Pfizer settles for record-breaking $2.3B

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Pfizer had to cough up $2.3 billion in September, as part of a fraud settlement to resolve criminal and civil liability charges arising from the illegal promotion of certain pharmaceutical products.

That eye-popping figure – the biggest ever for fraudulent drug promotion—belies other conditions of the settlement with significant implications for Pfizer and the rest of the pharma industry going forward. On top of the $2.3 billion, Pfizer had to enter into a corporate integrity agreement (CIA) with the Office of Inspector General of the Department of Health and Human Services.

As part of the settlement, Pfizer subsidiary, Pharmacia & Upjohn, agreed to plead guilty to a felony violation of the FD&C Act for misbranding Bextra with the intent to defraud or mislead. Pfizer promoted Bextra for several uses and dosages that the FDA did not approve due to safety concerns. Pfizer will pay a criminal fine of $1.195 billion. Pharmacia & Upjohn will forfeit $105 million for a total criminal resolution of $1.3 billion. Pfizer will also pay $1 billion to resolve civil False Claims Act charges that the company illegally promoted Bextra, Geodon, Zyvox and Lyrica and caused false claims to be submitted to government programs for off-label uses. According to the Department of Justice, the civil settlement also resolves allegations that Pfizer paid kickbacks to healthcare providers to induce them to prescribe these, as well as other, drugs. The federal share of the civil settlement is $668,514,830 and the state Medicaid share of the civil settlement is $331,485,170.

The first reporting period for the CIA goes into effect Dec. 31, 2010. The CIA among other things requires Pfizer to: establish a comprehensive Field Force Monitoring Program (FFMP) to evaluate and monitor field sales representatives' interactions with healthcare professionals.

The FFMP must also include: a Speaker Monitoring Program; direct field observations of field sales representatives; and the monitoring and review of other records relating to field sales representatives' interactions with HCPs. In addition, Pfizer must maintain a program through which it provides legal and compliance support to field sales representatives, including through the placement of attorneys directly in the field.

As a component of the FFMP, Pfizer field-based attorneys or other compliance/legal personnel shall conduct observations of field sales representatives to assess whether the messages delivered and materials distributed to HCPs are consistent with applicable legal requirements and with Pfizer's Policies and Procedures.

The CIA states that these observations must be full day ride-alongs with field sales representatives and each Observation shall consist of directly observing all meetings between a sales representative and HCPs during the workday.

Pfizer is required to develop a monitoring program for the following types of activities that are initiated, budgeted and handled from Pfizer headquarters including: consulting arrangements; publication activities; and medical education grants and health care related charitable contributions.

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