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Pfizer – $2.3 Billion, 2009

Pfizer – $2.3 Billion, 2009

In September of 2009, Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. (“Pfizer”) agreed to pay $2.3 billion to resolve criminal and civil liability claims pertaining to the illegal promotion of several pharmaceutical products - the largest health care fraud settlement in history. The settlement arose from several qui tam cases which led to federal and state investigations into Pfizer’s illegal activities.

The U.S. Attorney’s offices for the District of Massachusetts, the Eastern District of Pennsylvania, the Eastern District of Kentucky and the Civil Division of the Department of Justice handled these cases.

The Practice: Misbranding, Illegal Marketing and Kickbacks

In 2003, Pfizer sales representative John Kopchinski filed a qui tam lawsuit alleging that the company promoted the anti-inflammatory drug Bextra for “off label” purposes (i.e., uses not approved by the FDA), including treatment for acute and surgical pain, and in dosages higher than FDA-approved amounts. The suit also alleged that Pfizer paid kickbacks to encourage doctors to prescribe and endorse Bextra. Pfizer pulled Bextra from the market in 2005. In 2009, Pfizer pled guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Pfizer and Pharmacia & Upjohn paid a total of $1.3 billion in criminal fines for their fraudulent promotion of Bextra, the largest criminal fine ever imposed in the United States.

Several other whistleblowers filed suits against Pfizer regarding the illegal promotion of three additional drugs: Geodon, Zyvox, and Lyrica. The suits alleged that, as a result of Pzifer’s actions, false claims were submitted to government health care programs for uses that were not medically accepted and therefore not covered by the programs. In addition, the suits alleged that Pfizer paid kickbacks to health care providers as an incentive to prescribe these and other drugs. Pfizer agreed to pay $1 billion to resolve these civil False Claims Act allegations.

In addition to the monetary component of the settlement, Pfizer agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services to detect and prevent similar conduct in the future.

The Whistleblowers

Several whistleblowers filed cases that led to the Pfizer settlement and received compensation in accord with the qui tam provisions of the False Claims Act: John Kopchinski ($51.5 million), Dr. Stefan Kruszewski ($29 million), Ronad Rainero ($9.3 million), Glenn DeMott ($7.4 million), Dana Spencer ($2.7 million) and Blair Collins ($2.35 million). Mr. Kopchinski, Mr. Rainero and Mr. DeMott were all former employees at Pfizer in its sales department. Mr. John Kopchinski’s 2003 lawsuit against Pfizer’s improper off-labeling of Bextra spurred the federal and state investigations that led to the Pfizer settlement. It also accounted for $1.8 billion of the total settlement. Mr. Kopchinski is a Gulf War veteran and a former Pfizer sales representative in Florida who was hired by the company in 1992 after he left the army. He and his colleagues (nicknamed “the sharks”) faced constant pressure to market Bextra and other drugs for off-label uses that put patients at serious risk. Mr. Kopchinski complained to management about Pfizer’s aggressive promotion of Bextra and its methods of incentivizing doctors and pharmaceutical companies. Mr. Kopchinski was dismissed from the company in 2003 after raising these concerns. While Mr. Kopchinski has said that the six years he spent pursuing the Pfizer case was a stressful time, he was driven by his values of integrity and goodwill to speak out against the company: “In the Army, I was expected to protect people at all costs. At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn’t do that.” Mr. Kopchinski received $51.5 million of the Pfizer settlement.

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