34.7 million in fines to settle Department of Justice allegations that it improperly promoted the human growth hormone product Genotropin. The drugmaker's Pharmacia & Upjohn Co. subsidiary pleaded guilty to offering a kickback to a pharmacy-benefits manager to sell more of the drug.
May 2004: Pfizer agreed to pay $430 million to settle DOJ claims involving the off-label promotion of the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions included flying doctors to lavish resorts and paying them hefty speakers' fees to tout the drug. The company said the activity took place years before it bought Warner-Lambert in 2000.
October 2002: Pfizer and subsidiaries Warner-Lambert and Parke-Davis agreed to pay
$49 million to settle allegations that the company fraudulently avoided paying fully rebates owed to the state and federal governments under the national Medicaid Rebate program for the cholesterol-lowering drug Lipitor.
SOURCE: Staff research