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EMPLOYEE WHISTLEBLOWERS CAUSED EMPLOYER TO PAY $2.3 BILLION FOR MARKETING FRAUD

     American pharmaceutical giant Pfizer Inc. will pay $2.3 billion to settle charges of criminal and civil liability arising from the illegal promotion of certain pharmaceutical products.

     This settlement, which is reportedly the largest health care fraud settlement in history, would not have been possible if six company employees did not come forward to expose the company’s illegal activities. Their whistleblower lawsuits triggered the investigation which led to the involvement of the DOJ and other government agencies. As a part of the settlement, the six whistleblowers will receive payments totaling more than $102 million from the U.S. government under the False Claims Act through which individuals can reap rewards for exposing corporate wrongdoing.

     One of the six whistleblowers, John Kopchinski, a former sales representative of the drug company, was appalled by Pfizer's tactics in selling the pain drug Bextra. Kopchinski, an Army veteran, stated that when he worked for Pfizer, he was “expected to increase profits at all costs, even when sales meant endangering lives.” He said this was something he could not do. He raised his concerns with the company and was then fired in March 2003. (Two years after his firing, the company pulled Bextra from the market over concerns it raised the risk of heart attacks and strokes.) After his firing, Kopchinski and the rest of the whistleblowers engaged in a legal battle that lasted six years, culminating in the $2.3 billion settlement detailed below:

     Pharmacia & Upjohn Company, a subsidiary of Pfizer, has agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act (FDA Act) for misbranding Bextra to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the FDA Act, a company must specify the intended uses of a product in its new drug application to the FDA. Once approved, the drug may not be marketed or promoted for any use not approved by the FDA (called "off-label" uses). Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any case. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

     Pfizer has also 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 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 and 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.

     Large monetary rewards are important. They encourage potential whistleblowers to come forward and report corporate violations of the law. Without the involvement of these employees, government enforcement agencies and the public will not know about certain corporate activities that endanger public health and safety.

© Law Offices C. Joe Sayas, Jr.