Pfizer admits fraud in marketing drugs and is fined $2.3 billion dollars

If you are wondering why pharmaceuticals are adding so much to the cost of health care, take a look at Pfizer.  For the fourth time since 2002, the company or one of its subsidiaries has agreed to settle criminal or civil charges arising out of its improper marketing of a drug.  Previously it was Lipitor, Neurontin and Genotropin.  This time it is Bextra and three other medications which Pfizer was promoting to doctors for uses not authorized by the Food and Drug Administration.  Bextra has since been pulled off the market by Pfizer after serious safety concerns were raised.

The FDA approves drugs for a particular, researched use and cannot be marketed for any other, different or broader use.  Physicians remain free to use the drug for non-approved uses, however, and Pfizer has consistently broken the law to coax or bribe doctors to use its medications for purposes not approved by the FDA.  The four-year investigation of Pfizer and Bextra included whistleblower claims by Pfizer employees in three states and uncovered a range of illegal behavior including kickbacks to doctors who prescribe Viagra or Lipitor.

Pfizer earned $48.3 billion dollars in 2008, alone, so even this enormous fine and penalty does not really address the profits that a big pharmaceutical company can engineer through illegal activity.  It can cover the penalty through 4th quarter profits, alone.  The other illegally promoted products included in this settlement include Geodon, Zyvox and Lyrica and Pfizer must also pay tens of millions to resolve 42 state actions alleging illegal behavior.  A Pfizer subsidiary, Pharmacia Upjohn, plead guilty to felony misbranding of a drug and will pay an additional $100 million dollar forfeiture, according to Bloomberg.com.

The settlement includes a "corporate integrity agreement" (why is that starting to sound like an oxymoron in the United States?) pursuant to which Pfizer must notify doctors of the settlement and create a mechanism for doctors to report future illegal behavior by Pfizer.  Pfizer will also be required to document at least some payments to doctors.  The Pentagon Defense Criminal Investigative Service was apparently a key player in this investigation, using the Civil War-era False Claims Act to investigate payments made to satisfy medical claims of military dependents.