In 2009, Pfizer Inc., one of the largest pharmaceutical companies in the world, agreed to pay $2.3 billion to resolve criminal and civil charges relating to the illegal promotion of certain pharmaceutical products. This was one of the largest health care fraud settlements in U.S. history at the time. The charges stemmed from multiple off-label marketing and kickback allegations related to several Pfizer drugs, including Bextra, Geodon, Zyvox, and Lyrica.
Some key questions around Pfizer’s 2009 settlement include:
- What specific allegations led to the charges against Pfizer?
- What drugs were involved in the illegal promotions?
- How much did Pfizer agree to pay in the settlement and how was the money allocated?
- What other penalties or oversight resulted from the charges?
- What changes did Pfizer make after the settlement?
This 5000 word article will provide background on the 2009 Pfizer settlement and thoroughly answer these questions regarding the details of the charges, financial penalties, and outcome of the historic health care fraud case.
Allegations Against Pfizer
The allegations against Pfizer that led to the massive $2.3 billion settlement centered around the illegal promotion of several of the company’s pharmaceutical products:
Off-Label Promotion
The primary allegation was that Pfizer illegally promoted the drugs Bextra, Geodon, Zyvox, and Lyrica for uses that were not approved by the FDA, known as “off-label” promotion. This included marketing the drugs for unapproved uses and dosages. Off-label marketing can jeopardize patient safety, as the unapproved uses have not been verified as safe or effective. Pfizer was accused of continuing to push these off-label promotions even after being warned by the FDA to stop.
Kickbacks
In addition to off-label promotion, Pfizer was accused of paying kickbacks such as consulting fees and lavish entertainment to healthcare providers to encourage greater prescription volumes for their drugs. These kickbacks allegedly incentivized taking regulatory and safety risks on behalf of patients.
Misbranding
Pfizer was also charged with misbranding Bextra and Geodon by providing misleading information about their safety in marketing materials. Misleading promotion of a drug’s safety can lead to patient harm if not used appropriately.
Obstruction
Part of the settlement resolved charges that Pfizer obstructed an earlier 2002 investigation into off-label marketing of its arthritis drug Bextra. Pfizer initially denied any off-label promotions despite evidence to the contrary.
Drugs Involved in the Illegal Promotion
The Pfizer settlement covered off-label promotion, kickbacks, and other charges related to the following pharmaceutical products:
Bextra
Bextra (valdecoxib) was an anti-inflammatory COX-2 inhibitor medication originally approved for arthritis, menstrual cramps, and pain relief. Pfizer was accused of illegally promoting it for acute pain and surgical pain despite Bextra’s increased risks of heart attacks and strokes. Bextra was pulled from the U.S. market in 2005 due to these safety concerns.
Geodon
Geodon (ziprasidone HCl) is an antipsychotic approved for schizophrenia and acute manic/mixed episodes related to bipolar disorder. Pfizer was charged with promoting it for off-label conditions such as depression, ADHD, and dementia.
Zyvox
Zyvox (linezolid) is a powerful antibiotic approved for certain severe infections that are unresponsive to other antibiotics. Pfizer allegedly promoted Zyvox for improper off-label uses beyond the approved indications.
Lyrica
Lyrica (pregabalin) is an anti-epileptic drug used for epilepsy, neuropathic pain related to diabetes or herpes, and fibromyalgia. Pfizer illegally promoted Lyrica for various psychiatric conditions, pain conditions, and dosage strengths not approved by the FDA.
Settlement Payments and Allocation
To resolve the extensive charges related to the four drugs, Pfizer agreed to an historic settlement including the following fines, restitution, and resolution payments:
- $1.3 billion criminal fine to resolve charges, the largest criminal fine ever imposed in the U.S. at the time
- $1 billion civil settlement to resolve False Claims Act allegations and address losses to federal healthcare programs
- $301 million in restitution payments to Medicaid and other healthcare programs impacted by the off-label promotions
- $33 million payment to resolve kickback charges involving payments to doctors to promote Bextra
- $52 million to settle civil charges involving Geodon marketing aimed at pediatric uses and prescriptions in Massachusetts
In total, the resolution required Pfizer to pay $2.3 billion stemming from the various charges involving the different drugs. The Department of Justice described it as the largest civil and criminal settlement at that time related to healthcare fraud.
Penalties and Oversight in the Settlement
In addition to the massive financial payments, Pfizer had to accept various penalties and increased oversight as part of the 2009 settlement of charges:
- Pfizer entered into an expansive corporate integrity agreement with the Office of the Inspector General of the Department of Health and Human Services. This imposed procedures and reviews to avoid and detect future promotion violations.
- A related deferred prosecution agreement from the U.S. Attorney’s Office required Pfizer’s continued cooperation and implementation of compliance measures.
- Pfizer executive Marie McKeever had to pay a $75,000 penalty and accept exclusion from the federal healthcare programs for violating the False Claims Act anti-kickback statute.
These additions to the financial terms sought to engrain more ethical and compliant conduct throughout Pfizer’s marketing and sales operations. The massive fine also acted as a deterrent to prevent future repeated offenses by Pfizer or other pharmaceutical companies.
Aftermath and Changes Made by Pfizer
The enormous settlement spurred Pfizer to make major internal changes and reassess its sales and marketing practices going forward.
According to Pfizer, the company fully cooperated with the investigation and implemented changes even prior to the final 2009 settlement:
- Ended promotional programs and payments connected to the charges
- Stopped advertising Bextra and Geodon entirely for a period
- Implemented an enhanced compliance training program required for all employees
- Reorganized marketing leadership and reduced the sales force for certain drugs
- Took disciplinary action against certain employees involved in the allegations
Additional changes made in the wake of the settlement included:
- Created the role of Chief Compliance Officer
- Formed a Corporate Compliance Committee and compliance Governance Board
- Issued a new code of conduct with strict marketing and healthcare compliance provisions
- Expanded the compliance team and annual compliance program budget
- Voluntarily published Pfizer’s “Blue Book” policy report on ethical practices and transparency
The settlement marked a major turning point for Pfizer. While costly, it reinforced the importance of responsible corporate marketing and compliance for healthcare companies and pharmaceutical manufacturers. The case provides an example for the industry on properly disclosing drug risks and uses and avoiding improper kickbacks or off-label promotion.
Conclusion
Pfizer’s 2009 settlement for $2.3 billion was a landmark case for healthcare fraud enforcement in the U.S. The charges included extensive off-label promotion, kickbacks to doctors, and misbranding related to major Pfizer drugs like Bextra, Geodon, Zyvox, and Lyrica. Beyond the massive criminal and civil fines, the settlement imposed oversight and fundamentally changed Pfizer’s marketing compliance model. The case highlighted the legal and ethical pitfalls around pharmaceutical marketing and the need for drug makers to provide complete risk information to the public. While costly, it provided a lesson to the healthcare industry on the importance of responsible promotional practices and transparency around drug treatments.