For Immediate Release - September 02, 2009

Attorney General Martha Coakley's Office Reaches Nearly $15 Million Settlement with Pharmaceutical Giant Pfizer

Coalition of Government Entities Reaches Historic $2.3 Billion Settlement with Drug Giant

BOSTON - Today , Massachusetts Attorney General Martha Coakley's Office reached an agreement with pharmaceutical manufacturer Pfizer Inc. ("Pfizer"), resolving allegations that the company engaged in improper marketing practices to promote the sales of a variety of its drugs. Under the terms of this landmark settlement, Pfizer will pay $14,728,408 to the Massachusetts Medicaid Program, which provides funds for health care products and services to eligible low-income individuals, including people with disabilities, children and elder citizens. Attorney General Coakley's office took a leading role in negotiating this agreement by serving as the lead representative and negotiator for the multi-state settlement team. This is the largest national settlement in history in a health care fraud matter.

"This settlement sends a strong message to the pharmaceutical industry and to the broader healthcare community that illegal and improper practices will not be tolerated." said Attorney General Coakley. "State and federal prosecutors take very seriously their responsibility to police the Medicaid program, and we will continue to work together to identify and root out fraud and abuse in the health care industry. Particularly in today's climate of economic hard times and budget cutbacks, we will not tolerate improper sales and marketing practices that enrich corporations at the expense of taxpayer-funded programs serving our neediest citizens."

The Massachusetts recovery is part of a national settlement that could return more than $700 million to Medicaid programs nationwide and an additional $295 million to other federally-funded health care programs. Attorney General Coakley's office took a leading role in negotiating this agreement by serving as the lead representative and negotiator for the multi-state settlement team. The coalition of government entities involved in this multi-state agreement includes the United States Attorneys' Offices for the District of Massachusetts, the Eastern District of Pennsylvania, the Eastern District of Kentucky, and the United States Department of Justice, the Office of Inspector General of the U.S. Department of Health and Human Services, and representatives of the attorneys general of the states of Oregon, Ohio, New York, Virginia, Texas and Arkansas.

This settlement is based on nine separate whistleblower lawsuits filed against the company in federal courts in Massachusetts, Pennsylvania and Kentucky. A number of the suits alleged that Pfizer and its subsidiaries employed illegal off-label marketing to promote the sales of Bextra (an anti-inflammatory medication), Geodon (a drug used in the treatment of schizophrenia), Zyvox (an antibiotic), and Lyrica (a seizure medication). Off-label prescribing of pharmaceutical products by physicians - the writing of prescriptions to treat a condition for which the drug is not approved by the U.S. Food and Drug Administration - is a common practice and is not unlawful. Nevertheless, the U.S. Food, Drug and Cosmetic Act prohibits pharmaceutical manufacturers from marketing or promoting off-label uses of their products. This portion of the settlement addresses these off-label marketing claims only, and does not release Pfizer from liability for claims arising from adverse health effects suffered by Medicaid recipients or other health care consumers as a result of taking these products.

The remaining lawsuits were based upon allegations that the company engaged in various kickback schemes to increase its sales of nine other drugs: Aricept (used for the treatment of Alzheimer's disease); Celebrex (like Bextra, an anti-inflammatory drug); Lipitor (a statin, or cholesterol-lowering drug); Norvasc (used in the treatment of high blood pressure); Relpax (approved to treat migraines); Viagra (used in the treatment of erectile dysfunction); Zithromax (an antibiotic); Zoloft (an anti-depressant); and Zyrtec (an allergy medication). These kickbacks allegedly took many forms, including improper inducements to health care providers in the form of entertainment, cash, travel, and meals. Both Massachusetts and federal law prohibit the payment of anything of value in exchange for the prescribing of a product paid for by the Medicaid program.

In addition to the civil settlements, Pfizer subsidiary Pharmacia & Upjohn Company, Inc. will plead guilty to a one count felony violation of the Food, Drug and Cosmetic Act (criminal misbranding of a drug with the intent to defraud or mislead), and will pay federal criminal fines and forfeitures totaling $1.3 billion. The criminal plea will resolve charges that the company illegally promoted the sales of Bextra, one of a class of anti-inflammatory drugs known as Cox-2 inhibitors, which was subsequently withdrawn from the market because of unacceptably high risks of cardiovascular complications associated with its use.

Pfizer has also entered into a detailed and comprehensive Corporate Integrity Agreement (CIA) to be administered by the Office of Inspector General of the U.S. Department of Health and Human Services, under which the company's sales and marketing practice will be strictly monitored for a period of five years.

Assistant Attorney General Robert Patten of Attorney General Coakley's Medicaid Fraud Division served as principal negotiator on behalf of the states in this national settlement. He was assisted by Data Analyst Anthony Megathlin, also of the Medicaid Fraud Division, and by Assistant Attorneys General and data analysts from Oregon, Ohio, New York, Texas, Virginia and Arkansas.