Corporate Compliance

Pfizer to pay $2.3 billion for largest healthcare fraud settlement in history

Compliance Monitor, September 9, 2009


Pharmaceutical giant Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. will pay $2.3 million for the largest healthcare fraud settlement in the history of the Department of Justice (DOJ). According to a DOJ press release, Pfizer has agreed to pay a fee of $2.3 billion to amend criminal and civil liabilities arising from the illegal promotion of four medications – Bextra, an anti-inflammatory drug; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug.

Pfizer submitted false claims about the prescriptions to government healthcare programs that were either not accepted or covered. The provisions of the FDA state that a company must specify the intended uses of a product and products may not be marketed for any non-listed uses.

Six whistleblowers spurred the investigation by filing lawsuits under the qui tam provisions of the False Claims Act and will receive compensation totaling more than $102 million. Part of the $2.3 billion settlement will resolve allegations that Pfizer supplied kickbacks to healthcare providers to persuade them to prescribe these drugs.

The individual criminal fine of $1.195 billion is the greatest criminal fine ever procured in the United States for any matter. Kathleen Sebelius, Secretary of the Department of Health and Human Services estimates that nearly $1 billion will be allocated to Medicare, Medicaid, and other government insurance programs.

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