Justice Dept. hits Pfizer with $2.3 billion in fines and civil penalties

With the nation’s healthcare system groaning under epic pressure, you would think that the pharmaceutical giants would be a little more judicious in the way they promote their drugs and sell them to federal, state, and municipal government programs. Perhaps they will be, now that the United States Department of Justice has slapped Pfizer with a record $2.3 billion fine for defrauding the Medicare and Medicaid programs.

Pfizer has agreed to pay $1.3 billion in criminal penalties to the Justice Department for its illegal promotion of Bextra, a nonsteroidal anti-inflammatory drug used to treat arthritis and menstrual pain. Pfizer followed the recommendation of the Food and Drug Administration and withdrew Bextra from the market in 2005 after mounting evidence linked it with increased risk of cardiac arrest, stroke, and Stevens-Johnson Syndrome, a serious and often fatal skin disease.

Pfizer will pay an additional $1 billion in civil fines for fraudulent marketing of three other drugs, Geodon, Lyrica, and Zyvox.

The announcement was played up by the Obama Administration, which had Health and Human Services’ Kathleen Sebelius make the formal announcement today, presumably to offset criticism that not enough was being done to clean up Medicare and Medicaid fraud.

A New York Times report says that almost every drug maker stands accused of “giving kickbacks to doctors or shortchanging the Medicaid program on prices.”

“Prosecutors said that they have become so alarmed by the growing criminality in the industry that they have begun increasing fines into the billions of dollars and will soon start charging doctors individually as well,” the New York Times report said.

Pfizer has also agreed to pay $33 million amongst 42 states and the District of Columbia in claims involving the promotion of its drug Geodon, used in the treatment of schizophrenia.