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Secretary of Health and Human Services, Kathleen Sibelius, announced
that pharmaceutical giant Pfizer will pay the largest fine ever levied for fraud.
Kathleen Sibelius, Secretary of Health and Human Services, announced today the largest fine ever levied for fraud in the Medicare and Medicaid programs.
Charges of fraud in marketing are becoming common against pharmaceutical companies. Almost every major drug manufacturer has been accused by the Justice Department of giving kick backs to doctors or changing Medicaid improper rates.
Sources at the Justice Department have become alarmed by the growing criminal behavior. Fines in the billions of dollars are being assessed against pharmaceutical giants. Prosecutors indicated that they may begin to charge individual doctors as well.
Pfizer will be required to pay a $1.3 billion criminal penalty in addition to a civil fine of $1 billion. The charges relate to the marketing of the painkiller, Bextra. Bextra, generic name valdecoxib, was marketed as relieving symptoms of osteoarthritis and rheumatoid arthritis in adults.
Bextra was withdrawn from the U.S. market in 2005 due to safety concerns including an increased risk of cardiovascular events like heart attack and stroke. Pfizer subsidiary, Pharmacia and Upjohn Company, will also plead guilty to violating the Food, Drug and Cosmetic Act for its promotion of Bextra.
Pfizer came under criticism for over marketing Bextra to many patients beyond those who would directly benefit. Through a practice called "off label" promotion the drug was marketed for uses beyond the formal uses approved by the FDA. While off label prescription by doctors is perfectly legal, pharmaceutical companies are not allowed to market for alternate uses.
The fact that the announcement was made at a news conference in Washington may suggest that the political environment for the pharmaceutical industry has become less welcoming despite the industry’s promise to save the government $80 billion as part of health care reform .
Pfizer’s fourth-quarter results issued on Monday made only a brief mention of the settlement. Most of the news from the company involved its $68 billion takeover of Wyeth. According to statements from the two companies, the takeover will result in the creation of the world's premier bio-pharmaceutical company.
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