Pfizer’s record fraud settlement

PA doctor played a role in the investigation that led to a $2.3 billion settlement, and states will benefit.

A Harrisburg psychiatrist was a whistleblower in the health fraud case against the world’s largest pharmaceutical company. Pfizer will pay a record $2.3 billion in civil and criminal penalties in a settlement over improper prescription drug marketing. (Kerry Grens also contributed to this report)

Listen: [audio:090902tepfizer.mp3]

Psychiatrist Stefan Kruszewski uncovered Pfizer promotional materials and shared them with federal investigators. His attorney Brian Kenney says Pfizer sales representatives marketed the drug Geodon to his client for a variety of off-label uses, including dementia and depression. But the antipsychotic is only approved for a limited number of conditions. Doctors have leeway to prescribe a medicine for unapproved conditions, but pharmaceutical companies are barred from promoting their drugs for off-label uses.

Kenney: One way they tried to evade the FDA regulation prohibiting them from marketing off-label, is to pay speakers, doctors to talks about their own experiences. And if those experiences included off-label uses, Pfizer’s view, I think was, so be it.

States will get a piece of the settlment. Pennsylvania is receiving more than $14 million, New Jersey about $13 million and Delaware nearly $1 million. Pennsylvania Attorney General spokesman Nils Frederiksen says the money will refund states for reimbursing unneccessary prescriptions through medicaid.

Frederiksen: The belief being that this unfair marketing, this off-label marketing and also the other allegations caused these drugs to be used more often, so tax dollars were used on more occasions to pay for these prescriptions.
Frederiksen says most of the money will go directly to the state’s Medicaid program. Another portion will go toward consumer protection and education.

The settlement breaks a record for a health fraud case. It could also be the next step for the company in acquiring local pharmaceutical firm Wyeth. Les Funtleyder is a healthcare strategist at the trading company Miller Tabak. He says the companies had anticipated the settlement.

Funtleyder: From where I sit it would appear that this is just one more hurdle the company needed to clear to close the merger. So to the extent that it has any impact on the deal, it probably encourages the deal.

Pfizer and other companies have made multi-million dollar settlements in the past over unfair marketing allegations. Funtleyder says the industry is likely not to change its behavior based on this case.