Feds Seek to Change Drugmakers' Practices With Pfizer Settlement
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A record $2.3 billion settlement with Pfizer has reinforced the Obama administration’s stance on health-care fraud. Recently, “Pfizer unit Pharmacia & Upjohn pleaded guilty to a single felony charge that accused the company of marketing its anti-inflammatory drug Bextra for broader uses and higher dosages than those approved by the Food and Drug Administration.”
The investigation of Pfizer began four years ago when corporate insiders began to question the marketing practices that were being employed by the company in order to turn a profit. The methods used by Pfizer meant that employees were expected to “increase profits at all costs, even when sales meant endangering lives,” said John Kopchinksi, a Pfizer salesman from Florida. It was a group of employees, including Kopchinski, who called attention to the company’s illegal activity, which included bribing doctors into prescribing Bextra for conditions that it was not designed for, “[creating] sham requests for medical information as an excuse to send unsolicited advertising materials to physicians,” as well as writing articles to promote their product without disclosing the fact that they had a hand in preparing the promotional materials.
Pharmacia and Upjohn will pay $1.3 billion in fines and forfeiture and an additional $1 billion to state and federal authorities to “resolve civil allegations of improper marketing over Bextra and three more drugs,” with the former payment being the largest criminal penalty ever imposed in the U.S., according to prosecutors. The other drugs in question were: “Geodon, an antipsychotic medicine; Zyvox, an antibiotic; and Lyrica, an epilepsy medicine.”
The Pfizer settlement is one step in a long-term goal, with federal agencies more focused than ever on targeting and taking action against wrongdoing drugmakers in the health-care industry. In addition to the Pfizer settlement, the “task force” deployed by the Justice and Health and Human Services departments have been issuing indictments on smaller companies over the past several months for “[bilking] Medicare and Medicaid out of hundreds of millions of dollars through schemes involving wheelchairs, medical equipment and costly HIV/AIDS treatments.” With the Pfizer settlement, “the Justice Department’s civil division…has pledged to devote more attention to whistleblowers at drug companies and insurance firms who flag improper payments and marketing schemes.”
According to the acting U.S. attorney in Massachusetts, Mike Loucks, Pfizer, the world’s largest drugmaker, “has entered into four settlements with the Justice Department over the last decade.” With Bextra being voluntarily removed from the market in 2005 over its role in “strokes, heart attacks and blood clots in the lungs,” Health and Human services Secretary Kathleen Sebelius said scrutiny on the company will be heightened.
Despite the settlement, concerns grow that it will not be enough to sway drug companies from their “bad behavior.” With the pharmaceutical industry being one of the most profitable in the country (raking in close to $50 billion last year), Sidney Wolfe, director of Public Citizen’s Health Research Group notes: “The ever-escalating fines are unlikely to stop drug companies from continuing to bribe doctors because they represent just a fraction of drug company profits and no one has gone to jail.”