Pfizer's huge fine: A disturbing trend

Do the increasing penalties against drug companies really cure the problem?


Vincent Rossmeier
September 4, 2009 3:04AM (UTC)

$2.3 billion: That's the price pharmaceutical giant Pfizer agreed to pay in a settlement Wednesday over its misleading marketing for the painkiller Bextra, the antipsychotic Geodon, the antibiotic Zyvox, and another painkiller, Lyrica. It's a record settlement that included the highest fine charged in U.S. history and came as the result of a lengthy Department of Justice investigation into healthcare fraud.

Though Pfizer voluntarily withdrew Bextra from the market in 2005, in the settlement, the company concedes that they had pushed doctors to prescribe unsafe doses of the drug prior to that point. The drug was approved by the FDA in 2001 for the treatment of pain associated with menstrual cramps and arthritis, but Pfizer encouraged its sales representatives to entice doctors to prescribe the drug in doses higher than those approved by the FDA. The escalated doses increased the chances that users of the drug would suffer a heart attack or a stroke. Pfizer also marketed Zyvox as a treatment for specific kinds of bacteria on which the drug had no effect.

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A former Pfizer sales representative, John Kopchinski, whose questioning of the company's marketing tactics helped lead to the investigation, will receive over $51 million from the settlement. Kopchinski lost his job as a result of blowing the whistle on Pfizer's illegal schemes. Pfizer will have to pay settlements in 42 states and the District of Columbia.

However, the hefty cost will probably barely affect Pfizer's overall profit margins: The company purchased rival Wyeth in January for $68 billion and had revenues of over $48 billion last year. As the New York Times pointed out, "While the government said the fine was a record sum, the $2.3 billion fine amounts to less than three weeks of Pfizer’s sales." This is the fourth time Pfizer has reached a settlement over fraudulent marketing since 2002.

In the wake of Pfizer's settlement, here's a look at some of the larger Big Pharma settlements in recent history:

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  • Zyprexa, 2009 -- Eli Lilly was accused of selling its top-selling drug Zyprexa widely -- even to those people without bipolar disorder or schizophrenia for which the drug was supposed to be used. The drug can cause severe weight gain, as well as increasing the risk of a patient developing diabetes. In January, Eli Lilly reached a settlement with the government for $1.4 billion.
  • OxyContin, 2007 -- Introduced in 1996 by Purdue Pharma, OxyContin was advertised as a softer, gentler painkiller. However, the drug is actually highly addictive, acting like heroin if taken incorrectly. OxyContin has become a scourge to communities across the U.S. and has also led to numerous overdose deaths. Perhaps the most notorious abuser of OxyContin was conservative radio talk show host Rush Limbaugh. In 2007, Purdue Pharma agreed to cough up $634.5 million in fines for its false claims about the drug.
  • Vioxx, 2007 -- When 47,000 people are involved in a lawsuit against you, you know you have a problem. Thus, Merck, the maker of the painkiller Vioxx, reached a $4.85 billion settlement in 2007 to get rid of all the pending cases brought against it due to Vioxx's negative side effects. Vioxx was found to double the risk of heart attacks and strokes and thus Merck pulled the pill from pharmacies in 2004.
  • Serostim, 2005 -- Serono, a Swiss technology company, had to pay $700 million in 2005 as a result of its fraudulent marketing for the AIDS drug Serostim. Serono developed a test that inflated the seriousness of the symptoms of a patient afflicted with AIDS and also sponsored junkets for doctors in order to get them to prescribe the drug.
  • Neurontin, 2004 -- Pfizer reached a settlement of $430 million to end criminal and civil charges about its practice of paying doctors to prescribe Neurontin, a drug for epilepsy, to patients with bipolar disorder, for which it was not approved.
  • Cipro, 2003 -- Bayer reached a $257 million settlement in 2003, the largest Medicaid fraud settlement at that time, after being charged by federal investigators with overcharging for the antibiotic Cipro. Bayer, however, didn't act alone: It received advice on how to go about the scheme from healthcare giant Kaiser Permanente. 
  • Paxil and Flonase, 2003 -- GlaxoSmithKline allegedly didn't want to miss out on all the fun and profits Bayer was having in overcharging for Cipro. It was accused of running a scheme with Kaiser Permanente to bilk Medicaid for the antidepressant Paxil and the allergy spray medication Flonase. GlaxoSmithKline paid $87.6 million in 2003 to settle the case.
  • Lupron, 2001 -- TAP Pharmaceuticals Inc. came up with a clever way to get doctors to use its prostate cancer drug, Lupron, instead of those of rival drug companies: namely, pay them. TAP offered one doctor $25,000 to go back to prescribing Lupron after he'd switched to a competitor's drug. But the doctor alerted authorities, who conducted a massive sting resulting in TAP dishing out a $875 million settlement in 2001.
  • Fen-Phen, 1999 -- Billed as a miracle diet drug by the drug company American Home Products Corp. (AHP), Fen-Phen was just as good at promoting heart valve disease as it was at helping people shed excess pounds. AHP removed Fen-Phen in 1997 after a damaging report showed that those who took the drug for more than two years increased their risk of developing heart valve disease by 17 percent. Though AHP agreed to pay $3.75 billion to the users of the drug, it did not have to admit to any wrongful actions in its marketing of Fen-Phen.

Vincent Rossmeier

Vincent Rossmeier is an editorial assistant at Salon.

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