Pfizer Dodges Fraud Prosecution AGAIN By Paying Over $1 Billion Fine

Pfizer Dodges Fraud Prosecution AGAIN By Paying HUGE Government

Fine

If it were you or I or your neighbor down the street you can
bet that NO presecutor on the planet would “look the other way” to avoid
prosecution. But, when it involves the lergest drug company on the planet they
seem to be able to do just that and do it VERY WELL!!!
So, before going into the amazing facts in this most recent
case let me give you a reminder of the last big case involving a large fine for
off label marketing with Pfizer‘s Neurontin. After learning that Pfizer sales
reps had been drastically increasing profits by pushing Neurontin for off label
uses for several years felony charges were filed against the company for
doing so. (Keep in mind that this drug now carries warnings of increases in
suicide.) In 2004 they plead guilty to two felonies and agreed to pay $430
Million in fines as well. See the first article below as a quick
overview.
Now they have a whole new twist when it comes to approaching
similar charges with the off label prescribing of Bextra (Pfizer‘s version of
Vioxx) which was pulled from the market just the following year after pleading
guilty to the two felonies in the Neurontin case and paying the largest fine
ever for such a practice. Pfizer acquired a smaller drug company
called Pharmacia and they wanted to market Bextra for surgical pain.
When the FDA put their foot down and clearly said, “NO because of safety
issues,” Pfizer and Pharmacia went right ahead with their marketing campaign. So
when caught red handed in doing this, the prosecutor decides that Pharmacia can
plead guilty so that Pfizer is off the hook because it would have put them out
of business!!!!!

I quote from the article below: “So Pfizer and the feds cut a deal. Instead
of charging Pfizer with a crime, prosecutors would charge a Pfizer subsidiary,
Pharmacia & Upjohn Co. Inc.

“The CNN Special Investigation found that the subsidiary is nothing more than
a shell company whose only function is to plead guilty.”

As it turned out ONE HALF of their $1.7 Billion in profits on Bextra came
from off label prescribing and the government fine for that will be
the biggest ever once again. This time the figure is $1.2 Billion plus an
additional $1 Billion to settle a batch of civil suits (how many deaths those
involved is not mentioned) and denied wrongdoing in another dozen
similar charges involving illegal promotions!

“It paid nearly $1.2 billion in a criminal fine for Bextra, the largest fine
the federal government has ever collected.

“It paid a billion dollars more to settle a batch of civil suits — although
it denied wrongdoing — on allegations that it illegally promoted 12 other
drugs.”

This begins to make one wonder just how far we will get with changes in
government policy when they have learned how to extract such large sums of money
from these drug companies in the way of fines. Why are those fines not
distributed to those who were damaged by the off label prescribing?

Ann Blake-Tracy, Executive Director
International Coalition for Drug Awareness
Author: Prozac: Panacea or Pandora? – Our Serotonin
Nightmare & Help! I Can’t Get Off My
Antidepresant!

http://articles.sfgate.com/2004-05-14/business/17426572_1_neurontin-pfizer-fda

Huge penalty in drug fraud / Pfizer settles felony case in Neurontin
off-label promotion

May
14, 2004
|By Bernadette Tansey,
Chronicle Staff Writer

A division of Pfizer Inc., the world’s largest drugmaker, has agreed to plead
guilty to two felonies and pay $430 million in penalties to settle charges that
it fraudulently promoted the drug Neurontin for a string of unapproved uses.

In an agreement announced by government prosecutors Thursday, Pfizer unit
Warner-Lambert admitted that it aggressively marketed the epilepsy drug by

illicit means for unrelated conditions including bipolar disorder, pain,
migraine headaches, and drug and alcohol withdrawal.

A company whistle-blower, whose 1996 civil suit spurred
government investigations of Neurontin’s marketing campaign, will receive about
$26.6 million through the settlement under legal provisions that reward citizens
for helping to recover government money obtained by fraud.

The settlement includes $152 million to pay back amounts spent on Neurontin
by the federal Medicare program and 50 state Medicaid programs for the poor. In
addition, Pfizer will pay a $240 million criminal fine, the second-largest such

fine ever imposed in a health care fraud prosecution, the Department of Justice
said.

