Largest civil fraud settlement in history against a pharmaceutical company

Just another classic example of big pharma getting caught red handed. Thanks to these whistleblowers and many others coming out lately, the public is starting to wake up to the corruption and fraud between our government and the drug industry.


Mike Adams
NaturalNews

For the last several years, I've referred to drug companies as "criminal" operations. They have engaged in price fixing, marketing fraud, science fraud and many other criminal activities that we've written about here on NaturalNews. And yet, until today, they always managed to avoid the criminal charges by settling with the government for a few million dollars in payouts. This was their racket: Violate the law, then when you get caught, just settle with some cash. (And there's always some spare cash to go around since fraudulent science and fraudulent marketing is very, very lucrative.)

But all that changed today with the announcement of a Dept. of Justice criminal case that has resulted in Pfizer pleading guilty to a felony crime. Which crime? "...for misbranding Bextra with the intent to defraud or mislead." You can read the DOJ documents describing the settlement here: http://www.usdoj.gov/opa/pr/2009/Se...

Essentially, Pfizer asked the FDA to approve Bextra for a variety of diseases and conditions, and when the FDA refused those approvals, Pfizer decided to go ahead and market the drugs for those diseases and conditions anyway (off-label marketing).

But that's not all. In the DOJ statement, you'll read the following:

Pfizer has agreed to pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs -- Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug -- and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs. The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as other, drugs. The federal share of the civil settlement is $668,514,830 and the state Medicaid share of the civil settlement is $331,485,170. This is the largest civil fraud settlement in history against a pharmaceutical company.

False claims, kickbacks, felony crimes and civil fraud... it seems that the truth about pharmaceutical companies like Pfizer is finally starting to emerge.

And here's the best part: Pfizer's own whistleblowers will cash in! "Six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery," says the DOJ.

$2.3 billion in fines
Along with this admission of guilt for committing a felony crime, Pfizer is paying well over $1 billion in criminal fines, plus another $1 billion or so to resolve civil allegations against its fraudulent marketing practices. In all, the multi-billion dollar settlement is the largest in the history of the DOJ.

All I can say is: Good work! I've often stated that the pharmaceutical industry should be subjected to our nation's laws, and yet it has operated in a largely lawless fashion for decades. The FTC, for example, which should be investigating the drug industry monopolies that rip off American consumers and limit consumer choice, has all but ignored the monopolistic (and highly illegal) practices of the pharmaceutical industry. But the Dept. of Justice has now apparently decided that enough is enough -- it's going to investigate and prosecute serious criminal fraud being committed by drug companies.

It all makes me wonder whether the folks in Washington have finally figured out that Big Pharma is bankrupting America, and that if true health care reform is to have any hope of reeling in the runaway costs of "sick care," it's going to have to address the fraud and criminality of the pharmaceutical industry. You can't run a national health care system that's affordable and effective if a large part of the system is based on monopoly priced, fraudulently marketed and scientifically falsified drugs.

This is now becoming apparent at both the state and federal level. Check out these quotes from some of the players involved (quoted from the DOJ press release):

"Today's landmark settlement is an example of the Department of Justice's ongoing and intensive efforts to protect the American public and recover funds for the federal treasury and the public from those who seek to earn a profit through fraud. It shows one of the many ways in which federal government, in partnership with its state and local allies, can help the American people at a time when budgets are tight and health care costs are increasing," said Associate Attorney General Tom Perrelli. "This settlement is a testament to the type of broad, coordinated effort among federal agencies and with our state and local partners that is at the core of the Department of Justice's approach to law enforcement."

"This historic settlement will return nearly $1 billion to Medicare, Medicaid, and other government insurance programs, securing their future for the Americans who depend on these programs," said Kathleen Sebelius, Secretary of Department of Health and Human Services. "The Department of Health and Human Services will continue to seek opportunities to work with its government partners to prosecute fraud wherever we can find it. But we will also look for new ways to prevent fraud before it happens. Health care is too important to let a single dollar go to waste."

