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Pfizer Guilty, To Pay $430M

May 14, 2004 | AP

Pfizer Inc. will plead guilty to criminal charges and pay $430 million in fines to settle charges that a company it bought illegally promoted non-approved uses for a drug.

The settlement with the world's largest pharmaceutical company over Warner-Lambert, which Pfizer bought in 2000, includes a $240 million criminal fine the second-largest ever imposed in a health-care fraud prosecution, the Justice Department said. Pfizer also will pay $152 million in civil fines to be shared among state and federal Medicaid agencies. Another $38 million would go to state consumer-protection agencies.

Under the agreement announced Thursday by federal prosecutors, the company acknowledged spending hundreds of thousands of dollars to promote non-approved uses for the anti-seizure drug Neurontin. The company said the activity occurred years before it bought Warner-Lambert.

The case began in 1996, when scientist David Franklin filed a whistleblower lawsuit under the U.S. False Claims Act, which allows private citizens to sue on behalf of the government and receive a portion of awards in cases where companies are defrauding the government. Franklin will receive $26.6 million as part of the settlement.

Franklin's suit alleged that, to drive up sales in the 1990s, drug maker Parke-Davis and its parent company Warner-Lambert promoted the drug Neurontin for relieving pain, headaches, bipolar disorder and other psychiatric illnesses though it was approved only as an epilepsy drug. While doctors can prescribe drugs for any use, promoting drugs for so-called "off-label uses" is prohibited by the Food and Drug Cosmetic Act.

The lawsuit alleged the company's plan included paying doctors to put their names on ghostwritten articles about Neurontin and to induce them to prescribe the drug for various uses by giving them tickets to sporting events, trips to golf resorts and speakers fees.

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