Justice Department Makes 2.3 Billion Dollar Example of Pfizer's Marketing Practices

No sooner do I write another post about pharma marketing than Pfizer (PFE) finds itself paying 3.2 billion dollars in fines for doing it improperly. 1.2 billion of that is a criminal penalty, and needless to say, they've set the current record.

The issues were off-label promotion of Bexxtra, Geodon, Zyvox, and Lyrica, with the largest penalties coming from the first two. Pfizer's had three other settlements of this kind in the last few years, and that record was definitely a factor this time, as the Justice Department looked for a figure that might get the company's attention. Also supposed to get the company's attention is a five-year "integrity agreement" with the Department of Health and Human Services, but it's worth noting that the company was already supposedly operating under an earlier such agreement when it was promoting Bexxtra. I think the money has a better chance of being noticed, myself.

I think that these kinds of penalties should be levied, in case anyone's wondering. Our current system almost makes sure that it will happen over and over, but that's because we're splitting the difference between two competing principles. The first one is that physicians should have the freedom to practice medicine as they best see fit, which means that they can write prescriptions for drug uses that have not (yet) been approved by the FDA. The second principle, though, is that drug companies should not be free to promote such uses. And I agree with both of those, but sticking to both of them simultaneously leaves open a constant temptation to break the law.

But there are a lot of industries that operate under such conditions, and in each case, they're supposed to control themselves (and get hammered on when they don't). Perhaps this latest fine will be enough of an example to keep the marketing people thinking ahead a bit. If that won't do it, then the way this whole case came up might - it's another example of whistleblower laws at work. John Kopchinski, a sales rep who left Pfizer in 2003, looks to get around $50 million of the settlement for bringing key information to the government's attention, and others are involved as well. I think that's a good thing, too, a useful counterbalance to the financial incentives on the other side.

But for now, we're left with another huge black mark on the industry's reputation. Thank you, Pfizer.

Comments

[a. palmer jr.:]

I know a person who wanted to put his entire retirement plan in Pfizer stock. His broker refused to do it. He fired his broker and stormed out of his office. I wonder how he feels about his ex-broker now!

Sep 04 08:46 AM

[Fed Up Again:]

We all know that the pharmaceutical industry has been pushing medication for unapproved uses for years. Just like the insurance industry, they are only concerned about profits. Fortunately, there are whistleblowers like John Kopchinski to report their transgressions and stand up against these corporate giants. The 3.2 billion dollar fine by the federal government will send out a strong message to the pharmaceutical industry that they cannot push drugs for uses that the FDA has not approved them for. The pharmaceutcal industry is no different than the drug pusher standing on the street corner, and they should be treated in the same manner!

Sep 04 08:47 AM

[john s. gordon:]

excess television advertizing of pills is a national disgrace.
sold all my PFE on 5/19/08 at 20.24.
> jack

Sep 04 09:35 AM

[OneRichOne:]

There is one way we can stop this, that is ti disallow all advertising of prescription drugs. We already don't allow cigarettes to be advertised as well as hard liquor. Look at it this way, the only people that pay for this advertising are the people who actually need the drugs. Making Doctors into drug pushers is wrong. I've written to my senators and congressmen to put a stop to this many times but the lobby for the drug makers is much stronger than a few people who are aware of what is going on. I own Pfizer stock but I'm totally against the abuses that are going on. The prime reason that healthcare is so costly is because of this type of abuse of the system. Anyone who reads this should contact their congressmen and push for reform in advertising, don't allow advertising of drugs that must be prescribed by a Doctor.

Sep 04 07:08 PM