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Brown Wins $37.5 Million for California as Part of Nationwide Settlements with Pfizer over Illegal Kickbacks and Improper Marketing

Wednesday, September 2, 2009
Contact: (415) 703-5837

Sacramento – Attorney General Edmund G. Brown Jr. today announced that California will receive $34.8 million as part of a nationwide settlement with Pfizer, Inc., resolving civil and criminal charges that the company paid “illegal kickbacks” and conducted improper marketing campaigns for more than a dozen of its drugs. Under the nationwide agreement, Pfizer will pay a total of $2.3 billion to the federal government and all 50 states.

Brown also announced that California will receive an additional $2.7 million in a separate settlement with Pfizer over the illegal off-label marketing of Geodon, an anti-psychotic medication. Under this agreement, Pfizer will pay a total of $33 million to California and 42 other states.

“Pfizer paid illegal kickbacks in the form of cash, high-priced dinners and weekend getaways to induce physicians to prescribe its drugs,” Brown said. “In what is the largest health care fraud settlement in U.S. history, the company will pay more than $2.3 billion, including $35 million to the state of California.”

$2.3 Billion Nationwide Settlement
Brown, the other attorneys general, and the U.S. Department of Justice contend that Pfizer engaged in a pattern of unlawful marketing activity to promote drugs for uses which the Food and Drug Administration (FDA) had not approved. It is not illegal for a physician to prescribe a drug for an unapproved use, but federal law prohibits a manufacturer from marketing a drug for off-label uses not approved by the FDA. This promotional activity included:

- Marketing Bextra for conditions and dosages other than those for which it was approved;

- Promoting the use of the anti-psychotic drug Geodon for a variety of off-label conditions such as attention deficit disorder, autism, dementia and depression for patients that included 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.

The settlement also contends that Pfizer paid illegal kickbacks to health care professionals to induce them to promote and prescribe Bextra, Geodon, Lyrica, Zyvox, Aricept, Celebrex, Lipitor, Norvasc, Relpax, Viagra, Zithromax, Zoloft and Zyrtec. These payments allegedly took many forms, including entertainment, cash, travel and meals. Federal law prohibits payment of anything of value in exchange for the prescribing of a product paid for by a federal health care program.

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, which will closely monitor the company’s future marketing and sales practices.

This settlement is based on nine whistleblower (qui tam) cases that were filed on behalf of California and other states in the U.S. District Court for the District of Massachusetts, the U.S. District Court for the Eastern District of Pennsylvania and the U.S. District Court for the Eastern District of Kentucky. Actions were filed by private individuals under state and federal false claims statutes, including California’s False Claims Act.

California’s pre-interest recovery of $34.8 million represents double damages, half of which will go to Medi-Cal. The remaining $17.4 million will be deposited, pursuant to state law, in the Attorney General’s False Claims Fund, which is used to support ongoing investigations and prosecutions of false claims unlawfully filed at the expense of the state.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Pfizer on behalf of California and the other settling states. Prosecutors and auditors from the Attorney General’s Bureau of Medi-Cal Fraud and Elder Abuse participated in these negotiations.

$33 Million Geodon Settlement
In the second settlement, Brown and the other attorneys general contend that Pfizer engaged in unfair and deceptive practices when it marketed Geodon for off-label uses between January 1, 2001 to December 31, 2007. As part of the settlement, Pfizer has agreed to change how it markets Geodon and has agreed to stop promoting off-label uses.

Geodon is the brand name for the prescription drug ziprasidone. The drug has been approved by the FDA for treatment of schizophrenia in adults and for manic or mixed episodes of bipolar disorder in adults. The complaint contends that Pfizer promoted Geodon for a number of off-label uses, including pediatric use and use at dosage levels higher than had been approved by the FDA. Although a physician is allowed to prescribe drugs for off-label uses, federal law prohibits pharmaceutical manufacturers from marketing their products for off-label uses.

The settlement mandates that Pfizer shall:
• Not make any false, misleading or deceptive claims regarding Geodon;
• Not promote Geodon for off-label uses;
• Not promote Geodon using selected symptoms of the FDA-approved diagnoses unless certain disclosures are made regarding the approved diagnoses;
• Post on its website a list of physicians and related entities who receive payments from Pfizer until 2014;
• Provide product samples of Geodon only to health care providers who have specialties that customarily treat patients who have diseases for which treatment with Geodon would be consistent with the product’s current labeling;
• Register and post on a publicly accessible website certain Pfizer-sponsored clinical trials; and
• Require its medical staff to be responsible for the identification, selection, approval and dissemination of scientific article reprints containing off-label information regarding Geodon, and that such information not be referred to or used in a promotional manner.

California will receive $2.7 million in civil penalties from Pfizer.

To report fraud or abuse, call the Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse at (800) 722-0432.

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