SAN FRANCISCO (MarketWatch) -- Pfizer Inc. and its subsidiary Pharmacia & Upjohn Co. Inc. have agreed to pay $2.3 billion related to Justice Department allegations that they illegally promoted certain drugs, the federal agency said Wednesday.
Shares of Pfizer (PFE 16.23, -0.15, -0.92%) were down a fraction Wednesday morning, after the Justice Department announced what it said was the largest health-care-fraud settlement in the agency's history.
Pfizer has agreed to settle allegations that it illegally promoted four drugs: Bextra, an anti-inflammatory drug the company recalled from the market in 2005; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug, the DOJ said.
The company "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 DOJ said in a statement.
The agency said the settlement also "resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as other, drugs."
Pharmacia & Upjohn agreed to plead guilty to "a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead," the DOJ said.
"Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns," the agency said.
The company also has agreed to an "expansive corporate integrity agreement" with the Department of Health and Human Services' Office of Inspector General. The agreement would provide for "procedures and reviews" meant to "avoid and promptly detect conduct" similar to those that led to the problems in this case.
The DOJ noted that whistleblower lawsuits triggered the investigation, adding that as part of the settlement, "six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery."
In a statement, Pfizer noted that it had disclosed the $2.3 billion charge to its fourth-quarter and full-year 2008 earnings, and "no additional charge" will be recorded related to the settlement.
Shares of Pfizer (PFE 16.23, -0.15, -0.92%) were down a fraction Wednesday morning, after the Justice Department announced what it said was the largest health-care-fraud settlement in the agency's history.
Pfizer has agreed to settle allegations that it illegally promoted four drugs: Bextra, an anti-inflammatory drug the company recalled from the market in 2005; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug, the DOJ said.
The company "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 DOJ said in a statement.
The agency said the settlement also "resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as other, drugs."
Pharmacia & Upjohn agreed to plead guilty to "a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead," the DOJ said.
"Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns," the agency said.
The company also has agreed to an "expansive corporate integrity agreement" with the Department of Health and Human Services' Office of Inspector General. The agreement would provide for "procedures and reviews" meant to "avoid and promptly detect conduct" similar to those that led to the problems in this case.
The DOJ noted that whistleblower lawsuits triggered the investigation, adding that as part of the settlement, "six whistleblowers will receive payments totaling more than $102 million from the federal share of the civil recovery."
In a statement, Pfizer noted that it had disclosed the $2.3 billion charge to its fourth-quarter and full-year 2008 earnings, and "no additional charge" will be recorded related to the settlement.