The giant drug maker, Pfizer Inc., recently agreed to a $2.3 billion settlement. This is the largest fine in US history.
The Pfizer Lawsuit
Doctors are usually allowed to prescribe drugs approved by the Food and Drug Administration (FDA) for intended as well as unintended or "off-label" uses. However, drug companies can't market these medicines for unapproved uses.
Nonetheless, Pfizer encouraged doctors to prescribe its drug Bextra for off-label uses such as acute pain.Â Off-label use of Bextra isn't approved by the FDA. It can give patients an increased risk of having a heart attack or stroke. Pfizer pulled Bextra from the market in 2005 because of the increased risk of heart attack. They also promoted the antipsychotic Geodon for off-label use by children. They were then sued for illegally promoting sales of the drugs for off-label uses.
As a result, Pfizer faced federal criminal charges that they used unethical ways to get doctors to prescribe drugs for off-label uses. It treated them to meals, paid them for speaking engagements to promote Pfizer drugs, and paid for their travel.
To increase off-label prescriptions by doctors, part of Pfizer's marketing campaign included "consultant meetings" in exotic locations and paying doctors up to $1,500 to attend. John Kopchinski, a former Pfizer sales representative explained, "At Pfizer, I was expected to increase profits at all costs, even when sales meant endangering lives."1
Under the settlement, Pfizer's Pharmacia & Upjohn units pled guilty to the criminal charge. Pleading guilty means that Pfizer admitted in court that it committed the crime it was accused of without a trial.Â It must now suffer the consequence as if a judge or jury found it guilty. The company will also pay $1.3 billion to resolve criminal allegations involving Bextra.
Pfizer agreed to pay another $1 billion to resolve complaints that it illegally promoted Bextra, Geodon, Zyvox and Lyrica by getting doctors to prescribe off-label uses for them.
Pfizer will also pay $33 million to 42 states and the District of Columbia to settle state consumer protection claims related to its marketing concerning Geodon.
In addition to paying the fines, Pfizer also signed a "corporate integrity" agreement promising to use better marketing practices in the future. This is the third time Pfizer signed such an agreement. The first time was in 2002 over Lipitor. The second time was in 2004 over the epilepsy drug Neurontin. Under the latest agreement, Pfizer must create a way for doctors to report questionable conduct by Pfizer sales representatives.
Department of Health and Human Services Secretary Kathleen Sebelius hopes that the corporate integrity agreement offers some transparency in how the company researches and markets its drugs. It'll also show what kind of financial incentives the company offers doctors who prescribe Pfizer drugs.
Unethical Behavior by Pharmaceutical Companies
Today, it's common for drug companies to use aggressive marketing campaigns to promote their drugs. For example, Merck hired ghostwriters to write scientific articles about the painkiller Vioxx. They then recruited prestigious doctors to serve as their official authors. The painkiller was withdrawn from the market after research showed it could cause a stroke or heart attack. Similarly, Merck and Schering-Plough were criticized for delaying the release of a study about Vytorin, a cholesterol medication. Critics say they delayed its release because it showed that the drug didn't slow the growth of plaque in arteries.
Will the Settlement Change Pharmaceutical Practices?
Hopefully, this will send a warning message to drug companies by increasing the penalties for fraudulent marketing."The fact that settlements are increasing in amounts, to me, is a good thing," said Dr. Jerry Kassirer, an ethicist at the Tufts University School of Medicine. "The higher the cost to these companies of illegal marketing, the more effective it will be in deterring them from doing these things in the future."2
However, drug industry experts fear that the settlement won't do much to curb the highly profitable, unethical marketing practices used by pharmaceutical companies. They say drug companies will continue with deceptive marketing schemes until the penalties outweigh the profits. Bill Vaughan, a senior health policy analyst for Consumer's Union explained, "There is a mind-set in this industry, because it is such a profitable industry, that cheating is OK. ... If we have to pay these penalties, tough, we'll make up for it [in sales]."
For Pfizer, a $2.3 billion settlement isn't a big deal. It earned $48.3 billion in 2008. Nonetheless, drug companies are being scrutinized for their behavior, which will hopefully make a difference.
1Radha Chitale, Pfizer Pays $2.3B, but Will It Change the Pharmaceutical Industry?, ABC News, Sept. 3, 2009, http://abcnews.go.com/Health/PainManagement/pfizers-23-billion-settlement-change-practices/story?id=8476391, accessed September 24, 2009.
Questions for Your Attorney
- What should consumers do if they think they've been harmed by one of the drugs involved?
- What is a doctor's responsibility in prescribing drugs to patients for off-label uses?
- If a drug manufacturer has repeated incidents related to unethical or illegal conduct in drug marketing and promotions, does that impact legal claims against the manufacturer by consumers?