Pfizer takes $2.3 billion hit

Pfizer will pay $2.3 billion to settle the investigation with the US Department of Justice regarding the off-label promotion of Bextra. In a statement, Pfizer explained that: "the final agreement also resolves other Department of Justice investigations involving alleged past off-label promotional practices concerning Zyvox, Geodon and Lyrica, allegations related to certain payments to healthcare professionals involving these and nine other Pfizer medicines, and several qui tam (whistleblower) actions."

The investigation began in 2003 when Pfizer sales representative John Kopchinski, who is also a Gulf War veteran, filed a whistleblower lawsuit, which the government later joined.

"In the army, I was expected to protect people at all costs," Kopchinski said in a statement from the law firm Phillips & Cohen LLP. "At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn't do that."

Kopchinski alleged that Pfizer promoted Bextra "for uses and in doses that far exceeded what the FDA had approved". Doctors were also encouraged to prescribe and endorse the drug for off-label uses, according to the lawsuit.

"Even though the FDA rejected Pfizer's applications to sell Bextra for certain uses because of serious health risks, Pfizer had the gall to push those uses anyway using misleading information," Erika A. Kelton, a lawyer with Phillips & Cohen, said in the law firm's statement. "Ignoring serious health risks to increase sales is outrageous."

Bextra was first approved by the FDA in 2001. However, Pfizer voluntarily withdrew the drug in 2005 at the requests of the FDA and European regulators. Bextra belongs to the same class of drugs as Merck's Vioxx — Cox-2 inhibitors. The cardiovascular risks associated with Bextra could not be differentiated from other non-steroidal anti-inflammatory drugs; the main concern was the increased risk of serious skin reactions, which were already described on the label. At the time of the withdrawal, Pfizer issued a statement (via PR Newswire) saying that it "respectfully disagrees with the FDA's position position regarding the overall risk/benefit profile of Bextra". However, the company still voluntarily suspended sales.

Kopchinski, who was fired from Pfizer in 2003, has been awarded more than $50 million. He will also receive another reward under the US's false claims laws, which rewards whistleblowers that expose company wrongdoings.

Meanwhile, Pfizer is left to pay $2.3 billion, which it disclosed in January 2009 when the company announced its Q4 and full year results for 2008. According to Pfizer, the amount will comprise "$1 billion in civil payments relating to a number of medicines, and a $1.3 billion criminal penalty related only to Bextra".

And that's not the end, as additional payments will also be made to resolve civil allegations regarding past promotional practices of Bextra, as well as Geodon, Zyvix and Lyrica. A payment of approximately $48 million will also be made to resolve allegations regarding payments to healthcare professionals involving other Pfizer medicines.

"Pfizer expressly denies all of these civil allegations, with the exception that Pfizer acknowledges certain improper actions related to the promotion of Zyvox," said the Pfizer statement.

Amy W. Schulman, Pfizer's Senior Vice President and General Counsel, added that the company regrets certain past actions, but is also "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".

www.pfizer.com