Prosecutors said Warner-Lambert turned Neurontin into a blockbuster drug with
tactics like paying doctors to listen to pitches for unapproved uses and
treating them to luxury trips to Hawaii, Florida or the 1996 Olympics in
Atlanta. One doctor received almost $308,000 to tout Neurontin at conferences.

“This illegal and fraudulent promotion scheme corrupted the information
process relied on by doctors in their medical decision making, thereby putting
patients at risk,” said U.S. Attorney Michael Sullivan, chief prosecutor for the
federal district based in Boston.

Doctors are free to prescribe drugs for uses not specified on their FDA-
approved labels, but the FDA forbids drug companies from promoting them for
those off-label uses. Prosecutors said Neurontin’s manufacturers decided not to
seek an expanded FDA label for the drug, an expensive process requiring solid
proof from clinical trials. Instead, the company boosted sales through
aggressive promotional strategies, even when scientific studies had demonstrated
that it was not effective, the Justice Department said.

The tactics included planting company operatives in the audience at medical
education events to contradict unfavorable comments about Neurontin, and paying
doctors to allow sales representatives to sit in on patient visits, prosecutors
said.

Feds found Pfizer too big to nail

Submitted by Drew Kaplan on April 22, 2010 – 11:39 amOne Comment

Imagine being charged with a crime, but an imaginary friend takes the rap for
you. That is essentially what happened when Pfizer, the world’s largest
pharmaceutical company, was caught illegally marketing Bextra, a painkiller that
was taken off the market in 2005 because of safety concerns. When the criminal case was announced last fall, federal
officials touted their prosecution as a model for tough, effective enforcement.
“It sends a clear message” to the pharmaceutical industry, said Kevin Perkins,
assistant director of the FBI’s Criminal Investigative Division.

But beyond the fanfare, a CNN Special Investigation found another story, one
that officials downplayed when they declared victory. It’s a story about the
power major pharmaceutical companies have even when they break the laws intended
to protect patients.

Big plans for Bextra

The story begins in 2001, when Bextra was about to hit the market. The drug
was part of a revolutionary class of painkillers known as Cox-2 inhibitors that
were supposed to be safer than generic drugs, but at 20 times the price of
ibuprofen.

Pfizer and its marketing partner, Pharmacia, planned to sell Bextra as a
treatment for acute pain, the kind you have after surgery.

But in November 2001, the U.S. Food and Drug Administration said Bextra was
not safe for patients at high risk of heart attacks and strokes.

The FDA approved Bextra only for arthritis and menstrual cramps. It rejected
the drug in higher doses for acute, surgical pain.

Promoting drugs for unapproved uses can put patients at risk by circumventing
the FDA’s judgment over which products are safe and effective. For that reason,
“off-label” promotion is against the law.

If we prosecute Pfizer … a lot of the people who work for the company who
haven’t engaged in criminal activity would get hurt.

–Mike Loucks, federal prosecutor But with billions of dollars of profits at
stake, marketing and sales managers across the country nonetheless targeted
anesthesiologists, foot surgeons, orthopedic surgeons and oral surgeons. “Anyone
that use[d] a scalpel for a living,” one district manager advised in a document
prosecutors would later cite.

A manager in Florida e-mailed his sales reps a scripted sales pitch that
claimed — falsely — that the FDA had given Bextra “a clean bill of health” all
the way up to a 40 mg dose, which is twice what the FDA actually said was
safe.

Doctors as pitchmen

Internal company documents show that Pfizer and Pharmacia (which Pfizer later
bought) used a multimillion-dollar medical education budget to pay hundreds of
doctors as speakers and consultants to tout Bextra.

Pfizer said in court that “the company’s intent was pure”: to foster a legal
exchange of scientific information among doctors.

But an internal marketing plan called for training physicians “to serve as
public relations spokespeople.”

According to Lewis Morris, chief counsel to the inspector general at the U.S.
Department of Health and Human Services, “They pushed the envelope so far past
any reasonable interpretation of the law that it’s simply outrageous.”

