In a settlement worked out between Pfizer and the United States Justice Department, the pharmaceutical company agreed to plead guilty to charges it illegally promoted non-approved uses for its anti-epilepsy drug Neurontin and pay $430 million in fines.
The government alleged that Warner-Lambert Corp., purchased by Pfizer in 2000, flew doctors to resorts and paid them huge fees to tout and prescribe the drug as a pain reliever, a cure for bipolar disorder, other psychiatric disorders and Lou Gherig’s Disease when there was no indication the medicine had any effect at all on any of those maladies.
Neurontin’s sales had climbed from $97.5 million in 1995, when the false advertising began, to nearly $2.7 billion by 2003.
The settlement includes a $240 million criminal fine, the second-largest criminal fine imposed in a health-care fraud prosecution, according to the Justice Department. This illegal and fraudulent promotion scheme corrupted the information process relied upon by doctors in their medical decision-making, thereby putting patients at risk, Michael Sullivan, U.S. Attorney in Boston, Mass., said in a prepared statement.
David Franklin, the whistleblower in the case and a scientist in the Boston-based Parke-Davis division of Warner Lambert, reported the marketing abuses to authorities. He will receive $24.6 million as part of the settlement.
Franklin told the Associated Press what Pfizer did was standard operating procedure in the pharmaceutical business.
Under an agreement with prosecutors, Pfizer agreed to plead guilty to two counts of violating the Food, Drug and Cosmetic Act and pay a $240 million criminal fine.
Pfizer will also pay $152 million in civil damages for losses incurred by the Medicaid program and $38 million as part of a settlement with 50 state attorneys general.
New Jersey will receive $1.8 million, with $1.55 million going to its Medicaid program and the remainder to the Division of Consumer Affairs.
Pfizer spokesman Paul Fitzhenry blamed the violations on the Warner Lambert pre-buyout and said the advertising began eight years ago, well before Pfizer bought the company.
He added those practices are banned by the company’s current ethics policy.
â€œPfizer is committed to compliance with all health-care laws and FDA requirements and to high ethical standards in all aspects of its business practices, the company said in a statement.
The case began in 1996, when Franklin filed a lawsuit against drug maker Parke-Davis, saying it used an illegal marketing plan to drive up Neurontin sales.
Franklin’s lawsuit alleged the company’s publicity plan included paying doctors to sign off on ghostwritten articles about Neurontin and to prescribe the drug for various uses. The company offered the doctors trips to Florida, the 1996 Atlanta Olympics and Hawaii.
According to the Justice Department, one doctor received close to $308,000 to speak at conferences about the drug.
Neurontin was shown to be less effective than a placebo for treating bipolar disorder, but the company did not publish those findings and instead told doctors the drug was highly effective for treating the disorder, according to the lawsuit.
Franklin filed his 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.
The settlement was the second- largest of its kind since TAP Pharmaceutical paid an $875 in 1999.