Pfizer to plead guilty in marketing case

BOSTON – Pfizer Inc. has agreed to plead guilty and pay $430 million in fines to settle charges that its Warner-Lambert unit flouted federal law by promoting nonapproved uses for one of its drugs. Some of the money will be shared among state and federal Medicaid agencies, including about $1.6 million for Maine.

The settlement with the world’s largest pharmaceutical company includes a $24.6 million payment for whistle-blower David Franklin, who first reported the marketing abuses to authorities.

Under the agreement released Thursday by federal prosecutors, the company acknowledged spending hundreds of thousands of dollars to promote nonapproved uses for the anti-seizure drug Neurontin, in part by paying doctors hefty speakers’ fees and flying them to lavish resorts as “educational” trips.

“This illegal and fraudulent promotion scheme corrupted the information process relied upon by doctors in their medical decision-making, thereby putting patients at risk,” said U.S. Attorney Michael Sullivan, who joined senior Justice Department officials in Washington to announce the settlement Thursday.

Pfizer agreed to plead guilty to violating the Food, Drug and Cosmetic Act and pay a $240 million criminal fine, the second-largest ever in a criminal health care fraud prosecution, according to the Justice Department. The company will also 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.

Maine will get about $1.6 million for Medicaid programs and $25,000 for consumer protection services.

“We are fighting on many fronts to cut through elaborate drug industry schemes so that Maine doctors and patients have the best information for making health care purchasing decisions,” said state Attorney General Steven Rowe. Rowe chairs the prescription drug pricing task force of the National Association of Attorneys General.

“We believe we have exposed an illegal practice in the pharmaceutical industry that caused the Medicaid program to pay tens of millions of dollars for off-label prescriptions that were not eligible for reimbursement under the Medicaid program,” said Franklin’s attorney, Thomas Greene.

A spokeswoman for the U.S. Attorney’s office in Boston, which helped negotiate the deal, declined to comment. The U.S. Department of Justice scheduled a news conference in Washington, D.C., to announce the settlement.

The case began in 1996, when Franklin filed a whistle-blower lawsuit against Parke-Davis and its parent company, Warner-Lambert, alleging it used an illegal marketing plan to drive up sales of the anti-seizure drug Neurontin in the 1990s. Pfizer bought Warner-Lambert four years ago.

The lawsuit alleged that while Neurontin was approved only as an epilepsy drug, the company promoted it for relieving pain, headaches, bipolar disorder and other psychiatric illnesses.

While doctors can prescribe drugs for any use, the promotion of drugs for these so-called “off-label uses” is prohibited by the Food, Drug and Cosmetic Act.

Last May, federal prosecutors in Boston filed a brief in support of Franklin’s lawsuit, and have since been in settlement negotiations with Pfizer to recover money the Medicaid program spent on Neurontin.

Pfizer said the activity alleged in Franklin’s lawsuit and charged by prosecutors occurred years before it bought Warner-Lambert in 2000.