Pfizer’s chief compliance officer, Doug Lanker, said that “in a large sales
force, successful sales techniques spread quickly,” but that top Pfizer
executives were not aware of the “significant mis-promotion issue with Bextra”
until federal prosecutors began to show them the evidence.

By April 2005, when Bextra was taken off the market, more than half of its

$1.7 billion in profits had come from prescriptions written for uses the FDA had
rejected.

Too big to nail

But when it came to prosecuting Pfizer for its fraudulent marketing, the
pharmaceutical giant had a trump card: Just as the giant banks on Wall Street
were deemed too big to fail, Pfizer was considered too big to nail.

Why? Because any company convicted of a major health care fraud is
automatically excluded from Medicare and Medicaid. Convicting Pfizer on Bextra
would prevent the company from billing federal health programs for any of its
products. It would be a corporate death sentence.

Prosecutors said that excluding Pfizer would most likely lead to Pfizer’s
collapse, with collateral consequences: disrupting the flow of Pfizer products
to Medicare and Medicaid recipients, causing the loss of jobs including those of
Pfizer employees who were not involved in the fraud, and causing significant
losses for Pfizer shareholders.

“We have to ask whether by excluding the company [from Medicare and
Medicaid], are we harming our patients,” said Lewis Morris of the Department of
Health and Human Services.

So Pfizer and the feds cut a deal. Instead of charging Pfizer with a crime,
prosecutors would charge a Pfizer subsidiary, Pharmacia & Upjohn Co.
Inc.

The CNN Special Investigation found that the subsidiary is nothing more than
a shell company whose only function is to plead guilty.

According to court documents, Pfizer Inc. owns (a) Pharmacia Corp., which
owns (b) Pharmacia & Upjohn LLC, which owns (c) Pharmacia & Upjohn Co.
LLC, which in turn owns (d) Pharmacia & Upjohn Co. Inc. It is the
great-great-grandson of the parent company.

Public records show that the subsidiary was incorporated in Delaware on March
27, 2007, the same day Pfizer lawyers and federal prosecutors agreed that the
company would plead guilty in a kickback case against a company Pfizer had
acquired a few years earlier.

As a result, Pharmacia & Upjohn Co. Inc., the subsidiary, was excluded
from Medicare without ever having sold so much as a single pill. And Pfizer was
free to sell its products to federally funded health programs.

An imaginary friend

I can tell you, unequivocally, that Pfizer perceived the Bextra matter as an
incredibly serious one.

Two years later, with Bextra, the shell company once again pleaded guilty. It
was, in effect, Pfizer’s imaginary friend stepping up to take the rap.

“It is true that if a company is created to take a criminal plea, but it’s
just a shell, the impact of an exclusion is minimal or nonexistent,” Morris
said.

Prosecutors say there was no viable alternative.

“If we prosecute Pfizer, they get excluded,” said Mike Loucks, the federal
prosecutor who oversaw the investigation. “A lot of the people who work for the
company who haven’t engaged in criminal activity would get hurt.”

Did the punishment fit the crime? Pfizer says yes.

It paid nearly $1.2 billion in a criminal fine for Bextra, the largest fine

the federal government has ever collected.

It paid a billion dollars more to settle a batch of civil suits — although it
denied wrongdoing — on allegations that it illegally promoted 12 other
drugs.

In all, Pfizer lost the equivalent of three months’ profit.

It maintained its ability to do business with the federal government.

Pfizer says it takes responsibility for the illegal promotion of Bextra. “I
can tell you, unequivocally, that Pfizer perceived the Bextra matter as an
incredibly serious one,” said Doug Lankler, Pfizer’s chief compliance
officer.

To prevent it from happening again, Pfizer has set up what it calls
“leading-edge” systems to spot signs of illegal promotion by closely monitoring
sales reps and tracking prescription sales.

It’s not entirely voluntary. Pfizer had to sign a corporate integrity
agreement with the Department of Health and Human Services. For the next five
years, it requires Pfizer to disclose future payments to doctors and top
executives to sign off personally that the company is obeying the law.

Pfizer says the company has learned its lesson.

