New York state to receive nearly $66 million as part of multi-state/federal settlement with Pfizer

NEW YORK, N.Y. (September 2, 2009) - Attorney General Andrew M. Cuomo today announced that New York, six other states and the federal government have negotiated the largest health care fraud settlement in history concerning allegations that pharmaceutical giant Pfizer, Inc. provided kickbacks and engaged in off-labeling marketing campaigns to illegally promote its drugs.

Pfizer (NYSE: PFE), the largest pharmaceutical manufacturer in the world, illegally engaged in a pattern of marketing activities to promote multiple drugs for uses not approved by the Food and Drug Administration (FDA). Pfizer also paid kickbacks to health care professionals in the forms of entertainment, cash, travel and meals to induce them to promote and prescribe various drugs, including: Bextra, Geodon, Lyrica, Zyvox, Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft and Zyrtec.

Under the agreement, which covers most states in the U.S., Pfizer must pay a total of $1 billion in civil damages and penalties to compensate Medicaid, Medicare, and various federal healthcare programs for harm suffered as a result of its conduct. New York state will receive nearly $66 million as part of the settlement, and other states will receive payments based on usage of Pfizer drugs covered under the settlement. In addition, Pfizer subsidiary Pharmacia & Upjohn Company, Inc. will pay a $1.3 billion fine and forfeiture and plead guilty to a felony violation of the Food, Drug, and Cosmetic Act (FDCA) for misbranding the anti-inflammatory drug Bextra with the intent to defraud or mislead. Pfizer pulled Bextra from the market in 2005.

“Pfizer ripped off New Yorkers and taxpayers across the country to pad its bottom line,” said Attorney General Cuomo. “Pfizer’s corrupt practices went so far as sending physicians on exotic junkets as well as wining and dining health care professionals to persuade them to prescribe the company’s drugs for patients in taxpayer-funded programs.”

Pfizer and its subsidiaries engaged in multiple illegal marketing and promotional activities for its drugs in an attempt to increase usage and sales, including:

* Marketing Bextra for conditions and dosages other than those for which it was approved
* Promoting the use of the antipsychotic drug Geodon for a variety of off-label conditions such as attention deficit disorder, autism, dementia and depression for patients including children and adolescents
* Selling the pain medication Lyrica for unapproved conditions
* Making false representations about the safety and efficacy of Zyvox, an antibiotic only approved to treat certain drug resistant infections

While a physician can prescribe drugs for an unapproved use, federal law prohibits a manufacturer from promoting a drug for uses not approved by the FDA.

As a condition of the settlement, Pfizer will enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of the Inspector General (HHS-OIG), which will closely monitor the company’s future marketing and sales practices.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Pfizer on behalf of the settling states. The team included members from New York, Ohio, Massachusetts, Texas, Arkansas, Oregon and Virginia.

Earlier this year, Attorney General Cuomo’s Medicaid Fraud Control Unit was named the top Medicaid fraud control unit in the country by the HHS-OIG. In 2008, the Unit obtained nearly 150 convictions in cases of Medicaid provider fraud and patient abuse, recovering more than $263 million in civil damages and criminal restitution. HHS-OIG noted that the Attorney General’s Medicaid Fraud Control Unit obtained a “return of investment of approximately $6.64 for every Federal dollar expended.”

The Pfizer settlement announced today is based on nine cases that were filed in the United States District Court for the District of Massachusetts, the United States District Court for the Eastern District of Pennsylvania and the United States District Court for the Eastern District of Kentucky by private individuals who filed actions under state and federal false claims statutes.