"Illegal conduct and fraud by pharmaceutical companies puts the public health at risk, corrupts medical decisions by health care providers, and costs the government billions of dollars," said Tony West, Assistant Attorney General for the Civil Division. "This civil settlement and plea agreement by Pfizer represent yet another example of what penalties will be faced when a pharmaceutical company puts profits ahead of patient welfare."

"Health care fraud has a significant financial impact on the Postal Service. This case alone impacted more than 10,000 postal employees on workers' compensation who were treated with these drugs," said Joseph Finn, Special Agent in Charge for the Postal Service's Office of Inspector General. "Last year the Postal Service paid more than $1 billion in workers' compensation benefits to postal employees injured on the job."

"The size and seriousness of this resolution, including the huge criminal fine of $1.3 billion, reflect the seriousness and scope of Pfizer's crimes," said Mike Loucks, acting U.S. Attorney for the District of Massachusetts. "Pfizer violated the law over an extensive time period. Furthermore, at the very same time Pfizer was in our office negotiating and resolving the allegations of criminal conduct by its then newly acquired subsidiary, Warner-Lambert, Pfizer was itself in its other operations violating those very same laws. Today's enormous fine demonstrates that such blatant and continued disregard of the law will not be tolerated."

These are such harsh words against Pfizer that you might think I wrote them. Yet they're printed word-for-word by the Dept. of Justice. Read them yourself here: http://www.usdoj.gov/opa/pr/2009/Se...

Do you see what all these statements have in common? Money is tight. Big Pharma's price fixing and marketing fraud was well tolerated when easy money was readily available, but now that the writing is on the wall with record government debt, falling tax revenues and huge budget cuts at the state level, every dollar counts. Suddenly Big Pharma's fraud looks like a lucrative target where some money can be recovered and restored to state coffers.

A tidal wave of legal action against drug companies?
I have a feeling these Pfizer fines are just the beginning. In an economy where unemployment is skyrocketing and state and federal budgets are getting squeezed, pharmaceutical companies look a little suspicious sitting on a big pile of cash. Where did all that cash come from? And why aren't the American people any healthier after spending all that cash on Big Pharma's medications?

Everybody in the law enforcement side of government already knows the pharmaceutical industry operates in blatant violation of the law. Now it's just a matter of figuring out what it will cost in legal fees to prove Big Pharma's crimes and recover yet more billions from companies like Pfizer. State administrators are running this formula through their heads right now: If we spend, say, ten million dollars on legal fees and investigative efforts against the drug companies, we stand a good chance of recovering a hundred million dollars (or more) in money that can go straight into the state treasury... and that means we don't have to shut down as many schools, or state parks, or social services, etc. in order to balance the state budget.

It's a tempting equation, especially during difficult economic times. And now that the DOJ has proven they can get a guilty plea and a few billion dollars out of just one pharmaceutical giant, the gold rush is on: More states (and perhaps more nations) will see this as a green light to go after the money.

What we're likely to see now with Big Pharma is a lot like what happened with Big Tobacco. The tobacco industry wasn't sued by states because it manufactured a product that killed people -- that sort of thing has always been tolerated in America -- it was sued because the states saw easy money combined with a great cover story. "We're saving people from tobacco!"

Now, there's a new cover story that we'll see repeated as the states go after Big Pharma: "We're saving our health care system!"

And it's largely true. Health care cannot financially survive if the biggest corporate players routinely engage in criminal fraud as a way of doing business.

That's why this DOJ settlement with Pfizer over the criminal marketing of its Bextra drug is a step in the right direction. While one criminal conviction won't end Big Pharma's fraudulent drug racket over night, it is at least a shot over the bow of pharmaceutical manufacturers, warning them that there are limits to the degree of deception in which they can engage.

As part of the settlement with the DOJ, by the way, Pfizer also agreed to an "expansive corporate integrity agreement" designed to root out and halt criminal behavior by its own employees in the future. It's fascinating that corporate ethics in America have sunk so low that a company must actually launch an internal corporate integrity program just to teach its employees and officers to avoid engaging in felony crimes.


ABC also covered the story

http://www.abc.net.au/news/stories/2009/09/03/2676083.htm