But after years of overseeing similar cases against other major drug
companies, even Loucks, isn’t sure $2 billion in penalties is a deterrent when
the profits from illegal promotion can be so large.

“I worry that the money is so great,” he said, that dealing with the
Department of Justice may be “just of a cost of doing business.”

http://www.cnn.com/2010/HEALTH/04/02/pfizer.bextra/index.html?hpt=T2

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Glaxo Said to Have Paid $1 Billion So Far to Settle Various Paxil Lawsuits

NOTE FROM Ann Blake-Tracy:

Excellent article! Many would still be alive and many more
would have avoided being damaged had they been able to see this coming as
clearly as I did years ago when I began warning about these drugs. But it is not
over! There will tragically be many more losses due to the ability of drug
manufacturers to buy the silence this doctor from Tufts says below should
not happen. These settlements need to be made public!

The one glaring omission in this article is a case I am very
familiar with Tobin vs Glaxo. This Paxil-induced murder/suicide
case was allowed to go to court, rather than being settled by Glaxo.
And after hearing all the evidence the jury ruled
that it was clear that Paxil was the main cause of this tragic
murder/suicide that cost 4 lives in one WY family. They ordered Glaxo to pay
$6.3 Million – in my opinion a very small amount for four lives!

But it will not be the end of these types of cases being filed.
The authors did not figure the losses Glaxo will face from those cases
of murder/suicide so their losses could be far greater than detailed
below.

Ann Blake-Tracy, Executive Director
International Coalition for Drug Awareness
Author: Prozac: Panacea or Pandora? – Our Serotonin
Nightmare & Help! I Can’t Get Off My Antidepresant!

The company hasn’t specified in regulatory filings
the number of suicide, birth-defect and addiction cases settled.

“It’s important to disclose such settlements because
it raises the red flag for both doctors and patients that there might be a
problem,” said Dan Carlat, a psychiatrist at Tufts University School of Medicine
in Boston who writes and edits a
blog and a monthly

Psychiatry
Report
. “It would motivate
doctors to dig into the literature even more before prescribing these
drugs.”

  • About 450 suicide-related Paxil cases were settled. Only about a dozen
    haven’t been, the people said. The $1 billion total doesn’t include more than
    600 claims that Paxil caused birth defects.
  • A Philadelphia jury on Oct. 13 found the drugmaker should pay $2.5 million
    to the family of Lyam Kilker, a 3-year-old boy born with a heart defect after
    his mother took Paxil while pregnant. Based on that outcome, an analyst
    estimated the company may potentially face additional verdicts in birth-defect
    cases waiting to be tried in Pennsylvania.
  • 600 More Cases
  • “A liability totaling $1.5 billion is possible,” wrote Savvas Neophytou, a
    Panmure Gordon analyst in London, in a note to investors the day after the
    Kilker verdict.
  • In comparison, Pfizer Inc., parent of Wyeth, the maker of diet-drug
    combination fen-phen, has had to set aside about $21 billion to resolve about
    200,000 personal-injury claims over that medicine. Merck & Co. agreed to
    pay $4.85 billion to resolve more than 48,000 claims over the withdrawn
    painkiller.
  • Harris Pogust, an
    attorney for Paxil plaintiffs, couldn’t confirm the total. He said the amounts
    are confidential.
  • The suicide settlements included a suit over the death of a 14-year-old
    boy who had been taking Paxil for two months. The parents of Scott Cunningham,
    of Valparaiso, Indiana, sued after the boy hung himself in 2001. They alleged
    Glaxo suppressed evidence that Paxil use was linked to the risk of suicide
    attempts by adolescents. Glaxo denied the allegations, according to court
    papers.
  • The family settled its suit in May, according to court filings. Family
    attorney Bijan Esfandiari confirmed the settlement, saying the amount was
    confidential.
  • About 150 cases over suicides by Paxil users were settled for an average
    of about $2 million, and about 300 over suicide attempts settled for an
    average of $300,000, they said. Some of the claims were resolved before suits
    were filed, according to the people familiar with the matter.
  • Glaxo has settled about 10 birth-defect cases, Sean Tracey, a
    Houston-based lawyer who represented the family of a child victim, said in
    court Dec. 2. The settlements averaged about $4 million, the people familiar
    with the cases said.
  • Glaxo paid an average of about $50,000 per case to resolve about 3,200
    claims linking Paxil to addiction problems, the people familiar with the cases
    said.
  • In its 2008 annual report, company officials noted they had reached a
    “conditional settlement agreement” in January 2006 with Paxil users who
    alleged they suffered withdrawal symptoms after taking the drug. The case,
    filed in Los Angeles federal court, was marked closed in court records in
    February.
Glaxo Said to Have Paid $1 Billion to Settle Paxil

