Pfizer To Pay Out Record Penalty; Stock Goes Up


WASHINGTON, D.C.—Pfizer, the world’s largest drug manufacturer, will pay $2.3 billion in criminal and civil penalties in a settlement with the Justice Department. The record fine was levied in the wake of allegations that the drug giant had improperly marketed the pain drug Bextra, along with three other drugs.

Pfizer is accused of illegally marketing the drugs to doctors by advocating their use for purposes not approved by the Food and Drug Administration. It’s not the first time Pfizer has faced these charges, as health industry experts speculate that the practice is widespread. The alleged activities actually took place while the company was paying a previous fine for improprieties connected to the marketing of Neurontin, an epilepsy drug. That fine was only $430 million.

Pfizer has been fined on two other occasions for similar abuses. Following the Neurontin fine, the company also signed a corporate integrity agreement – a promise to promote better business practices in the future. They will sign another one as part of the Bextra settlement. The heavy fine this time around was dictated not only by the severity of the infractions, but also by Pfizer’s past record.

“Among the factors we considered in calibrating this severe punishment was Pfizer’s recidivism,” announced government attorney Michael Loucks.

Pfizer, however, claims that they have changed their corporate ways. According to general counsel for the company, Amy Schulman, “the reasons to trust Pfizer are because, as I have walked the halls at Pfizer, you would see that the vast majority of our employees spend their lives dedicated to bringing truly important medications to patients and physicians in an appropriate manner.”

However, the man who broke the case, former Pfizer sales representative John Kopchinski, doesn’t believe the fine will do much to change the company. “The whole culture of Pfizer is driven by sales, and if you didn’t sell drugs illegally, you were not seen as a team player,” he said. Kopchinski stands to get $50 million from the settlement, as part of a whistle-blower compensation law that dates back to the Civil War. That law has prompted several other drug sales representatives to come forward with similar allegations in recent years.

Pfizer will pay $1.3 billion as as a criminal penalty for the Bextra infractions, and $1 billion in civil penalties related to the other drugs involved: Geodon, an antipsychotic; Zyvox, an antibiotic; and Lyrica, a nerve pain reliever. The illegal marketing tactics included paying doctors to attend conferences often held at resorts, and instructing doctors on uses of the drugs that hadn’t been approved by the FDA.

The fine imposed, while a hefty one, amounts to only about three weeks of Pfizer’s sales.


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