PHM-Exch> Pfizer to pay penalty

[Claudio Schuftan]

From: Gopal Dabade drdabade at gmail.com

http://news.yahoo.com/s/ap/20090903/ap_on_go_ca_st_pe/us_pfizer_settlement



Pfizer to pay record $2.3B penalty for drug promos

By DEVLIN BARRETT, Associated Press Writer Devlin Barrett, Associated Press
Writer Wed Sep 2, 9:19 pm ET



WASHINGTON – Federal prosecutors hit Pfizer Inc. with a record-breaking $2.3
billion in fines Wednesday and called the world's largest drugmaker a
repeating corporate cheat for illegal drug promotions that plied doctors
with free golf, massages, and resort junkets.

Announcing the penalty as a warning to all drug manufacturers, Justice
Department officials said the overall settlement is the largest ever paid by
a drug company for alleged violations of federal drug rules, and the $1.2
billion criminal fine is the largest ever in any U.S. criminal case. The
total includes $1 billion in civil penalties and a $100 million criminal
forfeiture.

Authorities called Pfizer a repeat offender, noting it is the company's
fourth such settlement of government charges in the last decade. The
allegations surround the marketing of 13 different drugs, including big
sellers such as Viagra, Zoloft, and Lipitor.

As part of its illegal marketing, Pfizer invited doctors to consultant
meetings at resort locations, paying their expenses and providing perks,
prosecutors said.

“They were entertained with golf, massages, and other activities,” said Mike
Loucks, the U.S. attorney in Massachusetts. Loucks said that even as Pfizer
was negotiating deals on past misconduct, they were continuing to violate
the very same laws with other drugs.

To prevent backsliding this time, Pfizer's conduct will be specially
monitored by the Health and Human Service Department inspector general for
five years.

In an unusual twist, the head of the Justice Department, Attorney General
Eric Holder, did not participate in the record settlement, because he had
represented Pfizer on these issues while in private practice.

Associate Attorney General Thomas Perrelli said the settlement illustrates
ways the Justice Department "can help the American public at a time when
budgets are tight and health care costs are rising."

Perrelli announced the settlement terms at a news conference with federal
prosecutors and FBI, and Health and Human Services Department officials.

The settlement ends an investigation that also resulted in guilty pleas from
two former Pfizer sales managers.

Officials said the U.S. industry has paid out more than $11 billion in such
settlements over the past decade, but one consumer advocate voiced hope that
Wednesday's penalty was so big it would curb the abuses.

“There's so much money in selling pills, that there's a tremendous
temptation to cheat,” said Bill Vaughan, an analyst at Consumers Union, the
nonprofit publisher of Consumer Reports.

“There's a kind of mentality in this sector that (settlements) are the cost
of doing business and we can cheat. This penalty is so huge I think
consumers can have some hope that maybe these guys will tighten up and run a
better ship.”

The government said the company promoted four prescription drugs, including
the pain killer Bextra, as treatments for medical conditions different from
those the drugs had been approved for by federal regulators. Authorities
said Pfizer's salesmen and women created phony doctor requests for medical
information in order to send unsolicited information to doctors about
unapproved uses and dosages.

Use of drugs for so-called “off-label" medical conditions is not uncommon,
but drug manufacturers are prohibited from marketing drugs for uses that
have not been approved by the Food and Drug Administration. They said the
junkets and other company-paid perks were designed to promote Bextra and
other drugs, to doctors for unapproved uses and dosages, backed by false and
misleading claims about safety and effectiveness.
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