Lawsuits

By Jef Feeley and Margaret Cronin Fisk

Dec. 14 (Bloomberg) — GlaxoSmithKline Plc has
paid almost $1 billion to resolve lawsuits over Paxil since it introduced the
antidepressant in 1993, including about $390 million for suicides or attempted
suicides said to be linked to the drug, according to court records and people
familiar with the cases.

As part of the total, Glaxo, the U.K.’s largest drugmaker, so far has paid
$200 million to settle Paxil addiction and birth-defect cases and $400 million

to end antitrust, fraud and design claims, according to the people and court
records.

The $1 billion “would be worse than many people are expecting,” said Navid Malik, an analyst
at Matrix Corporate Capital in London. “I don’t think this is within the
boundaries of current assumptions for analysts.”

The London-based company hasn’t disclosed the settlement total in company
filings. It has made public some accords. Glaxo’s provision for legal and other
non-tax disputes as of the end of 2008 was 1.9 billion pounds ($3.09 billion),
according to its latest annual report. This included all legal matters, not just
Paxil. The company said 112 million pounds of this sum would be “reimbursed by
third-party issuers.”

The drugmaker has reduced its insurance coverage to contain costs, “accepting
a greater degree of uninsured exposure,” the annual report states. “Recent
insurance loss experience, including pharmaceutical product-liability exposures,
has increased the cost of, and narrowed the coverage afforded by, insurance for
pharmaceutical companies generally,” Glaxo said.

Glaxo Comment

Glaxo declined to confirm the $1 billion figure. “Paxil has been on the
market in the U.S. since 1993. Like many other pharmaceutical products, it has
been the subject of different kinds of litigation over the years,” said Sarah Alspach, a
spokeswoman for Glaxo, in an e-mailed statement. “It would be inappropriate and
potentially misleading to aggregate payments in these various types of
litigation.”

Chief Executive Officer Andrew Witty has moved
to replace revenue lost to generic versions of drugs such as Paxil. Worldwide,
Paxil generated about 514 million pounds in sales last year, or 2.1 percent of
the total. Glaxo closed up 5 pence to 1,303 pence in London trading Dec. 11,
down 8.8 percent from a year ago.

About 450 suicide-related Paxil cases were settled. Only about a dozen
haven’t been, the people said. The $1 billion total doesn’t include more than
600 claims that Paxil caused birth defects.

A Philadelphia jury on Oct. 13 found the drugmaker should pay $2.5 million to

the family of Lyam Kilker, a 3-year-old boy born with a heart defect after his
mother took Paxil while pregnant. Based on that outcome, an analyst estimated
the company may potentially face additional verdicts in birth-defect cases
waiting to be tried in Pennsylvania.

600 More Cases

“A liability totaling $1.5 billion is possible,” wrote Savvas Neophytou, a
Panmure Gordon analyst in London, in a note to investors the day after the
Kilker verdict. He still recommended buying Glaxo shares because a likely appeal
may reduce the amount paid by the company.

In comparison, Pfizer Inc., parent of Wyeth, the maker of diet-drug
combination fen-phen, has had to set aside about $21 billion to resolve about
200,000 personal-injury claims over that medicine. Merck & Co. agreed to pay
$4.85 billion to resolve more than 48,000 claims over the withdrawn painkiller.

Harris Pogust, an
attorney for Paxil plaintiffs, couldn’t confirm the total. He said the amounts
are confidential.

Paxil Is Different

Paxil’s been different from most drugs,” said Pogust, a lawyer from
Conshohocken, Pennsylvania, who is handling suicide and withdrawal cases.
“You’ve had three major personal injury litigations over one drug — the
suicide, the birth defect and the withdrawal cases. To have three significant
problems with one drug is really unusual.”

The company had $11.7 billion in U.S. Paxil sales for nine years starting in
1997, according to documents made public this year in a Pennsylvania trial. In
2002, the year before Paxil faced generic competition in the U.S., sales of the
drug there were $2.12 billion. Last year, U.S. sales had fallen to $129 million.
Through September of this year, sales were $52 million, down 52 percent from the
same period in 2008.

Since at least 2003, Glaxo has faced claims in U.S. courts that some Paxil
users were subjected to an undisclosed, higher risk for suicide and birth
defects.

A Suicide Settlement

The suicide settlements included a suit over the death of a 14-year-old boy
who had been taking Paxil for two months. The parents of Scott Cunningham, of
Valparaiso, Indiana, sued after the boy hung himself in 2001. They alleged Glaxo

suppressed evidence that Paxil use was linked to the risk of suicide attempts by
adolescents. Glaxo denied the allegations, according to court papers.

The family settled its suit in May, according to court filings. Family
attorney Bijan Esfandiari confirmed the settlement, saying the amount was
confidential.

About 150 cases over suicides by Paxil users were settled for an average of
about $2 million, and about 300 over suicide attempts settled for an average of
$300,000, they said. Some of the claims were resolved before suits were filed,
according to the people familiar with the matter.

Glaxo has settled about 10 birth-defect cases, Sean Tracey, a Houston-based
lawyer who represented the family of a child victim, said in court Dec. 2. The
settlements averaged about $4 million, the people familiar with the cases said.

Hasn’t Specified

The company hasn’t specified in regulatory filings the number of suicide,
birth-defect and addiction cases settled.

“It’s important to disclose such settlements because it raises the red flag
for both doctors and patients that there might be a problem,” said Dan Carlat, a
psychiatrist at Tufts University School of Medicine in Boston who writes and
edits a blog and a monthly Psychiatry Report. “It would motivate doctors to dig into the
literature even more before prescribing these drugs.”

Glaxo paid an average of about $50,000 per case to resolve about 3,200 claims
linking Paxil to addiction problems, the people familiar with the cases said.

In its 2008 annual report, company officials noted they had reached a
“conditional settlement agreement” in January 2006 with Paxil users who alleged
they suffered withdrawal symptoms after taking the drug. The case, filed in Los
Angeles federal court, was marked closed in court records in February.

Glaxo did not admit liability” in the addiction settlements, the company’s
officials said in a March 2009 filing with the U.S. Securities and Exchange
Commission.

The Other $400 Million

In one of eight accords unrelated to individual suicide, addiction or
birth-defect claims, Glaxo agreed in 2003 to pay $87.6 million to the U.S. and
49 states over claims it repackaged and privately labeled Paxil and another
drug, Flonase, to a health maintenance organization at discounted prices.

Glaxo, denying liability, agreed in 2004 to pay $165 million to settle two
antitrust suits over allegations it engaged in sham patent infringement
litigation to stall approval of generic versions of the drug, court records
show. Of that total, $100 million was for direct purchasers of Paxil, such as
drug wholesalers, and $65 million was for indirect buyers, the records show.

In the same year, Glaxo agreed to pay $2.5 million to New York to resolve
accusations the company withheld safety data about the antidepressant. The
company, calling the claims unfounded, agreed to release safety studies on the
medicine’s effect on children.

In 2005, the company added a black-box warning to its Paxil label that the
drug increased the risk of suicidal thoughts among adolescents, following a
request by the U.S. Food and Drug Administration to do so.

The Philadelphia case is Kilker v. SmithKline Beecham Corp. dba
GlaxoSmithKline, 07-001813, Court of Common Pleas, Philadelphia County,
Pennsylvania (Philadelphia).

To contact the reporters on this story: Jef Feeley in
Wilmington, Delaware, at jfeeley@bloomberg.net and; Margaret Cronin Fisk in
Southfield, Michigan, at mcfisk@bloomberg.net.

Last Updated:
December 14, 2009 00:01 EST

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